Kingspan, the building insulation giant based in Co Cavan, saw its shares rise by almost 16% after announcing “record profits” for the first half of the year. This positive news, coupled with reassurances about its trading outlook despite global interest rate hikes and soaring inflation, has led to a substantial increase in the company’s stock market value. Since the beginning of the year, Kingspan’s market value has grown by over €3.5bn, or 30%.
Building-product manufacturers like Kingspan are closely watched for any indications that interest rate hikes are negatively impacting their commercial property clients and their ability to pass on cost increases. In its update, Kingspan did not provide specific details about pricing. The company, which will release its full results next month, is now valued at €12bn.
Kingspan noted that the residential sector worldwide has been subdued due to higher interest rates, although the underlying demand for housing remains strong in most markets. The company expects its profit for the first six months to be approximately €435m, slightly higher than the €434m reported for the same period in 2022. Market and category performances have varied significantly, with the company’s operations in America surpassing its European activity.
Kingspan was involved in the inquiry into the Grenfell Tower fire in London, which claimed the lives of 72 people. The inquiry questioned the company’s business practices, but Kingspan clarified that its products accounted for only a small portion of the insulation used in the residential tower and that it neither supplied nor recommended the use of those products. Following public outcry, Kingspan decided to cancel its plans to sponsor the Mercedes Formula One team.
Overall, Kingspan’s strong financial performance and positive outlook have propelled its shares to new heights. The company continues to navigate the challenges posed by inflation and interest rate hikes, while maintaining its commitment to transparency and responsible business practices. As the residential sector gradually recovers and the demand for housing remains robust, Kingspan is well-positioned to capitalize on future opportunities in the global market.