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Building giant Kingspan shrugs off Brexit impact concerns

Building materials giant Kingspan has shrugged off concerns over how political turmoil in the UK could impact the construction industry.

The company showed its largest jump in market capitalisation in a single day last Friday.

The business 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 Ballyclare.

The Cavan-based company released results for the first half of the year that were slightly ahead of forecasts.

That led to a 9.9% jump in share price to €31.50 (£28.70), driving market capitalisation to over €5.6bn (£5.1bn) on Friday, a day when the overall ISEQ index of Irish shares fell by more than 1%. The first half results saw revenue rise 19% to €1.75bn (£1.6bn), which resulted in a trading profit growth of 6% to €178m (£162m).

Chief executive Gene Murtagh described the results on a call to analysts as "a very positive start given the uncertainty in the UK and the relatively severe raw material inflationary environment that we've gone through".

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The company manufactures high performance insulation products and is a key employer in the border region.

Analysts have previously cited it as a company that could be hit by Brexit given its border location and its big presence in the UK market.

But despite currency headwinds, the results showed that shares in the company should be "a core holding in construction portfolios", Goodbody analyst Robert Eason wrote in a briefing note.

The company had shown better than expected underlying progress that reflected stronger organic sales growth and strong progress on raw material input cost recovery, wrote Eason.

The company is expected to deliver a continued strong performance across much of Europe and the Nordics, with stable activity expected in North America, he wrote, adding that Goodbody expects to raise its 2017 trading profit forecast for the company by 2% to 3%.

In April, 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%.

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.