Kingspan predicts 10% fall in profit

Kingspan said it expects operating profit to fall about 10 per cent in the first half of the year as the bad weather contributed to a slow start to the year.

IN an interim management statement this morning, the company said there would be no significant change to its net debt, but sales for the first few months of the year remained solid and were 6 per cent down on last year.

There had been a "noticeable pick up" in activity levels in the latter six weeks, it said, and the recent pattern of improving activity is expected to continue for the coming months.

Market conditions in the UK have remained stable, the firm said, supported by some improvement in residential construction and a solid outcome in non-office related commercial building activity.

However, the newbuild market in Ireland has weakened further, and its mainland Europe market began the year at a weaker pace than last year, although some improvement had been seen in recent months.

In North America, the low rise non-residential market has been "solid", it said, but office activity has weakened as predicted.

The first four months of the year saw sales revenues for insulated panels fall 7 per cent, but Kingspan said order intake has been strong and gains were seen in almost all markets. Insulation board sales revenue was up 7 per cent, driven solid newbuild and refurbishment activity in the UK, and continued growth in of Kooltherm products across all markets.

Weakness in mainland Europe markets saw revenue in the environmental and renewable division fall 3 per cent, and access floor sales revenues were down 19 per cent, mainly due to a reduction in office activity globally.

Kingspan said there was scope for a degree of measured optimism through 2010 as "encouraging" orders in some sectors and growing stability took hold.

"Looking ahead, the sense of nervousness that prevailed in all of the group's markets a year ago, is less evident at present," the company said.