Irish building materials group Kingspan, which supplies products such as insulated panels, has got off to a good start this year, reporting a record six-month performance.
The group, which is based in County Cavan and was one of the few companies to foresee Ireland’s property market collapse following the 2008-09 financial crisis, has reported a 54 per cent increase in half-year pre-tax profit to €154.8m on revenue of €1.47bn, up 19 per cent versus the same period a year ago.
Kingspan, which back in 2005 relied on Ireland and the UK for around 80 per cent of its sales, has since diversified, with mainland Europe now it biggest market for the sale of insulated panels used in the construction industry. Sales of such panels rose 26 per cent in the six months to June 30, with particularly strong demand in western Europe and North America.
Trading margins during the half year rose by an impressive 240 basis points to 11.4 per cent and the company is also expecting a “solid” performance in the second half, although it has raised a rise in raw material costs and changes in the exchange rate between the UK pound and euro as challenges for the rest of 2016.
Clearly Britain’s vote to leave Europe on June 23 isn’t concerning Kingspan too much – it made no mention of the referendum result in its outlook statement but highlighted that order intake in the UK between June 30 and August 12 has been up 7 per cent year-on-year. Group revenue for that period has been “comfortably” ahead of the same period a year ago, the company said in its outlook statement.
Kingspan has proposed an interim dividend of €0.10 a share, up 25 per cent on a year earlier.
Gere Murtagh, chief executive, said:
These results reflect our strongest ever six month performance, underpinned by solid organic growth and a robust contribution from the Joris Ide and Vicwest businesses acquired last year. The expansion in profit margin has helped deliver a 50% increase in trading profit, 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. We continue to acquire complementary businesses, with a total of €83m invested in two businesses in the first half and €126m paid for two further businesses after the period end.
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