Kingspan (KGP) specialises in providing insulated panels for new buildings and insulation boards that can be retrofitted on existing structures. Trading in the first half started on an encouraging note, but building activity in mainland Europe remains mixed - a trend that is expected to extend into the second half.
The overall performance was positive but patchy. Strong sales growth in the UK, which accounts for 38 per cent of group revenue, was countered by weakness in France and the Benelux region. Sales were flat in Germany, while political tension weighed on the Turkish market. Non-residential activity in the US was helped by the rising market penetration of insulated panels, although growth in the country was held back by weak office construction. US sales next year will be boosted by the recent acquisition of a building insulation business from packaging group Pactiv.
Insulated panels, which account for around 60 per cent of group turnover, delivered sales growth of 9 per cent, driven almost entirely by higher volumes. On the insulation boards side, sales were virtually flat as price increases made up for falling volumes, although a shift in the mix towards higher margin products lifted the trading profit by 32 per cent to €17.7m.
Broker Davy currently expects full-year profits of €124m and EPS of 60.1¢ (from €102m and 51.7¢ in 2013), but expects to nudge its forecasts ahead.
| KINGSPAN (KGP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,382¢ | MARKET VALUE: | €2.37bn | |
| TOUCH: | 1,380-1,384¢ | 12-MONTH HIGH: | 1,480¢ | LOW: 1,151¢ |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 534¢* | NET DEBT: | 12% | |
| Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2013 | 852 | 47.1 | 23.0 | 5.5 |
| 2014 | 889 | 60.0 | 29.2 | 6.25 |
| % change | +4 | +27 | +27 | +14 |
Ex-div: 3 Sep Payment: 26 Sep *Includes intangible assets of €418m, or 244¢ a share £1=€1.26 | ||||
