Kingspan sees revenues jump 30%

Insulation manufacturer Kingspan beat forecasts when it reported a 30 per cent increase in revenues in 2011 up to €1.55 billion, according to its annual results released this morning.

"Kingspan delivered a strong performance last year helped by significant sales growth and stable margins. Although the international economic outlook remains uncertain, the Group continues to expand its global presence in markets which are driven by conversion to high performance insulation products and an increasing desire for lower energy living standards," said Gene Murtagh, chief executive of the group.

Given the trend amongst Irish corporates to move their main listing to London, in an interview with RTE, Mr Murtagh said that Kingspan has no intention of doing so.

Operating profit increased by 35 per cent to €90.9 million, up from €67.4 million in 2010, while EBITDA (earnings before interest, taxes, depreciation and amortisation) jumped by 24 per cent to €133.6 million. Goodbody Stockbrokers noted that the results were ahead of its forecasts.

"Overall, this is a comforting set of results and a reassuring outlook, which highlight why we believe Kingspan should be a core holding for any portfolio," the broker said in a statement.

Following the acquisition of CIE's insulation business, which significantly strengthened the group's mainland European presence, revenues for the insulation boards business grew by 85 per cent to €460 million (up 9 per cent excluding the acquisition).

In insulated panels, Kingspan reported "strong volume growth" across most regions, with revenue up by 19 per cent to €758 million. Due to "particularly buoyant sales" in mainland Europe, its environmental division returned to growth, with revenues up by 18 per cent to €202 million. Despite "acute weakness" in the office construction market globally, sales in Kingspan's access floors division still increased by 6 per cent to €126 million.

The company also saw its cashflow jump, almost doubling to €76.9 million, but its net debt also increased, up to €170.1 million from €120.8 million in 2010, reflecting acquisitions of €107 million..

The company's final dividend is 6.5 cent, indicating that the total dividend for 2011 increased by 10 per cent to 11 cent.

In August, Kingspan completed a 10-year $200m Private Placement, which extended the weighted average maturity of its debt facilities to four years.

Looking ahead, in a statement the company said that the first half of 2012 should deliver "continued, albeit moderating, growth".

"As has been the case in recent years, it is difficult to see too far ahead with sentiment in most markets still quite variable on a month to month basis. On the one hand, a robust retail and food sector, gradual improvement in the commercial and industrial segments, and relatively stable housing starts in the UK and North America, all augur well for the industry in general.

"However, this must be counter-balanced by the on-going threats posed by continuing global uncertainty, a persistent lack of credit and the curtailment of public sector capital programmes in most markets. In addition to this, quarter two will pose the challenge of passing through further raw material increases".