CAVAN-BASED building materials group Kingspan has repeated that it expects an "appreciable" fall in profit this year, as growth slows in the UK and Ireland, raw material costs rise and the strong euro reduces overseas earnings.
The company said before its annual meeting in Dublin yesterday that the UK and Irish markets, which account for close to 70 per cent of earnings, continued to slow, particularly in new residential construction. Kingspan closed up almost 5.4 per cent at €7.85.
The company, which makes materials ranging from insulation board to timber frames, said trading in the first four months of this year had been "more challenging than in recent times".
Speaking after the meeting, chief executive Gene Murtagh reiterated that the Irish housing slowdown would continue until late 2009 and that there was demand for housing in the UK, but affordability and credit were the issues.
He said rising raw material costs, particularly steel costs, which were rising at "a significantly higher pace" than producers' costs, were the "single biggest challenge" for the company.
Mr Murtagh said he would not give "crisp" earnings guidance for 2008, saying there was a "broad spectrum" of analysts' forecasts.
"If you want guidance, I would be trending towards the lower end of what is out there," he said. Earnings per share forecasts for 2008 range from 74 cent to 94 cent.
Kingspan said revenues were broadly similar to 2007.
The company aims to grow into central and eastern Europe, where business has broadly offset a 17 per cent decline in the insulation panel sales in the UK and Ireland. It is also looking at an acquisition of less than €50 million in India.
NCB analyst John Sheehan said the company declined to give specific guidance for 2008 due to "a lot of uncertainty out there".
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