Kingspan Group PLC (LSE:KGP) shares jumped in Friday's trading following record revenues and an acquisiton of Ondura, against a backdrop of rapid inflation.
Revenues for Kingspan increased by 42% in 2021 to €6.5bn, bolstered by strong growth in the company’s cornerstone insulation markets and acquisitions.
Profit after tax rose by 48% to €571mln, while its trading margin increased 0.5 percentage points (ppts) to 11.6%.
Earnings per share were €3.06, as the group battled price inflation in its raw materials to return a profit.
“Whilst dramatic input price inflation was a major feature, our cost recovery efforts helped ensure continued margin improvement”, Gene Murtagh, Kinspan’s chief executive officer, said in a statement.
“Despite a slower fourth quarter, with a large order backlog we are cautiously optimistic about the outlook for this year, whilst mindful of the high bar in comparison with last year's performance.
The company spent €800mln on the acquisitions of Logstar, Colt Group and Skydome, which contributed 12% to sales growth and 11% to trading profit last year.
While cautiously optimistic against sustained price rises, Murtagh said a growing desire for conservation was driving up demand for the company’s insulation arm, as it announced its own reductions in energy intensity as part of a 10-year ‘Planet Passionate’ project.
“High energy costs and supply threats around the world are a catalyst for a focus on conservation measures, which is likely to accelerate the demand for lower energy solutions which we believe will be supportive of demand for our products."
The company also announced a further transaction through the completion of its acquisition of Ondura, a global provider of roofing membranes, for €550mln.
Kingspan expects the acquisition of Ondura to increase group earnings before interest, taxation, depreciation and amortisation by 7% per year.
Following a jump in early trading, Kingspan’s share price was up 0.79% on close yesterday by mid-morning, at €92.32.