TRADING in the first six months of the year was considerably ahead of last year at Kingspan, the Co Cavan based building materials and bulk container group. Mr Eugene Murtagh, chairman of the group, told shareholders at its annual general meeting yesterday that there has been some improvement in the two sectors of the British construction market that are most important to Kingspan - the private industrial and commercial markets.

"The prospects for the UK construction economy looks increasingly favourable for this year and especially into 1997," said Mr Murtagh.

Kingspan made pre tax profits of £2.56 million on turnover of £39.5 million in the first six months of last year.

Mr Murtagh added that the sluggish levels of growth seen in the British market was a strong incentive for consolidation in the building materials industry. However, Kingspan was not likely to be a target for takeover, he said.

The group felt that its strategy of organic growth "still had a distance to run", he said. However, Kingspan would look at possible acquisitions, particularly if it felt that one of its major rivals might be targeting a weaker company, said Mr Murtagh after the meeting.

Mr Murtagh added that the group's institutional shareholders would probably support a fund raising to allow the group to spend up to £40 million. But he said a company would have to be a "particularly good fit" before Kingspan would consider such a large acquisition.

The group could probably fund an acquisition of up to £10 million without having to go to the market to raise money, he said.

Earlier this year, Kingspan paid £8.6 million for S & D, a Northern based manufacturer of polythene bulk containers, which was partly funded by a £3 million placing.