11th Jul 2023 10:32
(Alliance News) - Kingspan Group PLC's trading update was taken well on Tuesday, as analysts are now expecting higher full-year profit.
"In generally challenging construction end-markets, the strength of the Kingspan business is shining through. The group has upgraded profit guidance, which is a testament to the attractiveness of its products and an increasingly favourable sectoral exposure mix, said Davy Research analysts Flor O'Donoghue and Andrea Collins.
The Kingscourt, Ireland-based building materials company said that it is positioned to perform well in the medium term, as it expects profit for the first half of this year to modestly exceed that of the last.
Kingspan expects to report trading profit for the first half in the region of EUR435 million, up marginally from EUR434 million year-on-year and from previous guidance of just over EUR 400 million.
Based on this, Shore Capital's Graeme Kyle said the trading statement "should be taken well by the market."
Shares in Kingspan were trading 14% higher at EUR65.02 each in London on Tuesday morning.
The firm noted that market and category performances have varied widely, with the Americas overall outpacing European activity.
Certain applications performed particularly strongly, namely those in tech and automotive production, while demand for data applications also remained high.
Looking ahead, Kingspan said that it is still positioned favourably overall as it enters the third quarter, "although it is still early days".
Davy Research analysts O'Donoghue and Collins also noted that in Kingspan's call following the update, the company suggested that it can match the first-half performance in the second half of the year.
"Hence trading profit forecasts for the year should push up to circa EUR870 million. We are currently at EUR800 million, implying a near 9% upgrade to our existing estimate and a circa 10% increase to the latest Visible Alpha forecast of EUR791 million," O'Donoghue and Collins continued.
Shore Capital's Kyle also noted the implications on the full-year trading results. Kyle said that he currently forecasts full-year trading profit of EUR836 million, but expects to increase forecasts by about 4% to EUR869 million.
Kingspan added that the company was "positioned strongly overall for the medium term and beyond given the global focus on energy efficiency, our high-performance product suite, our distinctive Planet Passionate agenda and ever-growing diversity of our end markets."
By Sophie Rose, Alliance News reporter
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