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Kingspan's rewards for bosses criticised despite rise in sales

By Gavin McLoughlin

More than a quarter of shareholder votes went against a new incentive scheme for senior staff during Kingspan's annual meeting - as the building materials giant saw sales growing by 24%.

Kingspan employs nearly 900 people in Northern Ireland and is best known as the sponsor of the Ulster Rugby stadium in Belfast.

The company owns Kingspan Environmental, which employs 800 people in Portadown, and insulating materials firm Springvale EPS in Balllyclare.

Sales of €831.2m (£699m) for the three months to the end of March were up 24% year-on-year, on the back of a record year overall in 2016.

The firm, which is head-quartered in Kingscourt, Co Cavan, held its AGM in Dublin yesterday.

The incentive scheme had been criticised by shareholder advisory firm ISS, who took a view that the plan released too many shares to executives at a certain performance level.

Chief executive Gene Murtagh defended the plan, saying he was "surprised with the amount of focus it's getting for a business that's performed so well over the last 10 years".

"I think if you look back, in essence we've knocked it out of the park year after year after year," he said, adding that the company would take the result on board and re-engage with shareholders as always.

Last year around one-third of shareholder votes went against the company's remuneration package.

Earlier, the company released a trading update that said it had experienced a good start to the year. The latest trading update also said the UK, which accounts for some 27% of the business, remains "solid overall, although is a little softer than at the turn of the year".

Mr Murtagh said that the company's "key challenge" for the second quarter was dealing with a rise in input costs, which is set to put pressure on the company's margins.

"We're seeing considerably more cost inflation in the second quarter than we anticipated, and, as a result, our selling prices have to respond accordingly. That's really the key challenge in this quarter, passing on those costs," the chief executive said.

Mr Murtagh said Kingspan was seeing potential customers push back decisions to later in the year, adding that it might be partly Brexit-related.

He said the pricing environment for acquisitions had disimproved, fuelled by cheap debt and a general uplift in positivity.

"I've never had a pipeline as positive, and I've never seen pricing as bad," Mr Murtagh said, adding that the company's full-year acquisition spend was more unpredictable than in prior years.

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