Kingspan posts operating profit

Construction firm Kingspan recorded its first operating profit growth in the three years in the first six months of 2010, despite the impact of the severe weather earlier this year.

The company said operating profit grew 9 per cent to €33.1 million, helped by tight control of costs, and confirmed it would resume paying dividends.

"During the first two months of 2010, construction activity throughout all of Kingspan's markets was impacted by an unusually severe and prolonged winter, leaving quarter one's operations below that of the previous year," the company said in a statement.

"During that period however, the order book across the group was building and through the second quarter sales picked up considerably, particularly in June."

First half sales rose to €558.7 million compared to €552.5 million in the same period in 2009. However, underlying turnover was down 3.9 per cent.

The Irish market continued to perform at a weaker level than Kingspan's other sectors. In its insulation market, sales volumes fell by 10 per cent. However, although the market remains of come concern, the majority of the company's business is done outside Ireland.

Chief executive Gene Murtagh remained cautious. "Positive trends in first half order intake across the business point to a robust and solid outcome this year and together with the substantial progress made in lowering costs and debt, there is now scope to restore an interim dividend to shareholders," he said.

"Nevertheless, we remain mindful that recent global macro indicators remain cautious and mixed, while input price increases will present their own challenges in the months ahead."