Interim Management Statement (0135D)
May 10 2012 - 2:00AM
UK Regulatory
TIDMKGP
RNS Number : 0135D
Kingspan Group PLC
10 May 2012
Interim Management Statement
10(th) May 2012
Kingspan Group plc, the leading international provider of low
energy building solutions, is issuing this Interim Management
Statement in advance of its Annual General Meeting which is being
held today at 11.00 in Dublin.
BUSINESS PERFORMANCE
The Group has recorded a solid performance in the first four
months of 2012 in a subdued global construction market environment.
Total Group sales of EUR473m were 8% ahead of prior year, of which
Mainland Europe was up 9%, UK up 2% and North America up 10%.
Overall sales growth at constant exchange rates was 5%. Trading
margin grew in the period as a consequence of business mix, the
benefit of restructuring initiatives undertaken in 2011 and a
recovery of the slight lag in raw material inflation experienced in
quarter four of 2011.
OUR MARKETS
In general, the year opened with relatively more optimism
regarding potential activity levels in some construction markets.
This dissipated somewhat as we progressed through the first quarter
with sentiment weaker now than at the beginning of the year. The UK
market is solid generally, with overall volumes flat, reflecting
the wide range of end uses for our products. We recorded
contrasting performances in Mainland European markets. The market
in Holland has been difficult, resulting in year on year volume
declines in our business. Germany, in contrast, is buoyant as a
market and Kingspan's growth there is underpinned further by market
penetration. Our North American business recorded volume decreases
in the period in line with the order book at last year end with the
order book recovering steadily through the period. Australia, as an
economy, is slowing but our business is progressing well, again
owing to penetration growth of Kingspan products in both commercial
and residential applications.
DIVISIONAL REVIEWS
Insulated Panels sales revenues increased by 5% in the first
four months versus the same period last year. Overall order intake
was solid in the period, decreasing by 2% against very strong
comparators a year earlier. By territory intake levels in the UK
were ahead by 5%, Western Europe decreased by 2%, Central and
Eastern Europe was down by 4%, North America decreased by 10% and
Australia increased by 10%. The order book at the end of April 2012
was 5% ahead of the position at the end of April 2011.
Insulation Boardssales were up 16% to the end of April
reflecting price growth and a positive business mix associated with
the continuing growth in market penetration of Kooltherm(R). This
performance also includes an element of acquired turnover and
therefore is likely to moderate significantly over the remainder of
the year. There has been some volume attrition in PIR as the
business focused on recovering raw material cost inflation as well
as a market-wide decline in volume in Holland due to lower
residential activity. Margin has improved due to business mix and
the benefits of restructuring activity undertaken last year.
Environmental sales were modestly behind last year for the first
four months. Sales of fuel storage products in the UK have been
weak with lower public sector housing activity a key factor.
Mainland Europe has had a good start although sales overall are in
line with last year due to a contract in France coming to an end,
as previously highlighted. On 1 May judgement was issued in respect
of the Borealis case in which Kingspan was plaintiff and,
disappointingly, our claim was unsuccessful. The 2011 financial
statements made adequate provision for this outcome and, as such,
there is no expected impact on current year or future earnings as a
consequence of the judgement.
Access Floors sales revenues were down slightly on last year
before the impact of the Tasman acquisition in Australia. US office
construction activity remains weak which has been tempered somewhat
by some improvement in the UK and solid datacentre activity
globally. Quotation activity is up year on year which should
deliver sales growth in 2013.
FINANCIAL POSITION
Net debt at the end of April was approximately EUR185m, an
increase of EUR14.5m on last year end, reflecting higher levels of
working capital due to seasonal factors and the acquisition of
Tasman Floors in Australia in January.
On the 27th April the Group successfully completed a EUR300m
refinancing of its syndicated bank debt with a stronger
international dimension than the outgoing syndicate. The new
facility, which is currently undrawn, comprises seven international
and one domestic bank and matures in April 2017. This, when
combined with the Group's US private placement facilities, brings
the average maturity of the Group's debt facilities to 5.4
years.
BOARD CHANGES
The Board wishes to thank Danny Kitchen who retires today as a
non-executive director. We are very grateful to Danny for his
advice and insight during his time as a director.
OUTLOOK
The construction environment in our core markets remains stable,
albeit uncertain, and it is unlikely, that growth will occur in
these markets this year. Market penetration for high performance
insulation and building envelopes continues to build and is a key
lever for growth in our business in this environment. Additionally,
Kingspan's focus on research and development and proprietary
technology coupled with geographic expansion should support the
further development of the Group. Our performance in the year to
date, together with a solid order book, is likely to deliver single
digit sales growth in the first half combined with a steady
improvement in overall trading margin.
Kingspan will issue its half year financial report for the
period ended 30 June 2012 on Monday 20 August 2012.
For further information contact:
Gene Murtagh, Chief Executive Officer Tel: +353 (0) 42 9698000
Geoff Doherty, Chief Financial Officer Tel: +353 (0) 42 9698000
Ed Micheau, Murray Consultants Tel: +353 (0) 1 4980300
This information is provided by RNS
The company news service from the London Stock Exchange
END
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