Kingspan looks ahead with confience despite slowing sales growth

Kingspan Group, which provides low energy building solutions, saw its shares dip after admitting that the pace of sales growth decreased 0.7 per cent in the third quarter compared to the same period in 2011.

The drop was the result of a relatively subdued sentiment in the company's end markets, a situation which the company admits has worsened.

Desite this, revenues in the nine months ended September 30th rose 1.6% to €1.16bn.

Going forward, the company has warned that the there is a deepening lack of confidence in Europe.

Divisionally, the company's insulated panels business saw a 3.0% increase in revenue for the first nine months of the year compared to the same period in 2011, although on a constant currency basis these measures were -1% and -3% respectively. In the UK and Western Europe year-to-date order intake is flat, but decreased by 7% in the third quarter.

Order intake in Central and Eastern Europe was ahead of last year in the period up to 30 September by 4% and also by 4% in the third quarter. In North America the business suffered from relatively subdued sales, with sales levels behind the year-to-date by 2%, although 15% ahead on the third quarter.

The insulation boards business experienced a 3% increase in revenue in the nine month period compared to the same period the previous year. On a constant currency basis these measures were 0% and -3% respectively. Divisional revenues continued to benefit from a strong Kooltherm business mix across all markets as seen earlier in the year, the group said, adding that the UK market was solid overall with some volume weakness evident. It did however say that the market in the Netherlands remains persistently weak with little evidence of any near term recovery.

The company believes that it will generate a trading profited of around €105m, up 10% year on year, and in line with consensus.

In a statement the group said: "Australian construction markets are evidently slowing although Kingspan's sales continue to grow reflecting improving levels of market penetration. Overall, general building activity across a number of the group's markets has been easing, with some pockets of relative buoyancy including Central and Eastern Europe, most notably Germany.

"While it is clearly difficult to fully counter persistent economic and construction weaknesses, which have the potential to become more pronounced in early 2013, the structural and global dimensions to Kingspan's business should go some way to offsetting this, as it has done in the past. Growing market penetration, a strong R&D pipeline, resilient refurbishment activity and driving the returns from recent acquisitions should all combine to move Kingspan forward."

NR