Insulation specialist Kingspan expects further profit growth in the second half of the year after two acquisitions helped it to return record results for the first six months of 2015.
Revenues at the insulation and construction materials manufacturer rose 39 per cent to €1.2 billion in the first half of the year, figures released by the group yesterday show.
Trading profit for the first six months of the year rose 61 per cent to €111.7 million from €69 million during the same period in 2014. Operating surplus grew at a similar rate, to €108 million from €67 million.
Chief executive Gene Murtagh said the first half of 2015 had been a record trading period for the group. Its purchase of European rival Joris Ide in March and Canadian operator Vicwest in May helped boost profits in its key insulation panels and boards divisions.
Profits in its insulated panels business rose 61 per cent to €70.3 million over the period, while they increased by 60 per cent to €28.3 million in the insulation boards division.
Profit growth
Mr Murtagh said the acquisitions were responsible for half its profit growth, although the group took them over just two to three months before the period’s end. On that basis, he said Kingspan expects that the “full impact” of both deals on profit growth will be stronger in the second half of the year.
The group’s net debt more than trebled from €113 million to €449 million as a result of the purchases. However, its net interest costs only rose to €7.1 million in the first half from €6.9 million in 2014.
“The bottom line is that we invested €450 million in the first half with virtually no impact on the profit-and-loss account,” Mr Murtagh said.
Kingspan completed the purchase of Finnish player, SPU for €22.5 million in July. Mr Murtagh did not rule out doing further deals this year, but signalled that it would focus on continuing to integrate Joris Ide and Vicwest into the overall group.
“These things take a little bit of digesting, but the early stages have been very encouraging, they have both plugged in very smoothly,” he noted.
Mr Murtagh believes the Republic’s building industry will continue growing over “the next few years”. Its Irish business accounts for about 3 per cent of the total and Mr Murtagh said it was very positive about its prospects.
The group has businesses in Europe, North America and Australia, but no direct exposure to China, although it does buy some components from suppliers based there.
Its shares suffered along with those of most other Irish-listed companies as the fallout from events in China hit European markets. Shortly before close of business, Kingspan’s price was down 3.93 per cent at €20.53.
