Kingspan shares hit record high on results

Shares in Kingspan hit a record high of €11.13 yesterday as the group posted better-than-expected first-half results and raised its full-year earnings estimates.

The Cavan-based building materials group announced a 55 per cent increase in first-half pretax profit to €62.4 million, ahead of market expectations.

Operating profit was up by 54 per cent to €67 million on sales of €580 million, a 32 per cent rise.

"Continued moves towards energy efficient products, modern methods of construction and environmental solutions remain the main contributory factors in Kingspan's growth," the company said.

Chief executive Gene Murtagh said Kingspan now expected to deliver full-year operating profits of around €143-€144 million, compared to previous estimates of €140 million.

Turnover this year is expected to top the €1 billion mark, rising to €1.25-€1.3 billion.

Mr Murtagh said Kingspan enjoyed a good performance from its insulated panels business, where revenue rose by 29 per cent to €212 million, or 36 per cent of group turnover.

Although the group faced a significant increase in input costs, it succeeded in recovering these in the marketplace.

Competition in its insulation products business proved intense but, nonetheless, sales rose by 16 per cent to €109 million and the division is expected to receive a boost from proposed amendments to United Kingdom building regulations, scheduled for next year.

Sales of environmental containers rose by 47 per cent to €103 million, but turnover in the group's raised access flooring business fell by 4 per cent to €58 million as the commercial high rise construction market in Europe and North America proved weak.

A focus on cutting costs allowed the group to lift operating profits in the division by €3.6 million to €4.4 million, however.

Finally, the group's off-site and structural division saw revenue rise by 95 per cent to €98 million in the first-half, boosted by a three-month contribution from timber-frame manufacturer Century Homes, which it acquired earlier this year.

Mr Murtagh said that Kingspan remained on the lookout for further acquisitions but was unlikely to repeat its first-half spending spree when it acquired five businesses for a total of €137 million.

Kingspan, which reported a 56 per cent rise in earnings per share to 30.7 cent, will pay an interim dividend of 4.45 cent, up 31 per cent.

After breaching the €11.00 level, the building materials group's share price fell back slightly to close at €10.96, up six cent on the day.