Belfast Telegraph

Kingspan shares up 10% after unexpected profit rise

By Peter Flanagan

Shares in Kingspan rose almost 10% as the building materials company said it was resuming dividend payments after better than expected first-half results.

The company, which has a solar panel factory in Portadown, Co Armagh, surprised the market when it announced an increase in its operating profit of 9% to €33.1m in the six months to the end of June.

The company had forecast a 10% fall in profit last May.

Sales were up slightly at €558.7m compared to €552.5m last year.

Adjusted earnings per share climbed 11.3% to €0.15.

The growth was attributed to better than expected performance in the insulation business in the US, Europe and Australia, as the insulated panel business grew.

The company said: "Sales rose in excess of 50% over prior year [in Australia] and the Benelux (Belgium, Netherlands, Luxembourg) performed robustly."

Net debt was reduced by €95.7m to €135.1m through "tight cash management" and may be reduced by another €20m or so this year.

The company said it will resume paying a dividend, set at €0.04 per share.

That dividend is the first for two years and comes six months ahead of schedule.

The building materials firm said it was also considering possible acquisitions before the end of the year.

Company chief executive Gene Murtagh said the company had looked at possible purchases earlier this year and was now "running the rule over a number of companies" with a view to making an acquisition.

Mr Murtagh said he was pleased with the group's results but warned they were still a long way from the peaks of 2006.

"While the results show a near 20% swing between where we are now compared to last May when we issued our guidance, that swing equates to only about €5m so it was not really that big a change," he said.