Interim Results
Kingspan Group PLC
7 September 2000
Kingspan Group plc announces half year results to 30th June 2000:
FINANCIAL HIGHLIGHTS
- Turnover up 35% to Euro 325 million
- Profit before tax up 13% to Euro 31.4 million
- Profit after tax up 15% to Euro 24.3 million
- Basic earnings per share up 15% to 14.4 cents
- Basic earnings per share before goodwill ('adjusted EPS') up 17% to 15.6
cents
- Interim dividend up 45% to 1.35 cents
- Net debt as a percentage of shareholders' equity of 69% at 30th June 2000
(72% at 31st December 1999).
*****************************************************
Interim Statement
Results
The Directors of Kingspan Group are pleased to announce that profit before tax
for the six months to 30th June 2000 amounted to Euro 31.4 million compared to
Euro 27.7 million for the corresponding period of 1999, representing an
increase of 13% (15% before goodwill amortisation). Basic earnings per share
of 14.4 cents is up 15% compared to the same period last year (adjusted EPS up
17%).
In line with Financial Reporting Standard 10, goodwill arising on acquisitions
in the period of Euro 4.3 million has been capitalised; Euro 1.9 million has
been amortised against profits in the period.
Net debt amounted to Euro 110 million at 30th June 2000, representing net
gearing of 69%. This compares to net debt of Euro 101 million and net gearing
of 72% at 31st December 1999. Interest cover remains comfortable at 7.9
times.
It is proposed that an interim dividend of 1.35 cents will be paid on 23rd
October 2000 to shareholders on the register at close of business on 22nd
September 2000. This represents an increase of 45% on the 1999 interim
dividend.
Turnover in the period at Euro 325 million is up 35% over the corresponding
period last year. This includes the effect of acquisitions made in the
latter half of 1999 and in the first six months of 2000, which generated
turnover in the period of Euro 32 million. Turnover before these
acquisitions was up 28%. Sales of building component products, which includes
composite panels, were up 28% and sales of raised access floors were up 62%.
Gross margins increased from 30.2% in the second half of 1999 to 30.5% (first
half 1999: 31.2%). The operating margin, before the effects of goodwill
amortisation, was 11.6% in the current period compared to 12.2% in the second
half of 1999 (first half 1999: 13.2%). This reduction in operating margin was
not market driven but rather the result of indirect costs in bringing new
plant and products on-line to cope with sales volume increases and to ensure
adequate capacity for planned substantial future growth. Operating margins
have stabilised and are expected to improve during the second half of 2000 and
through 2001.
A series of major capital investment projects was undertaken which had
associated indirect costs. These include the installation of a new composite
panel line in the UK. Production on this line has commenced and volume will
be phased in during the second half of the year. A new line for the
production of rigid insulation boards is fully operational in the UK with a
further new line planned to come on stream in Ireland by year end. A new
raised access flooring line has been installed at Hewetson and will be in full
production by mid November. This will enable the integration of Durabella
production onto the Hewetson site in Hull. A new facility in Poland for the
production of environmental containers is almost complete and production will
commence by end of this month.
With regard to acquisitions, the integration of Durabella into Hewetson is now
substantially complete and the full financial benefits will accrue with the
commissioning of the new production line in Hull. There were four
acquisitions in the Environmental Containers product range completed in
November 1999 through to June 2000. These four acquisitions have
significantly increased the Group's capacity and market position in the
environmental container markets. Their integration and rationalisation is on
track. As stated in the 1999 full year review, these acquisitions are not
scheduled to contribute significantly until 2001.
The balance sheet remains strong. Net debt at Euro 110 million is 69% of
shareholders funds and interest is covered 7.9 times. Working capital at 15%
of sales remains constant. Capital investment in the period amounted to Euro
13.6 million and a further Euro 15 million will be invested to year end.
Acquisitions in the period amounted to Euro 13 million, funded from the
Group's resources. Banking facilities of Euro 248 million are in place, which
together with strong cash generation will fund the growth strategies of the
Group.
During the first six months of this year the Group has continued on its growth
strategy, which can be stated as follows:
- Develop and grow strong, high added value building products brands, which
are specified by architects and engineers
- Seek out significant market positions in growth markets and growth products
- Convert markets where feasible to Group products and technology
- Drive low cost production through scale and automation
- Provide service to customers in excess of expectations
- Acquire and integrate businesses to complement the existing product range
and/or geographic spread.
Good progress has continued in each of these areas during the period. In
particular the conversion of the cladding market to Kingspan-type composite
panels is in line with Group expectations.
Outlook
The Group has the right products and solutions and, most importantly, the
capacity to deliver these to a marketplace which is receptive and is in the
main in a buoyant mood. The investment in acquisitions, plant, people and in
product and market development, over the past two years in particular,
provides the platform for continued growth. Order levels are high and this
augurs well for a satisfactory performance to year end. The longer-term
objectives of the Group and the strategies to deliver on these are being
pursued relentlessly.
Further information, contact:
Eugene Murtagh
Chairman & Chief Executive
Robert Barr
Chief Operating Officer
Dermot Mulvihill
Group Finance Director
Tel.: +353 42 9698000
*****************************************************
GROUP PROFIT AND LOSS ACCOUNT
Continuing operations
Acquisitions Total
6 months 6 months 6 months 6 months Year
ended ended ended ended ended
30.6.00 30.6.00 30.6.00 30.6.99 31.12.99
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
Euro'000 Euro'000 Euro'000 Euro'000 Euro'000
Turnover 317,321 7,586 324,907 241,523 532,541
Cost of sales (220,363) (5,403) (225,766) (166,122) (369,188)
------- ------ ------- ------- -------
Gross profit 96,958 2,183 99,141 75,401 163,353
Distribution costs (17,296) (639) (17,935) (13,416) (29,196)
Administrative expenses(42,123) (1,248) (43,371) (30,188) (66,659)
Goodwill amortisation (1,948) 0 (1,948) (1,185) (2,494)
------- ------ ------- ------- -------
Group operating profit 35,591 296 35,887 30,612 65,004
======= ======
Interest payable and similar charges (5,084) (3,710) (7,498)
Interest receivable and other income 555 755 1,176
------- ------- -------
Profit on ordinary activities before taxation 31,358 27,657 58,682
Tax on profit on ordinary activities (7,095) (6,526) (12,875)
------- ------- -------
Profit on ordinary activities after taxation 24,263 21,131 45,807
Minority interest (64) (104) (152)
------- ------- -------
Profit attributable to ordinary shareholders 24,199 21,027 45,655
Ordinary dividends (2,270) (1,555) (4,198)
------- ------- -------
Profit retained for the period 21,929 19,472 41,457
======= ======= =======
Euro cents Euro cents Euro cents
Basic earnings per share 14.4 12.5 27.2
Diluted earnings per share 14.2 12.3 26.8
Basic earnings per share (before goodwill) 15.6 13.3 28.7
Dividend per share 1.35 0.93 2.50
*****************************************************
GROUP BALANCE SHEET
30.6.00 30.6.99 31.12.99
(Unaudited) (Unaudited) (Audited)
Euro'000 Euro'000 Euro'000
FIXED ASSETS
Tangible assets 119,197 95,592 107,387
Intangible assets 74,063 58,720 73,197
Financial assets 557 41 556
------- ------- -------
193,817 154,353 181,140
------- ------- -------
CURRENT ASSETS
Stocks 56,622 48,015 49,807
Trade and other debtors 174,690 132,534 136,386
Cash and term deposits 41,667 34,651 28,515
------- ------- -------
272,979 215,200 214,708
------- ------- -------
CREDITORS
(Amounts falling due within one year)
Trade and other creditors 132,195 111,924 104,983
Bank and other borrowings 72,616 47,284 54,856
Deferred consideration 0 818 2,520
Dividends 2,270 1,555 2,636
------- ------- -------
207,081 161,581 164,995
------- ------- -------
NET CURRENT ASSETS 65,898 53,619 49,713
------- ------- -------
TOTAL ASSETS LESS CURRENT LIABILITIES 259,715 207,972 230,853
------- ------- -------
CREDITORS
(Amounts falling due after more than one year)
Bank and other borrowings 70,480 69,690 61,909
Deferred consideration 8,945 1,524 9,860
------- ------- -------
79,425 71,214 71,769
------- ------- -------
PROVISIONS FOR LIABILITIES AND CHARGES 15,333 15,811 12,730
------- ------- -------
GOVERNMENT GRANTS 1,860 1,790 1,740
------- ------- -------
163,097 119,157 144,614
======= ======= =======
CAPITAL AND RESERVES
Called-up share capital 21,865 21,292 21,827
Share premium account 16,200 15,747 15,884
Revaluation reserve 891 891 891
Profit and loss account 116,837 73,431 94,908
Other reserves 3,957 144 5,991
------- ------- -------
Shareholders' funds 159,750 111,505 139,501
------- ------- -------
MINORITY INTERESTS
Including non-equity interests 3,347 7,652 5,113
------- ------- -------
163,097 119,157 144,614
======= ======= =======
*****************************************************
GROUP CASH FLOW STATEMENT
6 months 6 months Year
ended ended ended
30.6.00 30.6.99 31.12.99
(Unaudited) (Unaudited) (Audited)
Euro'000 Euro'000 Euro'000
Net cash inflow from operating activities 28,074 22,004 57,426
Returns on investments and
servicing of finance (4,083) (3,407) (6,509)
Taxation (4,956) (5,945) (18,170)
Capital expenditure and financial investment(13,557) (8,051) (17,499)
Acquisitions and disposals (16,406) (43,231) (55,716)
Equity dividends paid (2,636) (1,808) (3,370)
------ ------ ------
Cash outflow before use of liquid resources
and financing (13,564) (40,438) (43,838)
Management of liquid resources (10,991) (537) 3,390
Financing 25,782 (4,017) (12,703)
------ ------ ------
Increase/(decrease) in cash in the period 1,227 (44,992) (53,151)
====== ====== ======
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
6 months 6 months Year
ended ended ended
30.6.00 30.6.99 31.12.99
(Unaudited) (Unaudited) (Audited)
Euro'000 Euro'000 Euro'000
Increase/(decrease) in cash in the period 1,227 (44,992) (53,151)
Increase/(decrease) in liquid resources 10,991 537 (3,390)
Cash flow from movement in debt, lease
finance and deferred consideration (23,673) 2,927 10,628
------ ----- ------
Change in net debt resulting
from cash flows (11,455) (41,528) (45,913)
Change in net debt resulting
from acquisitions and translation 1,711 (7,706) (19,285)
------ ------ ------
Movement in net debt in the period (9,744) (49,234) (65,198)
Net debt at start of period (100,630) (35,432) (35,432)
------- ------ -------
Net debt at end of period (110,374) (84,666) (100,630)
======= ====== =======
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
6 months 6 months Year
ended ended ended
30.6.00 30.6.99 31.12.99
(Unaudited) (Unaudited) (Audited)
Euro'000 Euro'000 Euro'000
Profit for financial period
attributable to Group shareholders 24,199 21,027 45,655
Exchange adjustments (2,034) 2,723 8,571
------ ------ ------
Total gains and losses recognised
since last annual report 22,165 23,750 54,226
====== ====== ======
SUPPLEMENTARY INFORMATION
1 BASIS OF PREPARATION
The 2000 interim results and summarised balance sheet are presented in Euro.
Results and cash flows of subsidiary undertakings have been translated into
Euro at the average exchange rates for the period, and the related balance
sheets have been translated at the rates of exchange ruling at the balance
sheet date.
The interim financial information has been prepared in accordance with
applicable accounting and financial reporting standards and the accounting
policies used are consistent with those set out on pages 56 to 58 of the
Annual Report for the year ended 31st December 1999.
The interim results for the half year to 30th June 2000 and 30th June 1999
are unaudited. The comparative figures for the year ended 31st December 1999
represent an abbreviated version of the Group's full accounts for that year
which have been filed with the Registrar of Companies and on which the
auditors, Grant Thornton, have issued an unqualified audit report.
These interim results are available on the Group's website (www.kingspan.com).
A printed copy will be sent by post to all registered shareholders. Copies
may also be obtained from the Company's Registrars: Computershare Services
(Ireland) Limited, Heron House, Corrig Road, Sandyford Industrial Estate,
Dublin 18.
2 EARNINGS PER SHARE
6 months 6 months Year
ended ended ended
30.6.00 30.6.99 31.12.99
(Unaudited) (Unaudited) (Audited)
Euro'000 Euro'000 Euro'000
Profit attributable to
ordinary shareholders 24,199 21,027 45,655
======= ======= =======
Number of Number of Number of
shares ('000) shares ('000) shares ('000)
Weighted average number of ordinary
shares for the calculation of
basic earnings per share 168,022 167,592 167,706
======= ======= =======
Dilutive effect of share options 2,758 2,693 2,630
======= ======= =======
Weighted average number of ordinary
shares for the calculation
of diluted earnings per share 170,780 170,285 170,336
======= ======= =======
Euro cents Euro cents Euro cents
Basic earnings per share 14.4 12.5 27.2
======= ======= =======
Diluted earnings per share 14.2 12.3 26.8
======= ======= =======
3 DIVIDEND
An interim dividend at the rate of 1.35 cents per ordinary share (1999: 0.93
cents) is payable on 23rd October 2000 to shareholders on the register at the
close of business on 22nd September 2000.
4 TURNOVER 6 months 6 months Year
ended ended ended
30.6.00 30.6.99 31.12.99
(Unaudited) (Unaudited) (Audited)
Euro'000 Euro'000 Euro'000
The analysis by class of activity
is as follows:
Building components 173,410 135,462 304,555
Raised access floors 55,000 27,116 69,692
Insulation products 43,901 36,499 72,662
Environmental containers 52,596 28,027 60,853
Discontinued activities 0 14,419 24,779
------- ------- -------
324,907 241,523 532,541
======= ======= =======
The analysis by geographical area is as follows:
Republic of Ireland 45,902 37,531 80,174
Britain and Northern Ireland 231,429 164,095 357,689
Mainland Europe 37,549 31,654 79,726
Other 10,027 8,243 14,952
------- ------- -------
324,907 241,523 532,541
======= ======= =======
5 RECONCILIATION OF MOVEMENTS IN
SHAREHOLDERS' FUNDS 6 months 6 months Year
ended ended ended
30.6.00 30.6.99 31.12.99
(Unaudited) (Unaudited) (Audited)
Euro'000 Euro'000 Euro'000
Profit for the financial period
attributable to Group shareholders 24,199 21,027 45,655
Dividends (2,270) (1,555) (4,198)
------- ------- -------
21,929 19,472 41,457
Other recognised gains and losses
for the period (2,034) 2,723 8,571
New share capital subscribed 354 22 185
------- ------- -------
Net addition to shareholders' funds 20,249 22,217 50,213
Opening shareholders' funds 139,501 89,288 89,288
------- ------- -------
Closing shareholders' funds 159,750 111,505 139,501
======= ======= =======
6 RECONCILIATION OF OPERATING PROFIT
TO NET CASH FLOW FROM OPERATING
ACTIVITIES 6 months 6 months Year
ended ended ended
30.6.00 30.6.99 31.12.99
(Unaudited) (Unaudited) (Audited)
Euro'000 Euro'000 Euro'000
Operating profit 35,887 30,612 65,004
Depreciation charges 6,830 6,033 13,477
Amortisation of intangible assets 2,205 1,435 2,989
(Profit)/loss on sale of tangible assets (14) (11) 56
Government grants amortised (89) (173) (235)
(Increase)/decrease in stocks (5,555) (5,096) (3,932)
(Increase)/decrease in debtors (38,527) (23,812) (31,427)
Increase/(decrease)in creditors 27,337 13,016 11,494
------- ------- -------
Net cash flow from operating activities 28,074 22,004 57,426
======= ======= =======
7 INTANGIBLE ASSETS
30.6.00 30.6.99 31.12.99
(Unaudited) (Unaudited) (Audited)
Euro'000 Euro'000 Euro'000
Goodwill
At start of period 68,798 8,925 8,925
On acquisitions 4,276 44,130 61,291
On disposals 0 0 (4,798)
Translation adjustment (1,195) 2,757 5,875
Amortised in period (1,948) (1,185) (2,494)
------- ------- -------
At end of period 69,931 54,627 68,799
======= ======= =======
Patents
At start of period 4,398 4,342 4,342
On acquisitions 0 0 551
On disposals 0 0 0
Translation adjustment (9) 1 0
Amortised in period (257) (250) (495)
------- ------- -------
At end of period 4,132 4,093 4,398
======= ======= =======
Total intangible assets
At start of period 73,196 13,267 13,267
On acquisitions 4,276 44,130 61,842
On disposals 0 0 (4,798)
Translation adjustment (1,204) 2,758 5,875
Amortised in period (2,205) (1,435) (2,989)
------- ------- -------
At end of period 74,063 58,720 73,197
======= ======= =======
*****************************************************
Independent Review Report to Kingspan Group plc
Introduction
We have been instructed by the company to review the financial information set
out on pages 4-9 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing
Rules of the Irish Stock Exchange require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes,
and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board. A review consists principally
of making enquiries of group and local management and applying analytical
procedures to the financial information and underlying financial data and
based thereon, assessing whether the accounting policies and presentation have
been consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities
and transactions. It is substantially less in scope than an audit performed
in accordance with Auditing Standards and therefore provides a lower level of
assurance than an audit. Accordingly we do not express and audit opinion on
the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30th June 2000.
Grant Thornton
Chartered Accountants
Ashford House
Tara Street
Dublin 2
Date: 7th September 2000
Friday, 22nd November 2024
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