Reporting its annual results, the Irish company said that its UK sales were up 3% in the UK although sales of insulated panels fell 1% in 2010 “against a less than positive backdrop and a weak banking environment”.
Order intake for the year as a whole was up 6% in the UK, but was down 6% year on year in the fourth quarter because of December’s snow. The order book for the UK ended the year up 14% and the project pipeline grew by approximately 25% from January to June, remaining broadly stable since mid-year.
“As 2011 progresses public capital spending particularly in the health and education sectors is expected to decline. All in all, we expect limited growth in the UK in 2011,” chief executive Gene Murtagh said of the panels business.
The insulation business in the UK remained stable with flat sales. Refurbishment activity was strong, sales in new housing grew slightly, but the commercial market weakened.
Kingspan is forecasting the commercial market to bottom out in 2011 but sales in the education and healthcare sectors - important contributors in 2010 - are expected to decline during 2011 and for the foreseeable future.
Mr Murtagh said: “ We believe that the 2010 trends will continue into 2011, with an increase in upgrading activity in both domestic and non-domestic, aided by the forthcoming ‘Green Deal’ in the UK. Commercial construction activity is not expected to return to growth before 2012.”
Globally, Kingspan reported group sales up 6% to €1,193.2m – its first increase for three years. Pre-tax profits fell 2% to €55.7m although operating profits rose 8% to €67.4m.
Mr Murtagh summarised: "The return of stability was a key theme in 2010 with Kingspan recording an increase in both sales and [operating] profits for the first time in three years. The group has emerged from this period, albeit at a lower base, with a business that is broader and deeper than ever before.
“A combination of a strong balance sheet, recent acquisitions and new products provides a platform for Kingspan to drive further convergence to more efficient building solutions across an increasing global footprint."
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