Interim Results
Kingspan Group PLC
03 September 2007
Kingspan Group plc
2007 INTERIM RESULTS
Six months ended 30th June 2007
H1-2007 H1-2006 % change
€'mn €'mn
Sales 908.4 675.9 +34.4%
EBITDA 136.2 108.1 +26.0%
Operating Profit 114.2 88.0 +29.8%
Operating Margin % 12.5% 13.0% -50bp
Profit before tax 108.2 83.4 +29.7%
€'cent €'cent
Earnings per share 52.7 40.4 +30.4%
Dividend per share 8.00 6.00 +33%
• Strong momentum maintained in the first six months with sales up 34.4% and
earnings per share up 30.4%.
• Insulated Panel and Insulation Board businesses delivered another period of
significant growth in the UK through relentless conversion from traditional
underperforming systems.
• Growth in Insulated Panel sales in Central and Eastern Europe of 82%.
• North American Panel operations strengthened by the acquisition of Coldmatic
business in Canada, now re-branded Kingspan.
• Total investment in the period of €102.9m comprising capital expenditure of
€73.4m to support organic expansion, and €29.5m of acquisitions.
• Consolidated position in the growing UK Offsite market with the acquisition
of Potton and Pace around the turn of the year.
• Entry into the emerging high growth Solar Thermal market.
Gene Murtagh, Chief Executive Officer, commented:
'Overall, with earnings growth in excess of 30%, the first half of 2007
represented an excellent outturn for Kingspan. This pattern of growth was
underpinned by a product and geographic blend that will continue to deliver a
superior performance for the Group in markets that are becoming increasingly
alerted to the significance of high performance building solutions in reducing
direct energy consumption and carbon emissions generally.'
For further information contact:
James Dunny: Murray Consultants Tel: +353 (01) 4980 300
Tim Thompson/Jeremy Garcia: Buchanan Communications Tel: +(44) 207 466 5000
INTERIM RESULTS STATEMENT
Six months ended 30th June 2007
Kingspan Group plc announces half year results to 30th June 2007.
Summary results
• Turnover up 34.4% to €908.4 million (H1 2006: €675.9 million).
• Operating Profit up 29.8% to €114.2 million (H1 2006: €88.0 million).
• Basic earnings per share up 30.4% to 52.7 cent (H1 2006: 40.4 cent).
• Interim Dividend up 33% to 8 cent per share (H1 2006: 6 cent).
• Net debt, at €246.7 million, 39.7% of shareholder funds (32.6% at 30th June
2006).
• Interest cover (based on EBITDA) was 22.7 times (H1 2006: 23.5 times).
• Total investment in the period of €102.9m comprising capital expenditure of
€73.4m to support organic expansion, and €29.5m of acquisitions.
Insulated Panels & Boards
Total sales in this business represented 55% of Group Sales.
Insulated Panels
Turnover in this business reached €365.2m in the period, representing 40% of
Group turnover and an increase of 47% over H1 2006.
In Ireland the retail, logistics and smaller indigenous industries have proved
resilient in the first half of 2007, and combined they contributed to growth of
almost 30% in the Panel business.
Low-rise non-residential construction in the UK is marginally up on 2006, yet
Kingspan's Panel business has delivered another year of significant growth
through its relentless conversion of material choice away from traditional
underperforming built-up systems. Revenue was up in the region well in excess
of 20%. This advance has been supported by the increasing use of panel
solutions in lesser converted applications including tiled roofing, aluminium
standing seam and modern facade specifications. Capacity will be increased from
2008 to reflect the broadening market opportunity, particularly around wall
products. Meanwhile, generally improved conditions in the Benelux markets have
been beneficial and our Belgium based Door Panel business has continued to grow
its share of that sector. Australia and New Zealand delivered strong year on
year growth, and the local manufacturing facility will begin deliveries of wall
product from Quarter 1, 2008, complimenting the existing roof and cold storage
range.
The overall construction market in the emerging economies in Central & Eastern
Europe continues on a strong growth trajectory and Kingspan's business in the
region is up by 82%. This growth reflects the Group's acquisition in Turkey in
2006, excluding which, the underlying growth rate was approximately 40% in what
was an unseasonably strong start to the year. Indications are very positive
overall and capacity is being doubled in the Czech Republic where a new plant is
expected to be commissioned in Quarter 3, 2008. In Turkey the Group has just
completed a second plant, this time in the southern region, which recently
commenced production.
As yet, Kingspan's Panel business is in its development phase in North America.
The Group's initial focus is on the Canadian market where sales in the first
half were on target reflecting mild comparable growth over 2006. Kingspan plans
to exploit the specification market, which is becoming increasingly open to
faster methods of construction that deliver clear economic and environmental
benefits. The Group expects to invest in the relocation of its Toronto facility
during 2008 to a site more appropriate for the long term development of the
business.
Insulation Boards
Turnover in this business reached €140.0m in the period, representing 15% of
Group turnover and an increase of 18% over H1 2006.
In the UK the Group's Insulation business has shown growth in excess of 10% over
the same period last year. The new codes, which became law in April 2006, are
beginning to have an impact on penetration rates, and also on the average
thickness of materials. Growth in the phenolic product has been progressing as
planned, and additional capacity has been put in place to support the Group's
drive behind this growing segment. This investment is currently going through
its commissioning phase in Ireland.
The performance of the business in Ireland has been very robust despite the
clear slowdown in residential construction, which is expected to continue into
the second half. Average thickness improvements, strong commercial
construction, a strong one-off housing sector and the strength of Northern
Ireland's commercial and housing sectors have all contributed to a steady
outcome in the first six months.
In Continental Europe, Benelux and Germany sales have shown an accelerated
pattern of growth led by greater acceptance of the phenolic product and a
general improvement in conditions in the region. A new phenolic plant will be
constructed in the Netherlands during 2008, to commence production in 2009. A
similar sized facility, this time in PIR foam, will also be constructed in
Poland during 2008. This will be the Group's first rigid board facility in
Central Europe, where Kingspan sees strong potential for its insulation
offering.
Environmental & Renewables
Turnover in this division reached €141.6m during the period, an increase of 18%
over 2006, and representing 16% of Group turnover.
The period marked one of mixed performance in this division, which with its
diverse range of environmental and water solutions, experienced some downs as
well as ups, resulting in slightly compressed margins overall.
On Mainland Europe, in the Polish based business, there was strong growth once
again in both sales and margins. This was largely the result of continued
geographic expansion, particularly in Scandinavia.
Fuel storage products in the UK & Ireland experienced a more challenging time as
an overall decline in these markets delivered a reduction in unit sales of
around 5%. This pattern will be alleviated over the medium term by a shift
towards higher value double skin containment solutions. As referred to in the
2006 Preliminary Results Statement, product warranty claims relating to faulty
raw material supplied a number of years ago continued during the period and this
continued to negatively affect margins. The Group expects to recover these
costs from the supplier of the raw material.
Effluent Treatment had a steady six months in both the UK & Ireland and a new
greenfield facility in Northern Ireland is nearing completion. This plant will
supply the all-Ireland market and will deliver savings in the near term.
Hot water storage, a growing segment for Kingspan, provided another period of
growth as conversion towards pressurised systems in the UK continued. During
the period the Group has added a range of solar water systems to its offering
which, given the rapidly increasing move towards renewable energy sources, will
continue to support growth in this segment.
In all, margins were compressed in the Division but firm operational plans are
in place to increase returns in this area over the medium term.
Offsite & Structural
Turnover in this division reached €169.3m during the period, an increase of 48%
over H1 2006, and representing 19% of Group turnover.
Structural products, typically used as secondary steel members in low-rise
non-residential construction, experienced slight increases in the UK and was
particularly strong in Ireland where the non-residential sector continued to be
buoyant.
During the first six months of 2007, Ireland's residential construction sector
began to experience a slight reduction in output. This trend is likely to
deteriorate somewhat in the second half of the year. Kingspan's Offsite
revenues in Ireland, representing around 3% of Group sales, were broadly flat
but are expected to slow in the second half. This moderation has coincided with
significant increases in timber costs, which combined with the reduction in
output, contributed to margin compression. It is clear, however, that future
mandatory thermal performance standards in Ireland will require a minimum 40%
improvement on those of today. Much of the Group's recent R&D emphasis has
focussed on designing products that will meet that need, and ultimately increase
the penetration of modern methods in Ireland.
This dynamic shift in future requirements will be particularly evident in the
UK, where plans to move towards compulsory Zero Carbon new build construction
in the residential sector were unveiled by the Government during the period.
With the recent acquisitions of Pace and Potton, Kingspan has taken steps to
consolidate its position in advance of this trend.
In the short term, the Group expects margins to be lower than previously, as it
continues to restructure the recently acquired businesses.
Access Floors
Turnover in this division reached €92.3m in the period, an increase of 25% over
the same period in the prior year, and represented 10% of Group turnover.
Office construction activity in the UK has continued the pattern of resumed
growth that it has demonstrated for the last couple of years. Vacancy rates in
London, a key indicator for medium and high rise development, is now in the
region of 5%. This is clearly visible in current trading at the Group's Access
Floors business and in the level of quotation activity for future projects.
In North America Kingspan has experienced a significant upturn in Access Floors
activity in the first six months of the year. This growth has been driven by a
resilient office construction market, a buoyant data centre market, and an
element of continued penetration growth by Access Flooring systems across the
continent. The manufacturing performance of the business is exceptionally lean,
and has been a sizeable contributor to the rise in operating margin in North
America. As in Europe, quotation and order intake activity have both been
strong and the Group's multi-branding approach to the market is proving a robust
formula. This will be further enhanced by the recent bolt-on acquisition of ASP
Maxcess in Ontario, Canada.
FINANCIAL REVIEW
Turnover and Operating Margins
Group turnover increased by 34.4% compared with the corresponding period last
year. The organic underlying growth, when the impact of acquisitions made in
2006 and 2007 are excluded was 19.0%.
The gross margin at 31.0% compares with 32.2% in the first half of 2006 and
30.4% in the second half. This reflects some changes in product mix and the
dilution effect of acquisitions as these are being bedded in from a
manufacturing and operations viewpoint. Distribution costs as a percentage of
sales came down from 5.4% to 4.9% year on year, and administration costs came
down from 13.8% to 13.5% reflecting the benefits of operational leverage.
The operating margin at 12.5% compares with 13.0% in the same period last year
and 13.3% for the full year 2006.
Sales by geographical market (H1-2007 versus H1-2006)
HI 2006 HI 2007 % change in 2007
Ireland 126.0 145.0 +15%
Britain and Northern Ireland 394.0 517.0 +31%
Mainland Europe 112.0 163.0 +45%
North America 36.0 66.0 +83%
Sales by product group (H1-2007 versus H1-2006)
H1 2006 H1 2007 % change in 2007
Insulated Panel 248.5 365.2 +47%
Insulated Board 119.2 140.0 +18%
Offsite and Structural 114.6 169.3 +48%
Environmental and Renewables 119.9 141.6 +18%
Access Floors 73.7 92.3 +25%
Cash Flow
The table below summarises the Group's funds flow for H1-2007, H1-2006 and FY06
H1-2007 H1-2006 FY06
€'mn €'mn €'mn
Inflows
Operating Profit 114.2 88.0 194.0
Depreciation 19.5 18.9 39.3
Amortisation 2.5 1.3 2.7
Pension contributions (1.5) (1.8) (4.6)
Working Capital increase (63.5) (32.4) (48.5)
Interest paid (5.5) (4.3) (8.4)
Taxation paid (9.8) (7.7) (25.5)
Others 9.4 3.1 17.7
Free cash flow 65.3 65.1 166.7
Acquisitions (29.5) (11.2) (107.3)
Net Capital Expenditure (73.4) (24.9) (57.7)
Dividends paid (20.8) (15.0) (25.1)
Cash Flow movement (58.4) 14.0 (23.4)
Debt translation (.7) (0.8) (0.7)
Decrease / (Increase) in net debt (59.1) 13.2 (24.1)
Net debt at start of period (187.6) (163.5) (163.5)
Net debt at end of period (246.7) (150.3) (187.6)
Working capital, expressed in terms of days sales, increased by 4 days compared
to 30th June 2006 (30th June 2007: 40 days; 30th June 2006: 36 days), this
equates to approximately €20m and is mainly carried in stock of raw material in
support of the increased levels of activity, particularly in panels referred to
above.
These cashflows were used to fund net capital expenditure of €73.4m, and
acquisition investment in five businesses of €29.5m.
These movements resulted in net debt at the end of June 2007 of €246.7m, which
represents an increase of €59.1m from the €187.6m reported for the end of
December 2006. This represents gearing of 39.7% (30th June 2006: 32.6%) and
compares to current banking facilities in place of over €500m.
BOARD CHANGES
As planned, after 35 years in the Group, Mr Brendan Murtagh will retire from his
executive role as Head of Corporate Development on the 31st December 2007. He
has agreed to remain as a non-executive director on the Board. The Chairman, on
behalf of the Board, extends his sincere gratitude to Brendan for his tremendous
contribution to the development of the Group both as a director and in his
various executive roles.
As previously announced during the period, Mr Kevin O'Connell retired from the
Board following this year's AGM, and we were pleased to welcome to the Board Ms
Helen Kirkpatrick and Mr Louis Eperjesi as an additional non-executive and
executive director respectively.
OUTLOOK
Among the key indicators of future performance in the Group are both order
intake and quotations. In the Group's larger businesses, these levels of
activity have been greater than ever experienced in Kingspan before. Insulated
Panels and Access Floors have both entered the second half of 2007 with robust
order banks, while Insulation Boards is also expected to have a strong end to
the year. When combined with an anticipated steady outcome for both the Offsite
& Structural and the Environmental & Renewables Divisions, the Group is
confident that the operating outcome for the year as a whole will exceed last
year's performance of €194m by at least 20%.
GROUP INCOME STATEMENT
for the period ended 30th June 2007
Notes Continuing
Operations Acquisitions
6 months 6 months 6 months 6 months Year
ended ended ended ended ended
30.6.07 30.6.07 30.6.07 30.6.06 31.12.06
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
€ '000 € '000 € '000 € '000 € '000
Revenue 3 897,608 10,769 908,377 675,874 1,461,170
Costs of sales (618,138) (8,708) (626,846) (458,434) (1,004,613)
Gross profit 279,470 2,061 281,531 217,440 456,557
Operating costs (164,686) (2,649) (167,335) (129,426) (262,512)
Operating result 114,784 (588) 114,196 88,014 194,045
Finance costs (6,781) (6,048) (11,620)
Finance income 769 1,447 2,775
Result for the period before tax 108,184 83,413 185,200
Income tax expense (18,505) (15,424) (33,520)
Net result for the period 89,679 67,989 151,680
Profit attributable to:
Shareholders of Kingspan Group plc 89,171 67,979 151,032
Minority Interest 508 10 648
Attributable to shareholders of Kingspan Group plc 89,679 67,989 151,680
Earnings per share for the period 5
Basic 52.7 40.4 89.8
Diluted 51.4 39.4 87.8
GROUP BALANCE SHEET
as at 30th June 2007
6 months 6 months Year
ended ended ended
Notes 30.6.07 30.6.06 31.12.06
(Unaudited) (Unaudited) (Audited)
€ '000 € '000 € '000
Assets
Non-current assets
Goodwill 6 302,017 220,800 287,580
Other intangible assets 7 16,116 10,949 17,117
Property, plant and 359,165 258,589 294,875
equipment
Financial assets 208 774 227
Deferred tax assets 2,694 2,263 2,694
680,200 493,375 602,493
Current assets
Inventories 161,416 106,403 130,868
Trade and other 431,820 319,807 357,966
receivables
Cash and cash 40,934 105,819 69,060
equivalents 634,170 532,029 557,894
Total assets 1,314,370 1,025,404 1,160,387
Liabilities
Current liabilities
Trade and other 295,248 223,809 259,112
liabilities
Provisions for liabilities and 47,222 30,699 42,554
charges
Deferred consideration 7,266 6,633 5,659
Financial liabilities 73,622 31,975 34,631
Current tax liabilities 35,080 23,902 26,130
458,438 317,018 368,086
Non-current liabilities
Pension and other employee 19,784 26,656 20,958
obligations
Financial liabilities 196,567 216,758 205,979
Deferred tax 8,372 3,951 8,212
liabilities
Deferred consideration 10,161 731 10,355
234,884 248,096 245,504
Total liabilities 693,322 565,114 613,590
NET ASSETS 621,048 460,290 546,797
Equity
Equity attributable to shareholders of Kingspan
Group plc
Called-up share capital 22,285 22,073 22,161
Additional paid-in 29,144 23,882 26,341
share capital
Other reserves (23,715) (34,690) (25,601)
Revaluation reserve 713 713 713
Capital redemption 513 513 513
reserve
Retained earnings 588,253 446,862 519,390
617,193 459,353 543,517
Minority interest 3,855 937 3,280
TOTAL EQUITY 621,048 460,290 546,797
STATEMENT OF RECOGNISED INCOME AND EXPENSE
as at 30th June 2007
6 months 6 months Year
ended ended ended
30.6.07 30.6.06 31.12.06
(Unaudited) (Unaudited) (Audited)
€ '000 € '000 € '000
Net result for financial period attributable to Group 89,171 67,979 151,032
shareholders
Currency translation 2,044 (9,430) (4,657)
Cash flow hedging in equity (91) (157) (337)
Acturarial losses on defined benefit pension scheme - (4,265) (685)
Income taxes relating to items charged or credited to equity - 1,279 206
Total recognized income and expense for the period 91,124 55,406 145,559
GROUP CASH FLOW STATEMENT
for the period ended 30th June 2007
Notes 6 months 6 months Year
ended ended ended
30.6.07 30.6.06 31.12.06
(Unaudited) (Unaudited) (Audited)
€ '000 € '000 € '000
Operating activities
Result for the year before tax 108,184 83,413 185,200
Adjustments 8 30,341 25,768 54,393
Change in inventories (28,535) (9,910) (18,446)
Change in trade and other receivables (67,997) (51,601) (68,313)
Change in trade and other liabilities 37,855 30,104 48,669
Pension contributions (1,499) (1,817) (4,561)
Cash generated from operations 78,349 75,957 196,942
Taxes paid (9,827) (7,725) (25,498)
Net cash flow from operating 68,522 68,232 171,444
activities
Investing activities
Additions to property, plant and equipment (75,514) (26,510) (59,487)
Increase in finance leases 2,807 - 67
Proceeds from disposals of property, plant and equipment 2,110 1,636 1,747
Proceeds from financial assets 19 - 528
Purchase of subsidiary undertakings (26,561) (6,487) (70,815)
Net cash acquired with acquisitions 716 (768) (7,073)
Payment of deferred consideration in respect of acquisitions (2,241) (10,450) (16,102)
Dividends paid to minorities - - (14)
Interest received 784 1,340 2,654
Net cash flow from investing (97,880) (41,239) (148,495)
activities
Financing activities
Proceeds from bank loans and loan notes 46,924 1,636 -
Repayment of bank loans (12,915) (13,313) (35,998)
Discharge of finance lease liability (124) (150) (2,406)
Proceeds from share issues 2,188 1,149 3,288
Interest paid (6,313) (5,603) (11,087)
Dividends paid (20,767) (15,014) (25,103)
Net cash flow from financing 8,993 (31,295) (71,306)
activities
Cash and cash equivalents at the beginning of the 61,864 110,231 110,231
period
Net increase in cash and cash equivalents (20,365) (4,302) (48,357)
Translation adjustment (568) (1,456) (10)
Cash and cash equivalents at the end of the period 40,931 104,473 61,864
Cash and cash equivalents as at 1st January 2007 were made up
of:
Cash and cash equivalents 69,060 120,165 120,165
Overdrafts (7,196) (9,934) (9,934)
61,864 110,231 110,231
Cash and cash equivalents as at 30th June 2007 were made up of:
Cash and cash equivalents 40,934 105,819 69,060
Overdrafts (3) (1,346) (7,196)
40,931 104,473 61,864
Kingspan Group plc
Notes to the Financial Statements
as at 30 June 2007
Accounting policies (Notes 1 & 2)
1 Basis of preparation
The information presented in these condensed interim financial statements has been prepared
in accordance with the IAS 34 issued by the International Accounting Standards Board and in
accordance with the accounting policies as set out on pages 64 to 70 of the Annual Report
for the year ended 31st December 2006.
The 2007 interim results and balance sheet are presented in Euro. Results and cash flows
of foreign 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 results for the half year to 30th June 2007 and 30th June 2006 are unaudited.
The comparative figures for the year ended 31st December 2006 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.
Kingspan Group plc is a public limited company domiciled in Ireland with its registered
office being held at Dublin Road, Kingscourt, Co. Cavan. Kingspan Group plc is a building
product business focused on establishing leading market positions by providing innovative
construction systems and solutions with a global reach.
2 Reporting currency
The currency used in this preliminary announcement is Euro. Results and cash flows of
foreign subsidiary undertakings have been translated into Euro at the average exchange
rates, and the related balance sheets have been translated at the rates of exchange ruling
at the balance sheet date.
Exchange rates used were as follows:
Average rate Closing rate
Euro = 30.6.07 30.6.06 31.12.06 30.6.07 30.6.06 31.12.06
Pound Sterling 0.675 0.687 0.682 0.673 0.684 0.670
US Dollar 1.330 1.230 1.256 1.346 1.262 1.313
Czech Koruna 28.172 28.522 28.367 28.700 28.480 27.590
Polish Zloty 3.852 3.899 3.906 3.789 4.070 3.840
Canadian Dollar 1.509 1.400 1.425 1.440 1.400 1.525
Australian Dollar 1.645 1.656 1.668 1.585 1.710 1.670
3 Segment reporting
Analysis by class of business
Insulated
Panels Offsite & Environmental Access TOTAL
Segment Revenue & Boards Structural & Renewables Floors
€m €m €m €m €m
Total Revenue - H1 2007 505.2 169.3 141.6 92.3 908.4
Total Revenue - H1 2006 367.7 114.6 119.9 73.7 675.9
Total Revenue - 2006 816.5 246.2 249.0 149.5 1,461.2
Intersegment revenue is not material and is thus not subject to separate
disclosure in the above analysis
Segment Result (profit before finance costs)
Insulated Panels Offsite & Environmental Access TOTAL TOTAL TOTAL
& Boards Structural & Renewables Floors H1 2007 H1 2006 2006
€m €m €m €m €m €m €m
Operating result - H1 2007 78.1 14.2 9.9 12.0 114.2
Operating result - H1 2006 58.3 12.6 10.0 7.1 88.0
Operating result - 2006 128.0 27.5 20.9 17.6 194.0
Finance costs (net) (6.0) (4.6) (8.8)
Result for the period 108.2 83.4 185.2
before tax
Income tax expense (18.5) (15.4) (33.5)
Net result for the 89.7 68.0 151.7
period
Segment Assets and Liabilities
Insulated Panels Offsite & Environmental Access TOTAL TOTAL TOTAL
& Boards Structural & Renewables Floors H1 2007 H1 2006 2006
€m €m €m €m €m €m €m
Assets - H1 2007 670.2 235.8 225.1 139.6 1,270.7
Assets - H1 2006 457.3 149.4 172.7 137.9 917.3
Assets - 2006 534.8 216.0 201.2 136.6 1,088.6
Liabilities- H1 2007 (193.4) (77.4) (52.1) (39.3) (362.2)
Liabilities - H1 2006 (143.4) (60.1) (46.8) (30.9) (281.2)
Liabilities - 2006 (163.8) (77.5) (50.5) (30.9) (322.7)
Total assets less total 908.5 636.1 765.9
liabilities
Cash and cash 40.9 105.8 69.1
equivalents
Deferred tax asset 2.7 2.3 2.7
Interest bearing loans and borrowings (current and (270.2) (248.7) (240.6)
non-current)
Deferred consideration (current and non-current) (17.4) (7.4) (16.0)
Income tax liabilities (current and (43.5) (27.9) (34.3)
deferred)
Total Equity as reported in Group 621.0 460.2 546.8
Balance Sheet
Other Segment
Information
Insulated
Panels Offsite & Environmental Access TOTAL
& Boards Structural & Renewables Floors
€m €m €m €m €m
Capital Investment - H1 2007 77.3 9.6 13.5 2.7 103.1
Capital Investment - H1 2006 29.3 2.2 2.7 4.3 38.5
Capital Investment - 2006 77.8 56.4 21.8 8.8 164.8
Depreciation included in segment result - H1 2007 (10.7) (3.6) (3.3) (1.9) (19.5)
Depreciation included in segment result - H1 2006 (8.6) (2.9) (3.4) (3.9) (18.8)
Depreciation included in segment result - 2006 (19.7) (6.8) (6.5) (6.3) (39.3)
Amortisation included in segment result - H1 2007 (0.6) (1.4) (0.5) 0.0 (2.5)
Amortisation included in segment result - H1 2006 (0.5) (0.6) (0.2) 0.0 (1.3)
Amortisation included in segment (0.9) (1.3) (0.4) (0.1) (2.7)
result - 2006
Non- Cash Items included in segment result - H1 2007 0.1 0.0 0.0 0.0 0.1
Non- Cash Items included in segment result - H1 2006 0.5 0.0 0.0 0.0 0.5
Non- Cash Items included in segment result - 2006 (0.1) 0.0 0.0 0.0 (0.1)
Analysis of Segmental Data by
Geography
Republic of United Rest of
Ireland Kingdom Europe Americas Others TOTAL
€m €m €m €m €m €m
Income Statement Items
Segment Revenue - H1 2007 144.5 517.5 163.3 66.1 17.0 908.4
Segment Revenue - H1 2006 125.7 394.3 111.2 36.3 8.4 675.9
Segment Revenue - 2006 261.5 822.1 272.1 78.9 26.6 1,461.2
Balance Sheet Items
Assets - H1 2007 188.2 750.4 195.3 118.5 18.3 1,270.7
Assets - H1 2006 203.8 498.2 136.5 64.5 14.3 917.3
Assets - 2006 162.6 653.2 171.1 87.2 14.5 1,088.6
Other segmental
information
Capital Investment - H1 2007 15.1 57.2 12.4 17.5 0.9 103.1
Capital Investment - H1 2006 2.6 16.1 3.8 3.9 12.1 38.5
Capital Investment - 2006 21.6 87.5 21.1 21.5 13.1 164.8
4 Dividends
An interim dividend at the rate of 8.00c per share (2006 : 6.00c) is payable on 5th October
2007 to shareholders on the register at close of business on 14th September 2007.
An interim dividend on Ordinary Shares is recognised as a liability in the Group's
financial statements on a cash paid basis under IFRS rather than on an accruals basis which
was the accounting treatment previously adopted under Irish GAAP.
The Final Dividend on Ordinary Shares for 2006 (€22.0 million) was approved by shareholders
in May 2007 and, in accordance with IFRS, was recognised as a charge to reserves in the six
month period ended 30 June 2007.
5 Earnings per share
6 months 6 months Year
ended ended Ended
30.6.07 30.6.06 31.12.06
€'000 €'000 €'000
The calculations of earnings per share are based on
the following:
Profit attributable to ordinary 89,171 67,979 151,032
shareholders
Number of Number of Number of
shares ('000) shares ('000) shares ('000)
30.6.07 30.6.06 31.12.06
Weighted average number of ordinary shares for the calculation 169,150 168,169 168,149
of basic earnings per share
Dilutive effect of share options 4,418 4,525 3,936
Weighted average number of ordinary shares 173,568 172,694 172,085
for the calculation of diluted earnings per share
€ cent € cent € cent
Basic earnings per 52.7 40.4 89.8
share
Diluted earnings per 51.4 39.4 87.8
share
6 Goodwill
As at 30th June 2007 Goodwill
€ '000
At 1st January 287,580
Additions 15,136
Net exchange difference (699)
At 30th June 2007 302,017
7 Other intangible assets
As at 30th June 2007
Patents Brands Technical Other Total
Know-how
€ '000 € '000 € '000 € '000 € '000
At 1st January 923 13,965 976 1,253 17,117
Additions - - - 1,500 1,500
Amortisation (222) (1,832) (60) (383) (2,497)
Net exchange difference - (14) 1 9 (4)
At 30th June 2007 701 12,119 917 2,379 16,116
8 Cash flow
statement
The following non-cash adjustments have been made to the pre-tax result
for the period to arrive at operating cash flow:
6 months 6 months Year
ended ended Ended
30.6.07 30.6.06 31.12.06
Adjustments: €'000 €'000 €'000
Depreciation, amortisation and impairment charges of fixed and 21,989 20,116 41,957
intangible assets
Employee equity-settled share 2,392 1,532 3,492
options
Finance income (769) (1,447) (2,775)
Finance cost 6,781 6,048 11,620
(Profit)/loss on sale of tangible (52) (481) 99
assets
Total 30,341 25,768 54,393
9 Reconciliation of net cash flow to movement in net debt
6 months 6 months Year
ended ended Ended
30.6.07 30.6.06 31.12.06
€'000 €'000 €'000
Decrease in cash and bank (20,365) (4,302) (48,357)
overdrafts
(Increase)/Decrease in debt, lease finance and (31,644) 22,277 54,506
deferred consideration
Change in net debt resulting from (52,009) 17,975 6,149
cash flows
Loans and lease finance acquired with subsidiaries (23) (3,969) (15,365)
Deferred consideration arising on acquisitions in (3,590) - (14,086)
the period
New finance leases (2,807) - (67)
Translation movement (689) (768) (679)
Net movement (59,118) 13,238 (24,048)
NET DEBT AT START OF THE PERIOD (187,564) (163,516) (163,516)
NET DEBT AT END OF THE PERIOD (246,682) (150,278) (187,564)
10 Board approval
The Interim Report was approved by the Board of Directors of Kingspan Group
plc on 31st August 2007.
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