Kingspan was treated to a round of analyst upgrades yesterday, after reporting solid sales growth for 2004 and forecasting another good performance in 2005.
The building materials group said in a trading update it was on track to post sales growth of more than 18 per cent for the year just ended.
This would equate to turnover of almost €1 billion, with some analysts now expecting sales to top this level in 2005.
Kingspan is expecting after-tax earnings for 2004 to be up 30 per cent on the previous year, ahead of market expectations.
Davy analyst, Mr Florence O'Donoghue, raised his 2005 forecasts for the group by 5 per cent on the back of the trading update.
He is now expecting earnings per share of 51.8 cents for the full year, up from his previous projection of 49.3 cents.
The upgrade was driven by Kingspan's new revenues forecast, although Mr O'Donoghue acknowledged margin pressures could take some "gloss" off this.
Margins rose from 10.1 per cent to 10.7 per cent last year, but higher costs for raw materials are expected to push them back down slightly in 2005.
Kingspan shares surged on the release of the update, reaching a new high of €7.70. The stock closed at €7.63, up 37 cents on the day. Mr O'Donoghue believes that current momentum could push shares up to €8.00.
Kingspan said it would report net debt for 2004 of between €110 and €112 million, compared to €121 million for the previous year.
The market had been expecting slightly lower debt levels, with the difference attributed to acquisition expenditure of €20 million over the year.
The biggest deal saw the purchase of Belgian panel business, Apco, for €15 million.
Kingspan is expecting the bolt-on deals to deliver volume and efficiency benefits this year, particularly when combined with a 2004 capital investment spend of €60 million.
"The company expects 2005 sales growth to be at a similar rate to that achieved in 2004," Kingspan said, pointing to the benefit of acquisitions and "an element of price inflation".
Panel and insulation sales were up by more than 20 per cent in 2004, while environmental container sales rose by more than 10 per cent. The group also said access floor sales had grown strongly in the US.
