Kingspan shares fall 10% ahead of trading news

Shares in Kingspan fell by more than 10 per cent yesterday amid nervousness ahead of a trading statement planned for next week.

More than 1.6 million Kingspan shares were traded, around double the daily average volume, as the share price slid by 18 cents to €1.52.

Dealers said there were fears of more bad news from Kingspan, which has been forced to issue a number of profit warnings since the January 2001 acquisition of US business Tate.

Market sources said the company had briefed analysts during the week, telling them it would issue an end-year trading statement next week.

It is expected to confirm that results in the current year will be broadly in line with expectations.

However, the outlook for the company next year remains uncertain. Kingspan is not expected to deal with 2003 in the trading statement but told analysts that it was not changing the guidance signalled at the time of the interim results in September.

However, it indicated that the guidance was issued against an uncertain backdrop and the visibility to the guidance had not become any better or any worse.

The lack of visibility in the difficult building materials sector appears to be weighing on the share price with investors fearing that further downgrades may lie ahead.

"There is a feeling there are more negatives than positives out there," one market source said.

Analysts' forecasts for the company are confined to a narrow range. Company broker Goodbody is looking for adjusted earnings per share (EPS) of 33.6 cents in 2002 followed by 35.6 cents in 2003. Davy's forecasts are broadly similar.

The company could not be reached for comment last night.

The construction sector has been the focus of bad news of late. Last week, it emerged that Euroconstruct, a network of industry forecasters, had cut its European growth forecast for 2003 to 0.4 per cent from 1.5 per cent.

Meanwhile, RMC, the world's largest producer of ready-mixed concrete, issued a profit warning yesterday, saying volatile markets were likely to continue into 2003.