A boost from two deals done this year has placed trading profits at insulation specialist Kingspan on track to hit €250 million, 68 per cent more than in 2014.
Kingspan said in an interim statement that its acquisitions, Joris Ide in Europe and Vicwest in Canada, helped to increase sales by 44 per cent, while the euro's weakness and cheap raw material costs benefitted profits.
“Assuming current exchange rates prevail, we expect to deliver a full-year trading profit of approximately €250 million (plus 68 per cent versus 2014),” the group said in a statement.
However it noted that most of the traditionally slower fourth quarter remains. It also said results in the first three months of next year will have to factor in a loss-making winter trading period for its two acquisitions. Those were not consolidated into its 2015 accounts.
Winter losses
Stockbroking firm, Davy, estimated that the losses for the winter period could be €7-8 million, which would effectively cut trading profit to €242-243 million on a like-for-like basis. Davy also pointed out that the lower raw material costs and favourable exchange rate may not be repeated next year. Kingspan’s net debt increased by €306.1 million to €413.8 million at the end of September on the back of the two acquisitions. The company forecast yesterday that this would drop to €380 million by the end of this year.
Kingspan described 2015 as a significant period. “Integration of both the Joris Ide and Vicwest businesses remains fully on track,” it said.
“Group underlying sales have shown circa 3 per cent growth for much of the year with individual markets trending differently.” It expects this to continue in coming months.
Sales in the first nine months of the year were up 44 per cent at €2 billion. The two acquisitions contribued to a particularly strong third quarter when sales were up 54 per cent. Excluding the impact of the new businesses and the euro’s weakness, underlying sales rose 3 per cent, the group said.
Kingspan makes and sells insulated panels and boards, floors and bins. It has operations in Europe, the US, Canada and Australia.
