Kingspan has reported a slight drop in profits for the first half and prepared the market for a "satisfactory" performance over the remainder of the year.

The Cavan-based building materials group made a pre-tax profit of €28.3 million in the six months ending on June 30th, down 1.3 per cent on the same period of 2002. The company pointed out, however, that its performance was hit by a €1.7 million currency effect, with profits up 6.2 per cent on a constant-currency basis.

The euro's strength also ate into turnover, which came in 5.5 per cent higher at €380.3 million in monetary terms, but 14.6 per cent ahead at €413.3 million when exchange rate fluctuations are stripped out.

The results reflected solid growth within most of Kingspan's operations, with strong sales in insulation and composite panels offsetting continued weakness in raised-access flooring.

The company spent €8 million on acquisitions in Poland and Spain over the half and notched up €18 million in capital expenditure.

Kingspan chairman and chief executive, Mr Eugene Murtagh flagged "difficult" conditions across the group's markets but was optimistic on meeting analysts' expectations for the year.

The company will pay an interim dividend of 2.6 cents per share, up 24 per cent on last year.

Kingspan shares fell victim to some profit-taking after the numbers were released, closing 14 cents lower at €3.25. The stock had been particularly firm over the past week.

Analysts' were upbeat on the first-half results, which they saw as creditable when placed against a challenging market background.

Mr Murtagh's decision to separate the roles of chairman and chief executive at Kingspan - he will step down as chairman next year - was also viewed as positive, especially since it comes in the wake of a significant strengthening of the company's board.

Kingspan also announced the appointment of Mr Gene Murtagh Jr, Mr Murtagh's son, as chief operating officer.