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Acquisitions boost Kingspan

RESULTS: Acquisitions and an improving economic climate are boosting sales, but the shares are not cheap.
February 25, 2014

The fortunes of insulation specialist Kingspan (KGP) are inextricably linked to the pace of economic growth in the UK, mainland Europe and the US, so it was inevitable that last year's performance delivered encouraging signs in some areas and tougher trading conditions in others.

IC TIP: Hold at 1400€

Sales of insulation panels, which account for more than half of the group total, rose 23 per cent to €1.04bn (£852m). Progress was superficially most notable in mainland Europe, where sales were up 46 per cent, but strip out the acquisition of ThyssenKrupp Construction late in 2012 and sales growth was a modest 1 per cent. Conditions were equally tough in Britain, where a strong second-half performance was offset by a weather-struck first half. Even so, with 7 per cent sales growth in the US, overall trading profits were up 23 per cent at €75.6m.

Meanwhile, sales of insulation boards fell 3 per cent to €455m. The pace of refurbishment-led demand in the UK has slackened, while political troubles in some European countries saw rigid board sales slip by 8 per cent to leave overall trading profits in the division flat at €29.5m.

Investec is forecasting 2014 pre-tax profits of €127.4m and EPS of 61.3¢.

KINGSPAN (KGP)
ORD PRICE:1,400¢MARKET VALUE:€2.38bn
TOUCH:1,400-1,402¢12-MONTH HIGH:1,454¢LOW: 835¢
DIVIDEND YIELD:1.0%PE RATIO:27
NET ASSET VALUE:501¢*NET DEBT:13%

Year to 31 DecTurnover (€bn)Pre-tax profit (€m)Earnings per share (¢)Dividend per share (¢)
20091.135728.7nil
20101.195629.210
20111.557837.111
20121.639043.812.25
20131.7910251.714
% change+10+13+18+14

Ex-div: 23 Apr

Payment: 15 May

*Includes intangible assets of €386m or 227¢ a share

£1=€1.22