Join our community of smart investors

Kingspan flourishes on insulation demand

Irish building materials giant Kingspan has posted its best-ever set of numbers
February 25, 2016

Last year provided fresh records for Irish building materials business Kingspan (KGP), both in terms of revenue and trading profit. The latter grew by nearly three-quarters to €256m. The group also invested a record €570m in acquisitions and capital investment across multiple geographies.

IC TIP: Hold at 23.82€

This is an approach that is bearing fruit. Acquisitions added €654m (roughly 35 per cent) to group sales. Insulated panel manufacturer Joris Ide was Kingspan's largest purchase to date, bulking up its operations across western and south-eastern Europe, as well as Russia. This complemented good underlying sales growth in the group's core insulation business.

In terms of trading profits, however, it was the environmental segment - which is focused on energy storage solutions and has undergone significant restructuring in recent years - that was the star performer, growing profits from €1.2m to €8.1m.

Kingspan has shown just how cash-generative it is, too. A surge in cash profits resulted in a 144 per cent improvement in free cash flow to €267m.

Analysts at Investec expect pre-tax profits of €266m in 2016, giving EPS of 121ȼ, compared with €241m and 111ȼ in 2015.

 

KINGSPAN (KGP)
ORD PRICE:2,382ȼMARKET VALUE:€4.22bn
TOUCH:2,379-2,383ȼ12-MONTH HIGH:2,607ȼLOW: 1,668ȼ
DIVIDEND YIELD:1.0%PE RATIO:22
NET ASSET VALUE:725ȼ*NET DEBT:28%

Year to 31 DecTurnover (€bn)Pre-tax profit (€m)Earnings per share (ȼ)Dividend per share (ȼ)
20111.6078.037.111.00
20121.6090.043.812.25
20131.8010251.714.00
20141.8912862.616.25
20152.7723210725.00
% change+47+82+70+54

Ex-div: 21 Apr

Payment: 13 May

*Includes intangible assets of €900m, or 508ȼ a share £1 = €1.28