8th Nov 2021 10:34
(Alliance News) - Kingspan Group PLC on Monday said it has experienced unusual trading patterns so far in 2021 as customers order earlier than usual to get ahead of inflation and availability pressures.
The Kingscourt, Ireland-based building materials firm said it expects trading profit for 2021 to be in the region of EUR750 million. This is around 48% higher than last year's EUR508.2 million.
The company reported sales of EUR4.27 billion in the nine months to end September, rising 44% from EUR3.27 billion in the same period last year. In the third quarter, sales were up 50% year-on-year.
Segmentally, Light & Air sales lagged in the third quarter compared to the other sections, but were still up 12% on the year prior.
The solid nine-month performance was driven by the Insulated Panels and Insulation boards divisions, with sales rising 37% and 51% year-on-year, respectively.
"The sales performance across each of the group's key markets has evidently been strong both year to date and in the quarter. Raw material inflation has been extraordinary, with the associated recovery and the top line boosted further by buoyant volume growth overall year to date," Kingspan said.
Less positively, order intake slipped in August and September.
"Looking ahead our backlog is strong although is reducing week on week as sales activity outpaces new order placement. Underlying panels order intake volume is down 10% in the third quarter versus the same period in 2020," the firm noted.
Kingspan said that 2021 has been unusual and characterised by order placement earlier in the year than is typical, as customers seek to get ahead of ongoing inflation and availability pressures.
"It is likely what we are experiencing now is a fallow period in order placement following that. Raw material prices have been somewhat stable in more recent weeks, albeit at record high levels and following a period of unparalleled increases. There are no signs yet of any meaningful raw materials deflation although should that come the impact would be negative," Kingspan said.
The stock was down 0.8% to EUR101.05 each in London on Monday morning.
By Greg Roxburgh; [email protected]
Copyright 2021 Alliance News Limited. All Rights Reserved.
Related Shares:
KGP.L