DUBLIN (Reuters) - Shares in Irish building materials firm Kingspan (KSP.I) surged 8 percent on Friday after it reported better-than-expected profits for the first half of the year on strong performance from recent acquisitions and its core insulation business.
The firm’s chief executive Gene Murtagh, who has warned in the past about British construction investment being postponed because of Brexit, said the British market was “particularly robust” in the second three months of the year.
For the first six months of the year, Kingspan reported a 15 percent rise in revenues and a 10 percent rise in trading profit from the same period last year.
Acquisitions contributed 15 percent to sales growth and 12 percent to trading profit growth in the period, it said.
Kingspan generates around a quarter of its sales in Britain, although that reliance has been falling as it diversified further into Europe last year, including the purchase of Spain’s Synthesia group as part of a record 600 million euro acquisition spree.
Kingspan also entered the South American market last year with the purchase of Brazilian insulated panel company, Isoeste.
Revenue in Kingspan’s core insulated panels business was up 14 percent while insulated boards were up by 15 percent.
“Performance was helped by improved momentum in the second quarter after a sluggish start to the year due to prolonged winter weather conditions,” Murtagh said in a statement.
“This momentum has continued into the second half in a number of key markets and underpins our encouraging outlook for the rest of the year,” he said.
Kingspan’s trading margin fell 50 basis points to 9.7 percent compared to a year ago, in part due to the initial dilutive effect of recent acquisitions and a lag in the recovery of recent raw material cost increases, it said.
Stockbroker Davy described the results as “very impressive” with trading profit 6 percent better than expected. Goodbody Stockbrokers said at first glance they envisaged a 4 percent upgrade to its full-year trading profit forecast to 430 million euros.
Shares in Kingspan were up 8.3 percent to 42.04 euros at 0755 GMT.
Reporting by Conor Humphries; Editing by Kirsten Donovan