Kingspan Group PLC on Friday said first-quarter revenue and sales surged on inflation-led pricing, but cautioned that margins might reflect a ‘lag’ after a spike in raw material costs over the past few weeks.

The Kingscourt, Ireland-based building materials company reported revenue of €1.89 billion for the three months to March 31. This reflects an increase of 47% year-on-year and a 31% rise on an underlying basis, the company said.

The company reported the strongest growth in its Insulation division, where sales grew 72% in the quarter. It attributed this to the acquisition of technical insulation solutions supplier Logstor International Holding in March 2021 for €253 million.

The company still noted that much of the underlying sales growth in the division reflected inflation led pricing and said that volumes were broadly in line with the comparable quarter a year prior.

Kingspan also recorded significant growth in its Insulated Panels unit. Sales were up 44% in this segment, due to a ‘positive’ performance across the most significant markets worldwide. Nonetheless, raw material inflation necessitated significant pricing activity year-on-year, it said.

The company noted that the trading outlook for the second quarter is ‘positive’, due to a strong order backlog on hand and ‘decent’ activity in most end markets.

However, Kingspan warned that raw material inflation has returned ‘sharply’ over the past six weeks, despite having eased considerably at the turn of the year. It said that its associated recovery effort is ongoing.

As a result, margins are likely to see a ‘lag’ though, Kingspan cautioned.

As at March 31 the company’s net debt stood at €905 million, reflecting an acquisition spend of €67 million in the first quarter.

Kingspan said its current liquidity is ‘very strong’ and in excess of €2.1 billion in cash and undrawn committed facilities, including €800 million of new additional term facilities agreed on April 13.

Shares were down 0.1% at €88.44 each on Friday midday in London.

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