Shares in Irish building materials group Kingspan (KGP) touched an all-time high of €80.60, up 4.7% on the day, after it published a half-year update showing trading ahead of expectations.
The firm reported that the first quarter’s strong momentum, which it flagged in its April trading update, had continued into the second quarter with ‘most key markets strongly ahead of the first half of 2020 and indeed the first half of 2019.’
The order backlog has grown further since and the company now sees sales growth of almost 40% in the first half to €2.9 billion.
Kingspan now says that trading profits are seen rising almost 60% to €315 million, from €200 million last year. That's despite record raw material inflation, a situation which the firm says is ongoing and expected to continue ‘through the summer months at least.’
INDUSTRY-WIDE RECOVERY
Kingspan isn’t alone in seeing strong demand for its products. Building materials distributor and DIY retailer Grafton (GFTU) also reported strong demand continuing from the first into the second quarter and said operating profits for the full year would be 15% to 20% ahead of the current consensus.
Continued strong demand for new housing and from the repair, maintenance and improvement or RMI market is driving demand for building products to unprecedented levels with widespread shortages reported in cement, paint, roof tiles, steel joists and timber.
Several DIY and trade retailers, including Travis Perkins, have warned customers recently they would have to hike prices for a range of essential building products due to supply chain shortages and record short-term demand.
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