Turnover at Kingspan tops €1bn as pretax profits soar

A strong performance from all its divisions, along with a €16 million contribution from acquisitions, led to record sales and earnings at Kingspan last year.

Turnover at the Cavan-based building materials group topped €1 billion for the first time, increasing by 30 per cent to €1.24 billion, while pre-tax profits rose by 40 per cent to €135 million.

But shares in the company lost 10 cent to €11.80 as the results provided no positive surprises and analysts left their forecasts for the group broadly unchanged.

However, Kingspan said 2006 had got off to "a good start" and the company remains on track to deliver operating profits of more than €160 million this year or growth of 10 to 12 per cent.

"The economies in which Kingspan operates are quite stable in general with some improvement anticipated in certain sectors later in the year," it said.

The company expects to benefit in particular from new measures to make buildings more energy efficient, which will come into effect in Britain from April. Kingspan also remains on the lookout for acquisitions.

With gearing of just 39 per cent and financing of more than €500 million available, the company is well positioned when the right opportunities come along, the company says.

Meanwhile, it will continue to focus on growing its existing business.

The company commissioned an insulated panels manufacturing plant in Hungary last year and is now looking at moving into areas such as Romania and the Ukraine.

It is also considering expansion further afield. Kingspan has been selling insulated panels in Australia and New Zealand for the last three years and must soon decide whether to stay, and add manufacturing capacity there, or go.

Overall, operating profit last year rose by 40 per cent to €145 million as margins rose to 30.3 per cent from 29.5 per cent.

"Just over half of this represents organic growth, whilst acquisitions during the year contributed €138.9 million to group turnover, adding €16.1 million in operating profits," the company said. Kingspan made five acquisitions last year, including the purchase of Century Homes in March for up to €98 million.

Basic earnings per share rose by 41 per cent to 66.4 cent and the company will pay a final dividend of 8.95 cent per share, an increase of 44 per cent, bringing the total dividend to 13.4 cent.

A breakdown of the results shows sales at its insulated panels and boards business rose by 19 per cent to €689.4 million.

Turnover from its environmental containers division was up by 54 per cent to €220 million while its off-site and structural business posted a 75 per cent rise in sales to €204 million, boosted by the acquisition of Century.