DUBLIN: Shares in insulation specialist Kingspan surged on Friday after the group reported that profits rose 5.5 per cent to €163.3 million in the first six months of the year. Revenues at the Cavan-based company grew 19 per cent in the six months ended June 30 to €1.75 billion from €1.47 billion during the same period last year. Profit before tax increased 5.5 per cent in the first half to €163.3 million in the first half from €154.8 million during the first six months of 2016.
Kingspan shares had climbed 5.81 per cent to €30.33 by mid Friday morning after opening strongly. Basic earnings per share expanded at 5 per cent to 74.4 cent from 70.6 cent. Kingspan is proposing to pay an interim dividend of 11 cent, 10 per cent more than the 10 cent per share it paid for the first half of last year. Earnings before interest, tax, depreciation and amortisation – a measure of the cash generated by the company – rose 6 per cent to €209.2 million from €196.8 million.
Chief executive Gene Murtagh indicated that Kingspan continues to be on the lookout for acquisitions. “Our balance sheet is strong and ready to support our development agenda as the opportunities arise,” he said. Mr Murtagh acknowledged that demand and other issues have pushed up the cost of steel and chemicals that Kingspan uses in the manufacture of its products high. In particular, the group has seen recent rises in the cost of a chemical component, MDI, used in its products. “There’s been more global demand than might have been anticipated and there’s been other issues as well such as plant shut downs,” he said.
Kingspan is passing the cost on to customers, but its chief executive explained that there is a two- to three-month time lag in recovering the extra expense. Mr Murtagh said that the group is comfortable with the market view that full-year trading profit will be in the region of €375 million. The group’s business review said that its markets have been generally positive, even in the UK, where Brexit and a recent election have created uncertainty. It also established its first footholds in Latin America during the period, beginning manufacturing in Mexico and buying 51 per cent of Panelmet in Colombia. Trading profit in Kingspan’s key insulated panels business grew 4 per cent to €117 million. It was unchanged in the insulation boards division at €40 million. Its environmental business performed strongly, growing trading profit by 59 per cent to €6.7 million. A new division, light and air, which makes skylights, ventilation systems and related products earned €3 million in profit. Kingspan has operations in Ireland, Europe, Australia and the Americas.