April 30, 2020 / 7:16 AM / a month ago

UPDATE 1-Ireland's Kingspan close to breakeven after April sales fall 35%

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DUBLIN, April 30 (Reuters) - Kingspan expects to be close to breakeven in the usually highly profitable month of April after sales fell 35% year on year because of the enforced halt to construction activity in many markets, the Irish insulation maker said on Thursday.

The company has sought to offset the collapse in sales by cutting executive pay by 50% and for the rest of its 14,500 staff by 40% for an initial two-month period from April 1.

The company reported a 3% drop in first-quarter sales in a trading update but said the trading context had changed manifestly since the middle of March and it expects the trading pattern to persist through the coming weeks at the very least.

It released only revenue figures for the first quarter and limited its comments on profitablity to April. Kingspan’s 2019 core earnings were up 11% at 580 million euros ($631.2 million) last year, it reported in February.

The recent sharp drop in sales was because UK construction activity this month has been at less than half the levels in April last year and 80% down in Ireland, with France and southern Europe also “particularly weak”.

Markets in the Americas, Germany and parts of Central Europe have been robust, it added.

The UK contributed 19% of last year’s revenue, with the rest of Europe accounting for 53% while 21% came from the Americas.

Kingspan said it was difficult to look ahead with “any modicum of certainty” but its market diversification, innovation and balance sheet strength make it well positioned for the longer term.

That included in excess of 1 billion euros of cash on hand and committed undrawn facilities.

$1 = 0.9189 euros Reporting by Padraic Halpin Editing by David Goodman

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