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Insulated Panel Popularity Growing

The Irish Times – Tuesday, February 28, 2012


Kingspan bidding for rivals in US and Europe



KINGSPAN is in the running to buy rivals in Europe and the United States as the Irish insulation and building technology specialist seeks to strengthen its position in key markets.

The group yesterday reported a 33 per cent rise in trading profit in 2011 to €95.7 million from €72 million the previous year, mainly on the back of expansion in its insulated panels businesses in Europe and Britain.

Chief executive Gene Murtagh also confirmed that the group is in a bidding process to buy two businesses. Although he did not name them, it is understood one is a division of German steel giant, Thyssenkrup, and the other is Metlspan, a North American subsidiary of Australian-listed group Bluescope.

Both include insulation panel operations. Thyssenkrup and Bluescope expanded into manufacturing these products as they are made mainly of steel. They subsequently decided to refocus their businesses on activities that they regard as more centrally important, and are selling operations that fall outside this.

Flor O’Donoghue, analyst with stockbroking firm Davy, said Metlspan would increase Kingspan’s foothold in North America, which he said is an emerging market for the Irish group, while the Thyssenkrup operation would boost its European presence.

Mr O’Donoghue said the group had already positioned itself well to grow in the medium term.

For the last few years, Kingspan has said it is in the market for suitable acquisitions, but the company has always stressed any purchase has to be good value. Mr Murtagh said that position has not changed.

He also confirmed that the European insulation businesses purchased from CRH last year for €120 million have bedded in well and are now operating under the Kingspan brand.

The impact of that purchase accounted for around half the group’s 30 per cent revenue growth, which increased to €1.55 billion from €1.19 billion in 2011.

Insulation boards and panels accounted for the bulk of the growth in sales and profits. The figures show that excluding the acquisition’s impact, sales grew 14 per cent and trading profits were up 25 per cent.

Basic earnings per share increased in line with revenues and profits. They were up 27 per cent at 37.1 cent.

Pretax profit was up almost 40 per cent at €77.7 million from €55.6 million.

Mr Murtagh said that both the European and British markets grew during 2011, with increased refurbishment of commercial and residential buildings helping to drive demand for Kingspan’s products.

Britain and Northern Ireland accounted for 39 per cent of sales, taken together, Europe 38 per cent, North America 14 per cent, the Republic 5 per cent and Australasia 4 per cent.

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