Shares in building materials group Kingspan jumped over 8% in Dublin today after it reported a 16.5% increase in sales to €675.9m for the six months to the end of June compared to the same time last year. That translated into an almost 33.7% increase in pre-tax profits to €83.4m.
The company beat forecasts with a 32% jump in first-half earnings and said it was confident of a big rise in full-year profit.
Kingspan, which is benefiting from new environmental regulations and increasing energy awareness, reported earnings per share of 40.4 cent in the six month period, up from 30.7 cent the same time last year.
The company said that group sales were especially strong in Western and Eastern Europe with growth of 26% and 50% respectively.
During the six months, Kingspan bought a 51% stake in Eurobond, an insulated panel manufacturer in Australia, which reflects its ongoing programme of geographic expansion.
Representing 37% of turnover, the group's insulated panels division delivered 17% growth over the same time last year, and advanced in all its geographic markets. Against a stable backdrop in low-rise non-residential construction in the UK, insulated panels' sales grew by almost 11%. Ireland continued to perform well, with sales in the Beneleux countries up 33%.
The first half of 2006 also market the beginning of the next phase of Kingspan's development in Australasia.
Also representing 17% of the group turnover, the insulation board's division saw growth of 10% in H1. In the UK, amendments to the UK building codes became law, and are set to yield major benefits to the insulation business over the coming years.
Representing 18% of group turnover, Kingspan's environmental containers division grew by 17%. It said its operating performance in the first six months was especially strong in the hot water and effluent treatment business units.
Turnover in Kingspan's offsite and structural division grew by 17% over the same time last year. It represents 17% of group turnover. Much of this growth is due to the timing of the Kingspan Century deal, which was bought in April last year.
'In Ireland, the combination of a strong housing market and an evident increase in people's awareness of lower energy building methods continues to drive growth in the penetration of timber frame homes, now estimated at about 27% of all houses built,' Kingspan said.
It added that both the investors' and the public's knowledge of the long term cost benefits of timber frame, the speeds advantages and the looming regulation changes in 2008 provide the company with confidence in the medium term prospects for this business here.
Growth in the company's access floors division was up 27% and represented 11% of group turnover for the first half of 2006. Market conditions in the US have improved, while in the UK, the performance is improving on the back of an upturn in commercial office construction in London.
'Results for the first six months represent a tremendous outcome for the group,' commented Kingspan CEO Gene Murtagh. 'Our products continued to gain share against traditional alternatives, bolstered by the increasing awareness of the advantages of sustainable energy construction'.
'This dynamic, coupled with ongoing regulation change, underpins demand for our products and gives up confidence that substantial earnings growth will be achieved for the year as a whole,' he added.
Shares in the company had jumped over 8.25% in Dublin this evening, gaining €1.17 to stand at €15.35.
