KINGSPAN SEES FIRST INCREASE IN OPERATING PROFITS IN THREE YEARS - Could any company have been more ruthlessly exposed to a construction downturn than Kingspan, which is best known for making insulation? But its results for the first six months of the year show an improving picture. The Co Cavan based building materials group has seen its first growth in operating profits in three years. A further reduction had been expected but the operating profits are actually up more than 9% to €33.1m. Shareholders who have stuck with the company will also have something to think about this morning - a resumption of dividends. While the company seems to be a lot more optimistic about many of the international markets that it operates in, it says there is little to savour from its Irish story.
Kingspan's chief executive Gene Murtagh says that while markets remain difficult there is an improvement out there. He points out that 95% of the company's business is outside Ireland, the majority of it in the UK, which has seen resumed growth in the residential market. He also says that Europe represents great growth opportunities, especially in the Benelux countries. Mr Murtagh says he is confident that Kingspan has 'very clear visibility' on the next six months at least and reassures shareholders that dividends will remain.
On the Irish situation, Mr Murtagh says that Kingspan had very much been associated with the new build business, which has now more or less ceased. But he says the refurbishment end of the business is still reasonably good. He says the current low run rate of house building at about 5,000 is as false as the high of 80,000 at the peak of the housing market in 2007. He says this low is actually unsustainable for the size of the country's population and says a more realistic figure of 30,000 is desirable.
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MORNING BRIEFS - Business support services group DCC has agreed to buy French company Comtrade for €11.4m. Comtrade distributes consumer electronic and audio visual products, such as iPods and MP3 docking stations and speakers, to the retail sector in France. Based in Paris, it has 65 employees.
*** This week we are going to hear much more from big companies fighting their way out of recession and a get an insight into whether the economy - here and abroad - is functional. Aer Lingus, CRH, Paddy Power, Glanbia and Irish Continental Group amongst others report this week.
*** It seems the lager brand Fosters may be taken over by rival SABMiller which brews Miller and Grolsch. Shares in Fosters Group, which underwent a restructuring earlier this year, gained more than 6% this morning. The Sunday Times put a value of around €8.5 billion on any buyout of the company's beer division, making it, one of the last mega-deals left to be done in brewing. This morning there are reports that a big Japanese brewery may also be interested.
*** On the currency markets, the euro is worth $1.2714 cents and 81.72 pence sterling.
