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Five years after Ireland’s building bust devastated the country’s construction sector, there are signs of life at building materials group Kingspan. Its shares closed on a five-year high, after its 2012 results showed pre-tax profit up 16 per cent to €89.95m, in spite of a difficult trading environment.
Diversification has been the key to the company’s recovery. In 2005, Kingspan relied on Ireland and the UK for 80 per cent of sales. Expansion to mainland Europe, the US and Australia has cut this in half. The company has also invested in a new suite of energy efficient insulation products, which have enabled it to increase sales over the past three years.
However, the recent fall in the value of sterling will hit earnings, as 38 per cent of group sales are based in the UK.
Kingspan’s shares, trading on 19 times earnings against a sector average of 39 times, will take some time to return to their Celtic Tiger peak price above €20.
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