Building materials firm Kingspan first-half profits up 50% to €154m

Kingspan shares surged after the insulation and building materials maker reported that profits hit a record €155 million in the first six months of this year.

The group said on Monday that revenues rose 19 per cent to €1.47 billion in the six months ended June 30th from €1.24 billion during the same period last year.

Pretax profit rose 54 per cent to €154.8 million in the first half of the year from €100 million in the six-month period.

Trading profit rose at a similar rate, growing to €167.3 million from €111.7 million.

Most market analysts expected trading profit to be between €140 million and €150 million.

The company’s shares surged by more than 5 per cent in early trade, reaching €24 from an opening quote of €22.79 after trade began in Dublin.

Shortly ahead of the close, they were up more than 7.3 per cent at €24.46. By that time, investors had bought more than 1.28 million of its shares.

Basic earnings per share rose 52 per cent to 70.6 cent from 46.5 cent. Kingspan intends to increase its interim dividend by 25 per cent to 10 cent from eight cent.

Chief executive Gene Murtagh confirmed that the results were the company's "strongest ever" six-month performance, driven by organic growth and contributions from acquisitions Joris Ide and Vicwest.

“The expansion in profit margin has helped deliver a 50 per cent increase in trading profit,” he said, “and with good order intake momentum in the second quarter continuing into the current trading period, we expect a solid performance in the second half.”

Recovery

The group noted that the Irish market continued its recovery during the first half of the year with volumes significantly ahead of the same period last year.

In its biggest market, continental Europe, growth was solid in Germany, France and the Netherlands, while Belgium was flat.

British sales were in the “mid-single digit levels” but orders were slightly ahead of that rate. Revenues in the Americas rose 15 per cent.

Sales in Australia were marginally ahead of last year and orders were significantly ahead.

Turkey and the Middle East in general were "more difficult" the group said, but should stabilise in the near term.

Sales of its biggest product, insulation boards, rose 9 per cent to €347.4 million from €319.2 million.

Access floors rose 3 per cent to €91.7 million from €85.7 million. Environmental products were up 3 per cent at €79.5 million from €77.5 million.

Kingspan has earmarked €209 million for acquisitions so far this year and spent €83 million in the first half, during which it bought Euroclad in the UK and Tankworks in Australia. It followed with Essman in July and Eurobond this month.

It invested €55 million in its existing businesses. It completed a new manufacturing line in Belgium and made significant progress with extending and building plants in Nordic countries, United Arab Emirates, Australia, North America and Mexico.