Mainland European markets are showing tentative signs of recovery with activity in Germany being particularly buoyant although order patterns in Eastern Europe remain somewhat erratic. The North American businesses recorded a good performance overall in a flat construction market driven in the main by penetration growth in insulated panels and good volumes in data centres for access floors offsetting the impact of a weaker office market. Australia recorded good sales growth in the period and Ireland, which represents 4% of group sales, was flat overall year on year.
Trading in the first four months of 2011 was well ahead of the same period last year, albeit in more favourable weather conditions, in the early part of the year. Group sales of €439.3m (£374m) were 33% ahead of last year’s sales in the same period. After adjusting for the impact of the acquisition of the European Insulation businesses of CRH, which was completed in the period, group sales were ahead of last year by 20% in the four month period. Of this 2% reflects the positive impact of currency translation, 6% was price with 12% reflecting volume growth. The group’s percentage operating margin overall was in line with the same period in 2010, reflecting the impact of raw material price increases. Net debt at the end of April was approximately €248.0m, an increase of €119.6m on the position at the end of 2010 due principally to the acquisition in the period. Interest cover remains in excess of 10 times.
A key feature of the first four months has been raw material increases and the recovery of these from the marketplace, said Kingspan. The near term expectation is for further raw material pricing pressure for the remainder of quarter two. For the second half, steel costs are likely to flatten, however, continued inflation on chemicals seems probable at this point, the company said. “Looking ahead, the second quarter’s pipeline would indicate the continuation of the delicate economic recovery, particularly in the UK and North America, whilst our businesses in Germany and Australia are expected to be strong through mid-year,” it said. “An element of the growth we have experienced in the year to date, as highlighted above, reflects adverse weather in the early part of 2010 and the comparison is likely to be more demanding as we go through the year. The momentum we have seen to date, together with the group’s solid order books, is likely to deliver an operating outcome for the first half of 2011 favourable to that of a year earlier.”
Got a story? Email news@theconstructionindex.co.uk
