Kingspan confident recovery is on track

Grant Prior 12 years ago

Construction products giant Kingspan is confident the UK market has turned the corner after enjoying a rise in profits for the first time in three years.

The firm has decided to start paying interim dividends again to shareholders as “recovery was clearly evident in many of the group’s businesses in the UK.”

Results for the six months to June show sales of insulated panels were up strongly during the second quarter to record an overall rise of 4% for the half year.

Kingspan said: “This was largely driven by a solid performance in the retail sector, strong refurbishment activity, and a gradual resumption of speculative development.

“Although clearly lacking the buoyancy of a few years ago, this outcome and the related pipeline of medium term activity demonstrates that this business unit has passed the recent trough.”

Sales were flat in the UK insulation business due to a depressed commercial office market but “a mild improvement in new housing numbers, strong growth in refurbishment activity, and continued growth in penetration by Kooltherm all contributed to a result that outperformed the industry.”

The Access Floors division is still being hit hard by the downturn in the commercial building market with turnover down 35% and no sign of an improvement in volumes until 2011.

Things were brighter in the Environment & Renewables sector where a recovery in new home construction saw sales grow for hot water systems and solar-thermal products.

Group turnover was €558.7m from €552.5 last time as operating profit rose 9.2% to €33.1m

Gene Murtagh, Chief Executive Officer, said: “We are encouraged to have resumed profit growth again for the first time in three years.

“Positive trends in first half order intake across the business point to a robust and solid outcome this year and together with the substantial progress made in lowering costs and debt, there is now scope to restore an interim dividend to shareholders.

“Nevertheless, we remain mindful that recent global macro indicators remain cautious and mixed, while input price increases will present their own challenges in the months ahead.”

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