Kingspan Group, the Cavan-based building products operation, continues to record strong growth with a 38 per cent rise in pre-tax profit from £13.07 million to £18.0 million in the six months ended June 30th, 1998. Further growth is anticipated. Kingspan should have little difficulty in meeting brokers' predictions of a rise in profits from £30.5 million to £38 million for the full year. Chairman Mr Eugene Murtagh said the group is fortunate in having very little exposure to the Asian markets which account for just 3 per cent of sales. "To the extent that there has been any impact, it has been compensated for by product and market developments for these products in Ireland, Britain, continental Europe and the US."
Kingspan, he added, is taking advantage of a number of positive developments that are emerging from further proposed revisions to building regulations in Britain. These include the greater use of products to reduce energy usage. While Kingspan noted the uncertain global outlook, it is confident its products will continue to benefit from "conversions from systems that will have difficulty in meeting site safety recommendations and the requirements of the revised building regulations".
The Irish and other European markets are expected to perform in line with budget. However, the group continues to focus on central and eastern Europe as areas offering good prospects. Asked about further acquisitions, Mr Murtagh said there was "nothing too close" at the moment, noting that value for money was a prime goal. Kingspan was keen to buy Metsec, the British insulation company, but withdrew because the consideration needed to make the acquisition was too high.
The latest group results show a 16 per cent rise in sales to £137.2 million. Profit margins widened from 11.1 per cent to 13.2 per cent. Earnings per share grew from 6.0p to 8.2p. Shareholders are to benefit with a rise in the interim dividend from 0.42p to 0.50p. The results include full contributions from the acquisitions made in 1997 and the takeover of a composite panel manufacturing business in the Czech Republic. This new business has broken even and the rationalisation programme is on target, said Mr Murtagh. Group gearing has risen from 37 per cent to 43 per cent. Interest is comfortably covered at 16.1 times.
