February 2016: Kingspan

Gene Murtagh, chief executive, Kingspan

Strong results and a positive outlook make for a good start to 2016 for Kingspan.

Global building products company Kingspan has announced impressive preliminary results for 2015, headlined by a 47% increase in revenue to €2.77bn, and a 72% increase to trading profit, which stands at €256m.

“We are delighted to report a record performance for the group in 2015 and a strong start to 2016,” said chief executive Gene Murtagh. “The two major acquisitions completed last year have performed ahead of our expectations, with Joris Ide and Vicwest significantly expanding our presence in continental Europe and North America respectively. Our confidence in the long-term prospects of the business, supported by our conservative balance sheet, has underpinned a decision to increase the total dividend for the year by 54%.”

Acquisitions accounted for 35% of both sales growth and trading profit in 2016, and the group trading margin is at 9.2% with basic EPS up 70% to 106.7c.

The company reported strong UK and US performance along with a “relatively stable” European performance; it was the strongest year for insulated panels in the UK since 2007.

According to analysts Davy, “Kingspan has never been in a better position.” It notes that earnings forecasts are being revised upwards, the investment potential looks good and the “scale, scope and ambition of the business have been transformed,” with stock “a highly attractive investment proposition”.

Kingspan also released an insight into its business channels for 2015: 64% of its sales are in insulated panels, 24% are insulation boards, 6% in access floors and 6% environmental. 39% of its business comes from mainland Europe, 30% the UK, 20% North America, 7% the rest of the world and 3% Ireland. It sells 75% directly to end-users and 25% via distribution channels.

This year builds on momentum achieved in 2015, when the group’s half-yearly results reported a 39% revenue growth, to €1.24bn – described by Murtagh as “an exceptionally strong start to the year,” with trading profit up 61% to €111.7m. It acquired Joris Ide, a Europe-wide manufacturer and supplier of insulated panels, for around €315m; and Canadian firm Vicwest’s building products division for around €109m, opening up the North American market.

That strong start to 2016 was further enhanced when the Centre for Brand Analysis named Kingspan as one of the UK’s strongest brands for the fourth consecutive year. “A potent reputation is a critical advantage for a company,” explained Stephen Cheliotis, chairman of the Business Superbrands Council.

“As an annual barometer of brand strength, those companies performing well in this year’s Business Superbrands survey can take confidence in their reputation. Kingspan Group stood out from its rivals and has consistently delivered good quality products. The fact that the Business Superbrands process canvasses both business-to-business marketing experts and business professionals reaffirms on all counts that the brand is performing well.”