It's not always straightforward weighing up the merits of a corporation that has been on something of a buying spree. Revenues and cash flows can have immediate beneficial effects, but the desired effect on margins and earnings through cost synergies can take time to accrue. However, even though Cavan-based Kingspan Group (KPG) has snapped up a succession of subsidiary enterprises in recent years, there's no doubt that its half-year comparatives reflect a heartening organic performance.
The building materials group forked out €83m (£71m) on two acquisitions in the first half, including the April deal to acquire UK-based metal roofing specialist Euroclad, and has snapped up another brace of businesses for €126m subsequent to the period end. The above-mentioned lag might be evident in the respective contributions from the group's acquisitions to sales and trading profit growth of 15 per cent and 7 per cent respectively. But even if there's a staggered effect at play, Kingspan's adjusted operating margin ratcheted up 240 basis points, feeding through to trading profits of €167m, a 55 per cent increase from the comparative period at constant currencies.
Both Goodbody and Davy Stockbrokers will publish upward revisions to their estimates based on these figures, while UBS has raised its full-year earnings forecast from 127¢ to 139¢ a share, and from 142¢ to 151¢ in 2017.
| KINGSPAN GROUP (KPG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,485¢ | MARKET VALUE: | €4.42bn | |
| TOUCH: | 2,480¢-2,490¢ | 12-MONTH HIGH: | 2,607¢ | LOW: 1,738¢ |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 746¢* | NET DEBT: | 26% | |
| Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2015 | 1.24 | 100 | 46.5 | 8.0 |
| 2016 | 1.47 | 155 | 70.6 | 10.0 |
| % change | +19 | +54 | +52 | +25 |
Ex-div: 1 Sep Payment: 23 Sep £1=€1.16 *Includes intangible assets of €945m, or 532¢ a share | ||||
