Cavan, Republic of Ireland -- Insulation provider Kingspan Group plc said 13 May that there has been "a noticeable pick-up in activity levels," in the last six weeks, following a slow start to the year, largely as a result of poor weather.
"Overall sales revenues were relatively solid," down about 6 percent on the first four months of the prior year, said the group in an interim trading statement.
Kingspan feels the recent improvement in construction activity will continue for the coming months, but also said that the "pronounced weakness in January and February," should result in about a 10 percent decline in operating profit in the first half, with no significant change in the Group's net debt since year end.
The maker of polyurethane and phenolic foam insulation said UK market conditions have been stable, noting "some improvement in residential construction and a solid outcome in non-office related commercial building activity." But in Ireland, Kingspan said, conditions in the new-build market have weakened further.
Meanwhile, in mainland Europe, the year started slowly than in 2009, but improved recently, particularly in Germany. In North America low-rise non-residential has been solid for Kingspan, but office activity has weakened, the group said.
Kingspan said its global sales revenues for insulated panel sales were down 7 percent, noting that order intake has been strong. Volume intake was up 23 percent on the prior year in the UK, 16 percent in Western Europe, 21 percent in Central & Eastern Europe and 41 percent in North America. Overall its volume order book is about 15 percent higher than a year earlier, indicating an improved mid-year performance.
The Irish group noted, however, that "overcapacity continues to weaken pricing."
In insulation board, sales revenues were up 7 percent (down 3 percent excluding acquisition) to the end of April. Kingspan said this reflects "solid newbuild and refurbishment activity in the UK, continued growth in penetration of Kooltherm products across all markets, and an excellent performance at the recently acquired Australian business."
In Western Europe, which Kingspan said has, "clear long-term growth potential," sales grew 12 percent by value, but the group again noted that Ireland continues to deteriorate, with sales down 21 percent year on year, and margins under significant pressure.
The insulation manufacturer said that, "looking ahead, the sense of nervousness that prevailed in all of the group's markets a year ago, is less evident at present," and that, combined with encouraging order intake across Panels & Boards and further penetration in Western Europe and the US, "there is scope for a degree of measured optimism through 2010."