Cavan, Ireland -- Insulation supplier Kingspan Group says it had a solid performance in the first four months of 2012 in a subdued global construction market.
Total sales of Euro 473 million ($612.5 million) were 8 percent ahead of the prior year. Sales in mainland Europe were up 9 percent, in the UK up 2 percent and in North America up 10 percent, said the Irish group.
Kingspan said overall sales growth at constant exchange rates was 5 percent. Trading margin grew in the period as a consequence of business mix, the benefit of restructuring in 2011 and a recovery of the slight lag in raw material inflation experienced in quarter four of 2011.
According to the supplier of insulation boards, insulated panels and other construction materials, 2012 opened with "relatively more optimism" about construction activity in some markets. Sentiment is now weaker, Kingspan said, while the UK market is solid, with overall volumes flat.
Mainland Europe showed a mixed performance, with Holland difficult, resulting in year-on-year volume declines. "Germany, in contrast, is buoyant as a market and Kingspan's growth there is underpinned further by market penetration," the company pointed out, in an interim trading statement.
In North America, Kingspan's sales volume decreased but its order book has recovered steadily, the company commented.
Sales revenues in insulated panels increased by 5 percent, with overall order intake solid. By territory, intake levels were up 5 percent in the UK, down 2 percent in Western Europe, down 4 percent Central/Eastern Europe, down 10 percent in North America and up 10 percent in Australia. The order book at the end of April 2012 was 5 percent ahead of the position at the end of April 2011.
Insulation board sales were up 16 percent to the end of April, and Kingspan said this reflects price growth and a positive business mix associated with continuing market penetration by the Kooltherm brand.
Kingspan said it has seen some volume attrition in its PIR (polyisocyanurate) sales, as it focused on recovering raw material cost rises. It has also seen a decline in volume in Holland, due to lower residential activity. Margin has improved due to business mix and the benefits of restructuring last year.
In terms of prospects for the rest of 2012, Kingspan said the construction environment in its core markets remains "stable, albeit uncertain," with growth unlikely this year.
But the group said it continues to penetrate the market for high-performance insulation and building envelopes, noting that this is a "key lever for growth in our business," in the current environment.