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Kingspan Cautious Despite Double-Digit Sales Growth In First Quarter

LONDON (Alliance News) - Kingspan Group PLC on Friday said it expects positive momentum to ...

Alliance News 3 May, 2019 | 9:44AM
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LONDON (Alliance News) - Kingspan Group PLC on Friday said it expects positive momentum to continue in the second quarter of 2019 but remains cautious about the impact of the global economy on its business.

Ahead of its annual general meeting, the building materials company reported sales of EUR1.06 billion for the three months to the end of March, up 18% on a year prior. Underlying sales growth reflected strong volumes across key markets, partially offset by the deflationary effect of lower raw material prices, Kingspan explained.

Geographically, UK sales activity was positive during the period, and Ireland had a strong start to the year. Mainland Europe has traded solidly across the region, Kingspan said.

In the Americas, the US performed well, Canada recorded solid growth and Latin America performed strongly. Activity in Australasia has been lower than in recent years and in the Middle East activity was broadly in line with last year.

On a divisional basis, the Insulated Panels unit delivered sales growth of 22%, thanks to expansion of the business in Southern and Eastern Europe. Meanwhile, the UK, whilst delivering a good sales performance, experienced soft order intake during the quarter, the company said.

In the Insulation Boards division, sales were 12% higher year-on-year. Kingspan said it has experienced strong volume growth in many key markets, particularly in mainland Europe as high-performance insulation regained share from traditional materials. However, price deflation resulted from a decline in raw material costs.

The Light & Air segment sales were up 13%, while the Data & Flooring unit sales were up 17%, with particularly "strong" sales of datacentre solutions.

The Water & Energy division delivered sales up 14%. The company said that this unit experienced a good start to the year in most markets although rainwater harvesting sales have been softer in Australia as the residential new-build market weakened.

Looking forward, Kingspan said order intake has been "generally encouraging" so far this year and the overall order book is ahead of where it was at the same point last year.

"Whilst we anticipate reasonably positive momentum through the second quarter, enhanced by our growing geographic reach, we equally remain mindful of the unfavourable rhetoric around the direction of the global economy and any impact that may have on Kingspan," the company said in the statement Friday.

Following the conclusion of annual general meeting, Kingspan said Helen Kirkpatrick will retire as a non-executive director on the expiration of her term of office. Therefore, the company has appointed Anne Heraty as a non-executive director from August.

Heraty is the founder & chief executive of recruitment company Cpl Resources PLC. She has 20 years' experience running an international recruitment and outsourcing business and is currently on the board of Irish Business & Employers Confederation.

Kingspan said it will publish its half-year report on August 23.

The stock was trading 1.3% lower on Friday morning at EUR46.18 a share.

By Evelina Grecenko; evelinagrecenko@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Kingspan Group PLC 47.98 EUR 0.63 -
Kingspan Group PLC 47.76 EUR -0.17 -

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