Insulation company Kingspan hails ‘strong start’ to 2014

Building materials company Kingspan has recorded "a strong start to the year" following "tentative signs of a recovery" in Europe and its activity in the "relatively buoyant" UK market, the company said today.

In an interim management statement, it said sales in the first four months of the year were 8 per cent ahead of the same period in 2013 at €561 million.

Its insulated panel products were the star performer, rising by 14 per cent in the period due to a combination of gains in market penetration, increased market activity and a mild winter in Europe. But revenues in its access floors business fell by 9 per cent, as a rise in UK sales was offset by a “stubbornly slow to recover” US office market.

Kingspan said it was anticipating a strong first half for the business, with the group experiencing a backlog in orders across its main divisions.

“In general, I feel we’re in a better place than we have been for four to five years, but I don’t think it’s a slam-dunk yet,” said Kingspan chief executive Gene Murtagh, speaking after its agm in Dublin.

The company has seen enquiries about its rainwater harvesting tanks rise in tandem with the installation of water meters across the country, Mr Murtagh said. “I would say there is a direct correlation between that and our enquiry level.”

He added that he would be surprised if it was not compulsory to include rainwater harvesting systems in new-build properties in five years’ time.

The company was relatively upbeat about the prospects for the Irish residential sector. “If you forget about the past entirely and just look at the future and where Ireland can go, you would have to be very positive,” Mr Murtagh said.

“We are probably going to enter a period of a normal housing market over the next two to three years,” he added, forecasting annual construction rates of 20,000-25,000 residential properties.

The pick-up in UK business in the final quarter of last year has continued into 2014, Kingspan indicated. The British market is “not anything remotely like overheating”, Mr Murtagh said. “It is coming from a very low starting pont and for that reason I think there is plenty of scope for us to continue to grow.”

Kingspan is working on “40 to 50” tower buildings in London. “I haven’t seen a pipeline in London like it,” Mr Murtagh said, describing the trend as “very encouraging”.

In recent years, Kingspan’s large projects have included the supply of insulation products to the Stonehenge visitor centre and solar panels to Jaguar’s Landrover manufacturing plant in Wolverhampton. When it completes a re-roofing of its own plant in Yorkshire later this year, it will be largest solar roof in the UK, with 750,000 sq ft of solar panels.

The company will also provide insulation to the Midfield Terminal at Abu Dhabi International Airport, which is due to open in 2017. “It is a monumental contract for us,” Mr Murtagh said.

Kingspan has appointed John Cronin, the chairman of law firm McCann FitzGerald, and Michael Cawley, former deputy chief executive of Ryanair, as non-executive directors of the company. Their appointments follow the retirement of David Byrne and Brian Hill from the board.

The company, which completed its purchase of US architectural facades business Dri-Design in February, has the financial scope to make further acquisitions and is “actively looking” at companies in North America, South East Asia and Brazil. Mr Murtagh indicated Kingspan was “keen on Brazil long-term”, but said it was “not going to bet the house on a market like that either”.