Kingspan's decision to concentrate on higher-margin work over increasing volume paid off in the first half. While sales were up a modest 3 per cent, trading profits at the Irish insulation specialist jumped 19.2 per cent to €52.7m (£41.3m) and margins rose from 6 per cent to 7 per cent. However, the trading environment is not improving and sales growth of 8 per cent in the first four months was followed by a fall of 4 per cent in May and June.
The insulated panels business pushed turnover ahead by 3 per cent to €361.1m, but growing sales of higher specification products boosted trading profits by 25 per cent to €27.1m. Operations in Germany, Poland and the Czech Republic all achieved greater market penetration, although trading elsewhere in mainland Europe remained weak. Still, Kingspan expects to benefit from the €65m acquisition of German group Thyssenkrupp Construction announced earlier this month.
Kingspan's access floor division got a lift from North America where sales rose 22 per cent, buoyed by demand from datacentres and export contracts, which in turn helped drive profits up 31 per cent to €8.9m. The performance of the third major part of the group, insulation boards, was solid enough, but did suffer from a fall-off of activity in the second quarter.
Stockbroker Goodbody is maintaining its full-year estimates and predicts 11 per cent growth in trading profits to €106m-€107m and EPS of around 44¢ (from 40¢ in 2011).
| KINGSPAN (KGP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 734¢ | MARKET VALUE: | € 1.23bn | |
| TOUCH: | 730-734¢ | 12-MONTH HIGH: | 837¢ | LOW: 568¢ |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 467¢* | NET DEBT: | 22% | |
| Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 736 | 36.2 | 17.3 | 4.5 |
| 2012 | 757 | 44.5 | 22.1 | 5.0 |
| % change | +3 | +23 | +28 | +11 |
Ex-div: 29 Aug Payment: 21 Sep *Includes intangible assets of €396m or 236¢ a share £1=€1.275 | ||||
