Kingspan has released a strong set of FY 2013 results this morning that have come in ahead of our forecasts. Revenue for the 12 month period amounted to €1.79 billion (merrion: € 1.82 billion) while trading profit came in at €122.8 million (merrion €119.4 million), beating our forecasts by 2.8%. EBITDA for the year amounted to €162.9 million (merrion: €162.3 million).
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Overall, total revenue for Kingspan increased by 1% on an underlying basis and by 10% on a reported basis after taking in to account currency headwinds (-3%) and the benefit of acquisitions (+12%).On a divisional basis insulated panels sales increased by 23%, driven by the positive contribution of acquisitions (+24%). Insulation board sales saw a decline of 3% while Environmental sales fell by 12%. Access Floors reported underlying sales growth of 5%, offset by a 5% currency translation headwind.
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Kingspan continues to be highly cash generative and the company successfully brought net debt down by €57.9 million in 2013 to €107.6 million at year end (merrion €101.3 million) leaving net debt/EBITDA at a very healthy .66x (2012: 1.12x). Kingspan also achieved a very strong increase in ROCE of 160bps bringing the ratio to 12.3% (2012: 10.7%), closer to historical levels of well above 15% which we believe are achievable in the medium term.
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Overall, this is a very solid trading update from Kingspan and management have provided a relatively upbeat assessment of the environment so far in 2014 and for the remainder of the year, most notably helped by increased activity in the UK over the past six months. We will review our forecasts post this morning’s conference call with management with an upward bias and believe that Kingspan is well placed to make progress in 2014.
<p><h5>David Holohan</h5>
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