Acquisitions still on agenda for Kingspan

Cantillon: Insulation maker will probably use some of its cash pile in coming months

Kingspan chief executive Gene Murtagh has always made a virtue of the group’s cautious approach to acquisitions, stressing that it will only do them if the price is right. Photograph: Cyril Byrne

Most analysts believe that insulation maker Kingspan is heading for another year of "double-digit" – that is more than 10 per cent – growth after the Irish group reported record first-half profits and revenue on Friday.

Trading profit was up 12 per cent at €230 million in the first six months of the year while revenues surged 18 per cent to €2.2 billion. After crunching the numbers that the Cavan-headquartered manufacturer published, stockbrokers’ analysts noted that its first-half results were better than predicted and they forecast that trading profit for the year should surpass €490 million.

Both insulation divisions provided the highlights of Kingspan’s first six months. Trading profit in the insulated panels business grew 19 per cent to €146.5 million during the period, while in the insulated board division, it rose 14 per cent to €60.4 million.

If there was a lowlight, it could be Kingspan's failure to complete any acquisitions in the first half of the year. However, chief executive, Gene Murtagh, has always made a virtue of the group's cautious approach to such deals, stressing that it will only do them if the price is right.


This time around he said it was the fact that Kingspan did not manage to close any deals in the first half, rather than any unwillingness to do them, that was behind the absence of acquisitions. However, Murtagh indicated that the group expected to make a few purchases during the rest of the year.

Belgian foam and insulation maker, Recticel, was one that got away. Kingspan wanted to buy the group's insulation division. It approached Recticel with a deal to purchase the entire outfit, but with the proviso that the Irish group would immediately sell on the foam manufacturing arm to another player. Recticel ultimately said no.

Had Kingspan done that deal, it would have eaten up more than half the €600 million that the group has on hand to fund acquisitions. As it stands, Kingspan still has that cash, and by the looks of it, will probably use at least some of it in coming months.