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KGP Kingspan Group Plc

72.80
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Kingspan Group Plc LSE:KGP London Ordinary Share IE0004927939 ORD EUR0.13 (CDI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 72.80 72.50 73.10 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Kingspan Group PLC Half-year Report (3430O)

18/08/2017 7:00am

UK Regulatory


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RNS Number : 3430O

Kingspan Group PLC

18 August 2017

KINGSPAN GROUP PLC

HALF-YEARLY FINANCIAL REPORT

for the period ended 30 June 2017

KINGSPAN GROUP PLC

RESULTS FOR THE HALF YEAR 30 JUNE 2017

Kingspan, the global leader in high performance insulation and building envelope solutions, issues its half-yearly financial report for the six month period ended 30 June 2017.

Financial Highlights:

   --    Revenue up 19% to EUR1.75bn, (pre-currency, up 21%). 
   --    Trading profit* up 6% to EUR177.8m, (pre-currency up 10%). 
   --    Acquisitions contributed 10% to sales growth and 6% to trading profit growth in the period. 
   --    Group trading margin** of 10.2%, a decrease of 120bps versus the same period in 2016. 
   --     Net debt of EUR440.3m (H1 2016: EUR348.1m). Net debt to EBITDA of 1.06x (H1 2016: 0.9x). 
   --     Basic EPS up 5% to 74.4 cent (H1 2016: 70.6 cent). 
   --     Interim dividend per share up 10% to 11.0 cent (H1 2016: 10.0 cent). 
   --     17.3% ROCE (H1 2016: 17.8%). 

Operational Highlights:

-- Insulated Panel sales growth of 17% with a continuing improvement in Western Europe, solid activity in the UK and tougher, although resilient, performances in North America and Eastern Europe.

-- Insulation Board sales growth of 8% with ongoing advancement of Kooltherm(R) in all key markets.

   --    Light & Air sales of EUR81.7m making a strong start in its maiden results period. 

-- Environmental continues to progress positively overall. Access Floors is ahead in the UK, albeit with a softer pipeline towards year end, with subdued activity in North America.

-- The pass through of significant and ongoing raw material increases was a key trading theme in the period.

Summary Financials:

 
                     H1 '17    H1 '16     % Change 
                       EURm      EURm 
------------------  --------  --------  ---------- 
 Revenue             1,749.3   1,468.1     +19% 
 EBITDA               209.2     196.8       +6% 
 Trading Profit*      177.8     167.3       +6% 
 Trading Margin**     10.2%     11.4%     -120bps 
 EPS (cent per 
  share)              74.4      70.6        +5% 
------------------  --------  --------  ---------- 
 

* Operating profit before non-trading items and amortisation of intangibles

** Operating profit before non-trading items and amortisation of intangibles divided by total revenue

Gene Murtagh, Chief Executive of Kingspan commented:

"The first six months of 2017 were strong for Kingspan. We expect end market activity to be broadly positive for the remainder of the year and at current exchange rates to deliver a full-year result at least in line with consensus. Whilst margins contracted somewhat, we anticipate further recovery of input increases in the second half. Our balance sheet is strong and ready to support our development agenda as the opportunities unfold."

For further information contact:

 
 Murray Consultants   Tel: +353 (0) 1 4980 
  Douglas Keatinge     300 
 

Business Review

In the first six months of 2017, Kingspan delivered strong revenue growth with sales up 19% over the prior year. The primary drivers of this growth were the ever increasing demand for greater energy efficiency, a robust recovery in much of Western Europe, and a significant inflationary dimension in the second quarter. Trading profit increased by 6%, which was somewhat constrained by a lag in selling price increases. Whilst chemical raw material costs will rise further in the second half, margins are expected to improve as the sales price increases notified earlier in the year come into effect.

Market activity in general has been positive, even in the UK despite the underlying political uncertainty. The US and Germany have also performed robustly, whilst the Netherlands and France in particular have demonstrated a strong recovery from the lows of a few years ago. The Nordics and Australia performed well for Kingspan, however, less positive were pockets of Central Europe and the Middle East, although penetration growth in the latter continued to drive sales growth.

So far this year we have invested EUR64m, EUR50m of which was on internal capital projects, and EUR14m on acquisitions, one of which marked our entry into South America, and another providing an enhanced presence in Australia. Since period end, we have acquired CPI Daylighting in the US for consideration of EUR40m, further bolstering our global Light & Air footprint. Our future acquisition pipeline remains healthy.

On the technology front, QuadCore(R) and Kooltherm(R) continued to increase penetration. QuadCore(R) represented 5% of Kingspan's Insulated Panels sales, up from initially zero in 2016, with Kooltherm accounting for 35% of Kingspan's rigid board sales, again well ahead of the same period last year.

Innovation

For decades now, innovation has been a cornerstone of Kingspan's strategy. The sole focus of this is to create consistent tangible differentiation from competing technologies and systems by providing superior performance at every step.

The vast portion of our new R&D initiatives fall into the categories of Thermal, Fire, Aesthetics and Structural.

v Thermal - our most recent developments have been QuadCore(R) Version 1, Kooltherm(R) Version 2, and Optim-R(R). The first two outperform other rigid insulations by up to 20%, and materials like mineral wool by almost 60% when measured on a performance/thickness scale.

v Fire - over the last ten years, we have developed ground-breaking fire performing rigid insulations that have undergone more independent testing worldwide than any other insulation material. In all, more than 1,700 tests have been carried out on our products, and some are now achieving standards that were previously reserved for fibre containing materials often referred to as 'non-combustible'.

v Aesthetic - Kingspan's Insulated Panels and Façades now feature offerings that include Benchmark(R), Matrix(R) and Dri-Design(R). These form part of our ever-expanding array of finishes that both inspire and enable the creative freedom that today's designers require.

v Structural - the current focus of this aspect of our innovation effort is to develop multiple span flat roofing insulated panels that more fully address the conversion opportunity on membraned roofs, and open up a relatively new and under exploited market for Kingspan.

Insulated Panels

 
                   H1 '17    H1 '16   % Change 
                     EURm     EURm 
----------------  --------  -------  --------- 
 Revenue           1,111.7   949.5    +17% (1) 
 Trading Profit     116.9    112.0      +4% 
 Trading Margin     10.5%    11.8%    -130bps 
----------------  --------  -------  --------- 
 
   (1)   Comprising underlying +11%, currency impact -1% and acquisitions +7% 

Mainland Europe & Middle East

Activity across much of Western Europe has been strong during the first half of 2017, with the Benelux, France and Nordics being particular standouts for Kingspan. Penetration rates of high performance Insulated Panels remain relatively low in some of these regions, which when combined with wider improvement in building activity led to a strong performance in the period. Germany was broadly flat at a revenue level, and order intake has also presented somewhat of a challenge as we push to recover margin in an increasingly competitive market. Central Europe was quite mixed in the period, whilst non-residential activity in Turkey and the Middle East remained understandably subdued.

UK

Having delivered an uncharacteristically strong first quarter, revenue in the UK eased off as expected during the second quarter in part owing to a relatively soft retail build programme by the traditional incumbents. Quotation activity remains encouraging however and intake in quarter three is expected to improve as sectors such as data, online retail and continental retailers continue to develop their physical infrastructure across the UK. Kingspan's solutions are often a key component in these developments, now further enhanced by our Quadcore(R) offering which represented 5% of Panel sales in the first half, up from virtually zero a year earlier.

Americas

Insulated Panel revenue and volume were both comfortably ahead of the same period last year, owing to the strength of backlog at the turn of the year. As with most of our markets worldwide, the recovery of raw material inflation was central, particularly in the second quarter. Our strategy has been to fully recover, even at the expense of market share loss. This transpired in quarter two, and was particularly pronounced in Canada, where much of the market has not responded to the cost increases. Our near-term approach is to hold our line as we anticipate further increases in the second half. Encouragingly, market penetration in the US continues to advance. We have recently begun manufacturing in Mexico, and also acquired 51% of PanelMet in Colombia. We expect these investments to be the beginning of our longer term Latin American strategy, as we embark on an entirely new frontier for Kingspan.

Australasia

This region has again demonstrated encouraging growth as penetration rises in Australia and New Zealand, and the early efforts of our market entry into South East Asia pay dividends. The energy efficiency of buildings in general across this region lags significantly behind the levels achieved across Europe. Our aim therefore is to be instrumental in the drive towards a more efficient build environment in this region, a goal that has delivered well for Kingspan over the last decade.

Ireland

Given its relative size, the market in Ireland can be sensitive to the presence of major projects. Over the last few years this market has grown consistently, and although the medium term pipeline is very positive, actual activity in the first half of 2017 is broadly flat with 2016. We expect the second half to display a similar pattern.

Insulation Boards

 
                   H1'17   H1 '16   % Change 
                    EURm    EURm 
----------------  ------  -------  --------- 
 Revenue           373.7   347.4    +8% (1) 
 Trading Profit    40.0     39.9       - 
 Trading Margin    10.7%   11.5%     -80bps 
----------------  ------  -------  --------- 
 
   (1)   Comprising underlying +11% and currency impact -3% 

UK

Insulation Board sales revenue in the UK grew significantly in the first half of the year through a combination of modest overall volume growth, a notable increase in conversion to Kooltherm(R), and pronounced selling price increases resulting from the steep chemical inflation we have been experiencing. The latter, when combined with the associated supply constraints imposed upon the market, has created an environment for Kingspan to accelerate conversion to our proprietary Kooltherm(R) technology which now represents 35% of our rigid board sales worldwide, and 34% in the UK alone.

Mainland Europe

Sales volume in Continental Europe has been strong so far this year, particularly in the Benelux, Germany and the Nordics. Whilst cost inflation recovery was somewhat slower than in other markets during the first half, quarter three will see notable traction on this front. Kooltherm conversion has also been encouraging in these markets, to the point that we intend developing a greenfield manufacturing facility in the Nordics during 2018.

Americas

Revenue in North America for our XPS products has been broadly flat with prior year as our facility in Winchester has been operating at maximum capacity. We are currently in the process of commissioning a new line there which, when fully operational, will provide approximately $40m in additional revenue potential. Concurrently, we are in the early stages of developing the specification channel for Kooltherm(R) and Optim-R(R). Progress can be expected to be gradual in this regard as both technologies are new to the North American market.

Australasia & the Middle East

Activity in both of these markets has been tracking ahead of prior year. This has been driven in the main by the growth in conversion to Kooltherm(R) in Australia, now supported by our recent plant opening in Melbourne, and by the continued rise in high performance insulation across the Middle East, particularly in residential applications in the Gulf States. A new rigid board line was commissioned in the UAE earlier this year, where we would also aim to develop a Kooltherm(R) facility over the coming two to three years.

Ireland

The progress of our insulation business in Ireland has been very encouraging in recent times. The raw material supply shortage has resulted in us activating an accelerated conversion strategy towards Kooltherm(R). This approach has been effective in both meeting our customers' insulation needs during this time of shortage, as well as simultaneously enhancing the margin profile of our business in this market.

Light & Air

 
                  H1'17   H1 '16 
                   EURm    EURm 
---------------  ------  ------- 
 Revenue          81.7     n/a 
 Trading Profit    3.0     n/a 
 Trading Margin   3.7%     n/a 
---------------  ------  ------- 
 

This new division, formed in the second half of 2016, aims to develop a global leadership position in the market for efficient daylighting, smoke management and ventilation systems that not only complements Kingspan's existing envelope activities, but also serves the wider building envelope market worldwide. As set out in the 2016 Annual Report, we have reported this business as a separate segment from 1 January 2017 onwards.

Starting with our original product set, we commenced a programme of expansion, through acquisition initially, to assemble a global footprint. Presently, we are manufacturing in Ireland, the UK, France, Germany and North America and expect to generate annual revenue of close to EUR200m, and an operating margin of approximately 7%, on plan, in what is typically a more second half weighted business. Over a five year period from now, we plan to develop the Light & Air division into a business with annual turnover exceeding EUR500m.

Environmental

 
                   H1'17   H1 '16   % Change 
                    EURm    EURm 
----------------  ------  -------  --------- 
 Revenue           88.9     79.5    +12% (1) 
 Trading Profit     6.7     4.2       +59% 
 Trading Margin    7.5%     5.3%    +220bps 
----------------  ------  -------  --------- 
 
   (1)   Comprising underlying +3%, currency impact -6% and acquisitions +15% 

This division experienced a solid performance in the first half of the year with like-for-like revenues up 3%.

Rainwater harvesting in Australia has been a key driver of this year's growth, which now with the addition of the Rhino(R) brand acquired recently, moves further into larger scale non-residential water management. Effluent treatment products have also performed well, as did our Ecosafe(R) fuel storage range.

Hot water and solarthermal products have however continued to experience tougher trading conditions in the UK, and continuous cost improvement will remain our primary focus in this business segment medium term.

Access Floors

 
                   H1'17   H1 '16   % Change 
                    EURm    EURm 
----------------  ------  -------  --------- 
 Revenue           93.3     91.7    +2% (1) 
 Trading Profit    11.2     11.2       - 
 Trading Margin    12.0%   12.2%     -20bps 
----------------  ------  -------  --------- 
 
   (1)   Comprising underlying +4% and currency impact -2% 

The trading pattern in this segment broadly mirrored that of recent years where the UK has continued to deliver a strong year-on-year result, in contrast to the class A office sector in the US which has remained relatively subdued. We can expect this pattern to prevail for the remainder of 2017, after which it is likely that office building activity in the UK will ease off.

The wider 'data' solutions dimension to this division has however continued to deliver well for Kingspan as we increase our exposure to many of the leading technology enterprises worldwide by providing multiple solutions to datacentre type applications. Also of note is the relatively embryonic but growing floor finishes product group. Together these two platforms will drive longer term evolution of this division worldwide.

Financial Review

Overview of results

Group revenue increased by 19% to EUR1,749.3m (H1 2016: EUR1,468.1m) and trading profit increased by 6% to EUR177.8m (H1 2016: EUR167.3m). This represents a 21% increase in sales and a 10% increase in trading profit on a constant currency basis. The Group's trading margin decreased by 120bps to 10.2% (H1 2016: 11.4%) reflecting the impact of higher input prices and the associated lag in recovery. The amortisation charge in respect of intangibles was EUR7.5m compared to EUR5.3m in the first half of 2016 with the increase reflecting, primarily, the year on year effect of intangible assets acquired as part of business acquisition activity during 2016. Group operating profit after amortisation and non-trading items grew 5% to EUR170.9m. Profit after tax was EUR133.1m compared to EUR125.7m in the first half of 2016 driven, in the main, by the growth in trading profit. Basic EPS for the period was 74.4 cent, representing an increase of 5% on the first half of 2016 (H1 2016: 70.6 cent).

The Group's underlying sales and trading profit performance by division is set out below:

 
 Sales                Underlying   Currency   Acquisition   Total 
-------------------  -----------  ---------  ------------  ------ 
 Insulated Panels        +11%        -1%          +7%       +17% 
 Insulation Boards       +11%        -3%           -         +8% 
 Access Floors           +4%         -2%           -         +2% 
 Environmental           +3%         -6%         +15%       +12% 
 Group *                 +11%        -2%         +10%       +19% 
                     -----------  ---------  ------------  ------ 
 

* Includes Light & Air

The Group's trading profit measure is earnings before non-trading items, interest, tax and amortisation of intangibles:

 
 Trading Profit       Underlying   Currency   Acquisition   Total 
-------------------  -----------  ---------  ------------  ------ 
 Insulated Panels        +2%         -4%          +6%        +4% 
 Insulation Boards       +3%         -3%           -          - 
 Access Floors           +4%         -4%           -          - 
 Environmental           +40%        -6%         +25%       +59% 
 Group *                 +4%         -4%          +6%        +6% 
                     -----------  ---------  ------------  ------ 
 

* Includes Light & Air

Finance costs (net)

Finance costs for the period were modestly higher than the same period last year at EUR7.6m (H1 2016: EUR7.2m). Finance costs include a non-cash charge of EUR0.1m (H1 2016: EUR0.1m) relating to the Group's legacy defined benefit pension schemes. A net non-cash credit of EUR0.5m was recorded in respect of swaps on the Group's USD private placement notes (H1 2016: charge of EUR0.2m). The Group's net interest expense on borrowings (bank and loan notes) was EUR7.9m compared to EUR6.9m in the first half of 2016. The increased interest charge reflects the interest on the new private placement completed in November 2016.

Taxation

The tax charge for the first half of the year was EUR30.2m (H1 2016: EUR29.1m) which represents an effective tax rate of 18.5% on profit before tax (H1 2016: 18.8%). The decrease in the effective rate reflects the global mix of earnings year on year.

Retirement benefits

The primary method of pension provision for current employees is by way of defined contribution arrangements. The Group has two legacy defined benefit schemes in the UK which are closed to new members and to future accrual. In addition, the Group assumed a number of smaller defined benefit pension liabilities in mainland Europe through acquisitions completed in recent years. The net pension liability in respect of these schemes and obligations was EUR15.0m at 30 June 2017 (30 June 2016: EUR7.1m).

Free cashflow

 
 Free cashflow                     H1 '17   H1 '16 
                                    EURm     EURm 
--------------------------------  -------  ------- 
 EBITDA*                           209.2    196.8 
 Movement in working capital 
  **                               (84.9)   (26.0) 
 Net capital expenditure           (46.0)   (52.5) 
 Pension contributions             (0.6)    (1.1) 
 Net finance costs paid            (9.8)    (7.5) 
 Income taxes paid                 (32.0)   (20.3) 
 Other including non-cash items     3.5      3.2 
                                  -------  ------- 
 Free cashflow                      39.4     92.6 
                                  -------  ------- 
 

*Earnings before finance costs, income taxes, depreciation, amortisation and non-trading items

**Excludes working capital on acquisition but includes working capital movements since that point

Working capital at 30 June 2017 was EUR445.4m (31 December 2016: EUR382.7m), an increase of EUR62.7m in the period. This increase is driven by the working capital on acquisitions in the period, a seasonal build in the first half of the year and increased steel and chemical prices.

The average working capital to sales % was 13.1% in H1 2017 compared to 10.5% in H1 2016.

Net Debt

Net debt increased by EUR12.4m during the first half of the year to EUR440.3m (31 December 2016: EUR427.9m) and this is analysed in the table below:

 
 Movement in net debt           H1 '17    H1 '16 
                                 EURm      EURm 
-----------------------------  --------  -------- 
 Free cashflow                   39.4      92.6 
 Acquisitions and disposals      (8.6)    (80.6) 
 Share issues                     0.1       1.0 
 Dividends paid                 (42.0)    (30.2) 
                               --------  -------- 
 Cashflow movement              (11.1)    (17.2) 
 Exchange movements on 
  translation                    (1.3)     (2.9) 
                               --------  -------- 
 Increase in net debt           (12.4)    (20.1) 
 Net debt at start of period    (427.9)   (328.0) 
                               --------  -------- 
 Net debt at end of period      (440.3)   (348.1) 
                               --------  -------- 
 

Capital Structure and Group Financing

The Group funds itself through a combination of equity and debt. Debt is funded through a combination of syndicated bank facilities and private placement loan notes.

In June 2017, the Group refinanced its primary syndicated bank debt facility. The new facility, negotiated on more favourable terms than the previous facility, is a EUR500m revolving credit facility, with a syndicate of ten international banks, with a committed term to June 2022. This facility was undrawn at 30 June 2017. This facility replaced a previous EUR300m syndicated facility, which was due to mature in March 2019, and bilateral agreements totalling EUR160m which were due to mature in January 2018.

In addition, as part of the Group's longer term capital structure, the Group has total private placement loan notes of EUR666m which have a weighted average maturity of 6.5 years.

The weighted average maturity of all debt facilities is 5.9 years.

As well as ongoing free cashflow generation, the Group has significant available undrawn facilities and cash which provide appropriate headroom for operational requirements and development funding. Total available headroom was approximately EUR706m at 30 June 2017.

Related Party Transactions

There were no changes in related party transactions from the 2016 Annual Report that could have a material impact on the financial position or performance of the Group in the first half of the year.

Principal Risks & Uncertainties

Details of the principal risks and uncertainties facing the Group can be found in the 2016 Annual Report. These risks, namely volatility in the macro environment, failure to innovate, product failure, business interruption (including IT continuity), credit risks & credit control, employee development & retention, fraud & cybercrime and acquisition & integration of new businesses, remain the most likely to affect the Group in the second half of the current year. The Group actively manages these and all other risks through its control and risk management processes.

Dividend

The Board has proposed an interim dividend of 11.0 cent per ordinary share, an increase of 10% on the 2016 interim dividend of 10.0 cent per share. The interim dividend will be paid on 6 October 2017 to shareholders on the register on the record date of 1 September 2017.

Looking Ahead

We expect end market activity to be broadly positive during the remainder of 2017, with a solid performance anticipated in the UK and Ireland, continued strength across much of Western Europe and the Nordics, and a reasonably stable environment in North America.

Conversion towards our high performance insulations and building envelopes has been on an upward trajectory for some time now. The recent pattern has been, and is expected to remain, consistent with this as the thermal, aesthetic, and fire performance of our solutions play a more significant role in specifications as we move forward.

Nearer term we anticipate an unrelenting chemical supply environment that will maintain high cost and pricing levels, which may be accompanied by a constrained flow of material. In light of these circumstances Kingspan will continue to successfully deploy its wide-ranging product set to limit the impact of this issue, and at current exchange rates we expect to at least meet the consensus view of 2017 as a whole.

RESPONSIBILITY STATEMENT

Directors' Responsibility Statement in respect of the half-yearly financial report for the six month period ended 30 June 2017

Each of the directors of Kingspan Group plc confirm our responsibility for preparing the half year financial report in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007, the Transparency Rules of the Central Bank of Ireland and with IAS 34 Interim Financial Reporting, as adopted by the EU, and to the best of our knowledge and belief:

a) the condensed interim financial statements comprising the Condensed Consolidated Income Statement, the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Statement of Financial Position, the Condensed Consolidated Statement of Changes in Equity, the Condensed Consolidated Statement of Cash Flows and related notes have been prepared in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007, the Transparency Rules of the Central Bank of Ireland and with IAS 34 Interim Financial Reporting as adopted by the EU.

b) The interim management report includes a fair review of the information required by:

i) Regulation 8(2) of the Transparency (Directive 2004/109/EC) Regulations 2007, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

ii) Regulation 8(3) of the Transparency (Directive 2004/109/EC) Regulations 2007, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

The directors of Kingspan Group plc, and their functions, are as listed in the 2016 Annual Report.

On behalf of the Board

 
 Gene Murtagh        Geoff Doherty 
----------------    ------------------------ 
 Chief Executive     Chief Financial Officer 
  Officer 
----------------    ------------------------ 
 
 18 August 2017      18 August 2017 
----------------    ------------------------ 
 

Independent Review Report to Kingspan Group PLC

Introduction

We have been engaged by the company to review the condensed set of consolidated financial statements in the half-yearly financial report for the six months ended 30 June 2017 which comprises the Condensed Consolidated Income Statement, the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Statement of Financial Position, the Condensed Consolidated Statement of Changes in Equity, the Condensed Consolidated Statement of Cash Flows and the related explanatory notes. The financial reporting framework that has been applied in their preparation is International Financial Reporting Standards as adopted by the EU ("IFRSs"). Our review was conducted having regard to the Financial Reporting Council's ("FRC's") International Standard on Review Engagements ("ISRE") (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of consolidated financial statements in the half-yearly report for the six months ended 30 June 2017 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU, the TD Regulations and the Transparency Rules of the Central Bank of Ireland.

Basis of our report, responsibilities and restriction on use

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the TD Regulations and the Transparency Rules of the Central Bank of Ireland. As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The directors are responsible for ensuring that the condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. Our responsibility is to express to the company a conclusion on the condensed set of consolidated financial statements in the half-yearly financial report based on our review.

We conducted our review having regard to the Financial Reporting Council's International Standard on Review Engagements (UK and Ireland) 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We read the other information contained in the half-yearly financial report to identify material inconsistencies with the information in the condensed set of consolidated financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the review. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Transparency (Directive 2004/109/EC) Regulations 2007 as amended ("the TD Regulations") and the Transparency Rules of the Central Bank of Ireland. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

KPMG 18 August 2017

Chartered Accountants

1 Stokes Place

St. Stephen's Green

Dublin 2

Ireland

Kingspan Group plc

Condensed consolidated income statement (unaudited)

for the 6 month period ended 30 June 2017

 
                                            6 months    6 months 
                                               ended       ended 
                                             30 June     30 June 
                                                2017        2016 
 
                                    Note        EURm        EURm 
 
 Revenue                               4     1,749.3     1,468.1 
 Cost of Sales                             (1,243.5)   (1,010.7) 
                                          ----------  ---------- 
 
   Gross Profit                                505.8       457.4 
 Operating Costs *                           (328.0)     (290.1) 
                                          ----------  ---------- 
 
   Trading Profit                      4       177.8       167.3 
 Intangible amortisation                       (7.5)       (5.3) 
 Non-trading items                     6         0.6           - 
                                          ----------  ---------- 
 
 Operating Profit                              170.9       162.0 
 Finance expense                       7       (7.8)       (7.4) 
 Finance income                        7         0.2         0.2 
                                          ----------  ---------- 
 
 Profit for the period before 
  income tax                                   163.3       154.8 
 Income tax expense                    8      (30.2)      (29.1) 
                                          ----------  ---------- 
 
 Net Profit for the period                     133.1       125.7 
                                          ----------  ---------- 
 
 
   Attributable to owners 
   of Kingspan Group plc                       132.8       125.4 
 Attributable to non-controlling 
  interests                                      0.3         0.3 
                                          ----------  ---------- 
 
                                               133.1       125.7 
                                          ----------  ---------- 
 
   Earnings per share for 
   the period 
 Basic                                12       74.4c       70.6c 
 
   Diluted                            12       73.6c       69.7c 
 

* Operating costs exclude intangible amortisation and non-trading items

Kingspan Group plc

Condensed consolidated statement of comprehensive income (unaudited)

for the 6 month period ended 30 June 2017

 
                                         6 months   6 months 
                                            ended      ended 
                                          30 June    30 June 
                                             2017       2016 
 
                                             EURm       EURm 
 
 Net profit for financial period            133.1      125.7 
 
   Other comprehensive income: 
 
   Items that may be reclassified 
   subsequently to profit or loss 
 Exchange differences on translating 
  foreign operations                       (54.5)     (57.6) 
 Net changes in fair value of 
  cash flow hedges                          (0.4)        1.1 
 Income taxes relating to changes 
  in fair value of cash flow hedges             -      (0.1) 
 
 
   Total comprehensive income for 
   the period                                78.2       69.1 
                                        ---------  --------- 
 
 Attributable to owners of Kingspan 
  Group plc                                  78.8       69.1 
 Attributable to non-controlling            (0.6)          - 
  interests 
                                        ---------  --------- 
                                             78.2       69.1 
                                        ---------  --------- 
 

Kingspan Group plc

Condensed consolidated statement of financial position

as at 30 June 2017

 
                                                 At 30              At 30            At 31 
                                                  June               June         December 
                                                  2017               2016             2016 
                                           (unaudited) 
                                                              (unaudited)        (audited) 
                                   Note           EURm               EURm             EURm 
 Assets 
 Non-current assets 
 Goodwill                            13          971.1              859.7            990.1 
 Other intangible assets                          91.5               85.7             91.9 
 Property, plant and 
  equipment                          14          674.0              625.0            665.5 
 Derivative financial 
  instruments                        10           31.2               43.2             40.6 
 Retirement benefit assets                         6.4                7.8              6.7 
 Deferred tax assets                              12.0               10.9             12.0 
                                         -------------      -------------      ----------- 
                                               1,786.2            1,632.3          1,806.8 
 Current assets 
 Inventories                                     444.1              322.6            365.5 
 Trade and other receivables                     687.4              592.3            601.9 
 Derivative financial 
  instruments                        10            0.7                2.7              8.4 
 Cash and cash equivalents           10          205.6              166.5            222.0 
                                         -------------      -------------      ----------- 
                                               1,337.8            1,084.1          1,197.8 
                                         -------------      -------------      ----------- 
 Total assets                                  3,124.0            2,716.4          3,004.6 
                                         -------------      -------------      ----------- 
 
 Liabilities 
 Current liabilities 
 Trade and other payables                        686.7              593.5            585.2 
 Provisions for liabilities                       40.7               40.3             55.5 
 Derivative financial 
  instruments                        10            0.1                0.4                - 
 Deferred contingent 
  consideration                                    6.2                6.6              6.8 
 Interest bearing loans 
  and borrowings                     10            1.7              123.5             41.1 
 Current income tax liabilities                   79.0               73.8             77.1 
                                         -------------      -------------      ----------- 
                                                 814.4              838.1            765.7 
 Non-current liabilities 
 Retirement benefit obligations                   21.4               14.9             20.8 
 Provisions for liabilities                       54.4               42.9             45.4 
 Interest bearing loans 
  and borrowings                     10          675.4              434.3            657.3 
 Deferred tax liabilities                         37.5               45.7             37.8 
 Deferred contingent 
  consideration                                   13.3                2.4              6.1 
                                         -------------      -------------      ----------- 
                                                 802.0              540.2            767.4 
                                         -------------      -------------      ----------- 
 Total liabilities                             1,616.4            1,378.3          1,533.1 
                                         -------------      -------------      ----------- 
 
   Net Assets                                  1,507.6            1,338.1          1,471.5 
                                         -------------      -------------      ----------- 
 
   Equity 
 Share capital                                    23.5               23.4             23.4 
 Share premium                                    95.6               93.4             95.6 
 Capital redemption reserve                        0.7                0.7              0.7 
 Treasury shares                                (13.9)             (12.5)           (12.5) 
 Other reserves                                (121.9)             (73.6)           (58.9) 
 Retained earnings                             1,505.9            1,294.2          1,406.6 
                                         -------------      -------------      ----------- 
 
 Equity attributable 
  to owners of Kingspan 
  Group plc                                    1,489.9            1,325.6          1,454.9 
 Non-controlling interests                        17.7               12.5             16.6 
                                         -------------      -------------      ----------- 
 Total Equity                                  1,507.6            1,338.1          1,471.5 
                                         -------------      -------------      ----------- 
 
 
  Kingspan Group plc 
 
   Condensed consolidated statement of changes in equity (unaudited) 
   for the 6 month period ended 30 June 2017 
 
                                                                                        Cash      Share                                                   Total 
                                               Capital                                  flow      based                         Put                attributable           Non- 
                        Share      Share    redemption    Treasury    Translation    hedging    payment    Revaluation       option    Retained       to owners    controlling       Total 
                      capital    premium       reserve      shares        reserve    reserve    reserve        reserve    liability    Earnings          of the      interests      equity 
                                                                                                                            reserve                      parent 
                         EURm       EURm          EURm        EURm           EURm       EURm       EURm           EURm         EURm        EURm            EURm           EURm        EURm 
 
 Balance at 1 
  January 
  2017                   23.4       95.6           0.7      (12.5)         (95.2)        2.3       33.3            0.7            -     1,406.6         1,454.9           16.6     1,471.5 
                    ---------  ---------  ------------  ----------  -------------  ---------  ---------  -------------  -----------  ----------  --------------  -------------  ---------- 
 
 Transactions with owners 
  recognised directly in 
  equity 
 Employee share 
  based 
  compensation            0.1          -             -           -              -          -        6.9              -            -           -             7.0              -         7.0 
 Exercise or 
  lapsing 
  of share options          -          -             -           -              -          -      (8.5)              -            -         8.5               -              -           - 
 Repurchase of 
  shares                    -          -             -       (1.4)              -          -          -              -            -           -           (1.4)              -       (1.4) 
 Dividends                  -          -             -           -              -          -          -              -            -      (42.0)          (42.0)              -      (42.0) 
 Transactions with 
 non-controlling 
 interests: 
 Non-controlling 
  interest 
  arising on 
  acquisition               -          -             -           -              -          -          -              -            -           -               -            1.7         1.7 
 Put option 
  liability 
  arising on 
  acquisition               -          -             -           -              -          -          -              -        (7.4)           -           (7.4)              -       (7.4) 
                    ---------  ---------  ------------  ----------  -------------  ---------  ---------  -------------  -----------  ----------  --------------  -------------  ---------- 
 Transactions with 
  owners                  0.1          -             -       (1.4)              -          -      (1.6)              -        (7.4)      (33.5)          (43.8)            1.7      (42.1) 
                    ---------  ---------  ------------  ----------  -------------  ---------  ---------  -------------  -----------  ----------  --------------  -------------  ---------- 
 
 Total 
 comprehensive 
 income for the 
 period 
 
 Profit for the 
  period                    -          -             -           -              -          -          -              -            -       132.8           132.8            0.3       133.1 
 Other 
 comprehensive 
 income 
 Items that may be reclassified 
  subsequently to profit or 
  loss 
 Cash flow hedging 
  in equity 
 - current year             -          -             -           -              -      (0.4)          -              -            -           -           (0.4)              -       (0.4) 
 Exchange 
  differences 
  on translating 
  foreign 
  operations                -          -             -           -         (53.6)          -          -              -            -           -          (53.6)          (0.9)      (54.5) 
                    ---------  ---------  ------------  ----------  -------------  ---------  ---------  -------------  -----------  ----------  --------------  -------------  ---------- 
 Total 
  comprehensive 
  income for the 
  period                    -          -             -           -         (53.6)      (0.4)          -              -            -       132.8            78.8          (0.6)        78.2 
                    ---------  ---------  ------------  ----------  -------------  ---------  ---------  -------------  -----------  ----------  --------------  -------------  ---------- 
 
   Balance at 30 
   June 
   2017                  23.5       95.6           0.7      (13.9)        (148.8)        1.9       31.7            0.7        (7.4)     1,505.9         1,489.9           17.7     1,507.6 
                    ---------  ---------  ------------  ----------  -------------  ---------  ---------  -------------  -----------  ----------  --------------  -------------  ---------- 
 
 
 
 Kingspan Group plc 
 
  Condensed consolidated statement of changes in equity (unaudited) 
  for the 6 month period ended 30 June 2016 
 
                                                                                       Cash      Share                                      Total 
                                              Capital                                  flow      based                               attributable           Non- 
                       Share      Share    redemption    Treasury    Translation    hedging    payment    Revaluation    Retained       to owners    controlling       Total 
                     capital    premium       reserve      shares        reserve    reserve    reserve        reserve    Earnings          of the      interests      equity 
                                                                                                                                           parent 
                        EURm       EURm          EURm        EURm           EURm       EURm       EURm           EURm        EURm            EURm           EURm        EURm 
 
 Balance at 1 
  January 
  2016                  23.3       92.5           0.7      (11.3)         (50.9)        2.9       29.6            0.7     1,194.9         1,282.4           11.4     1,293.8 
                   ---------  ---------  ------------  ----------  -------------  ---------  ---------  -------------  ----------  --------------  -------------  ---------- 
 
 Transactions with owners 
  recognised directly in 
  equity 
 Employee share 
  based 
  compensation           0.1        0.9             -           -              -          -        6.0              -           -             7.0              -         7.0 
 Exercise or 
  lapsing 
  of share 
  options                  -          -             -           -              -          -      (5.6)              -         5.6               -              -           - 
 Repurchase of 
  shares                   -          -             -       (1.2)              -          -          -              -           -           (1.2)              -       (1.2) 
 Dividends                 -          -             -           -              -          -          -              -      (30.2)          (30.2)              -      (30.2) 
 Transactions 
 with 
 non-controlling 
 interests: 
 Change of 
  ownership 
  interest                 -          -             -           -              -          -          -              -       (1.5)           (1.5)            1.5           - 
 Dividends paid 
  to 
  non-controlling 
  interests                -          -             -           -              -          -          -              -           -               -          (0.4)       (0.4) 
                   ---------  ---------  ------------  ----------  -------------  ---------  ---------  -------------  ----------  --------------  -------------  ---------- 
 Transactions 
  with 
  owners                 0.1        0.9             -       (1.2)              -          -        0.4              -      (26.1)          (25.9)            1.1      (24.8) 
                   ---------  ---------  ------------  ----------  -------------  ---------  ---------  -------------  ----------  --------------  -------------  ---------- 
 
  Total 
  comprehensive 
  income for the 
  period 
 
 Profit for the 
  period                   -          -             -           -              -          -          -              -       125.4           125.4            0.3       125.7 
 Other 
 comprehensive 
 income 
 Items that may be reclassified 
  subsequently to profit or 
  loss 
 Cash flow 
 hedging 
 in equity 
 - current year            -          -             -           -              -        1.1          -              -           -             1.1              -         1.1 
 - tax impact              -          -             -           -              -      (0.1)          -              -           -           (0.1)              -       (0.1) 
 Exchange 
  differences 
  on translating 
  foreign 
  operations               -          -             -           -         (57.3)          -          -              -           -          (57.3)          (0.3)      (57.6) 
                   ---------  ---------  ------------  ----------  -------------  ---------  ---------  -------------  ----------  --------------  -------------  ---------- 
 Total 
  comprehensive 
  income for the 
  period                   -          -             -           -         (57.3)        1.0          -              -       125.4            69.1              -        69.1 
                   ---------  ---------  ------------  ----------  -------------  ---------  ---------  -------------  ----------  --------------  -------------  ---------- 
 
   Balance at 30 
   June 
   2016                 23.4       93.4           0.7      (12.5)        (108.2)        3.9       30.0            0.7     1,294.2         1,325.6           12.5     1,338.1 
                   ---------  ---------  ------------  ----------  -------------  ---------  ---------  -------------  ----------  --------------  -------------  ---------- 
 
 
 
 Kingspan Group plc 
 
  Condensed consolidated statement of changes in equity (audited) 
  for the financial year ended 31 December 2016 
                                                                                            Share                                   Total 
                                             Capital                               Cash     Based                            Attributable          Non- 
                        Share     Share   Redemption   Treasury   Translation      Flow   Payment   Revaluation   Retained      to Owners   Controlling      Total 
                      Capital   Premium      Reserve     Shares       Reserve   Hedging   Reserve       Reserve   Earnings         of the      Interest     Equity 
                                                                                Reserve                                            Parent 
                         EURm      EURm         EURm       EURm          EURm      EURm      EURm          EURm       EURm           EURm          EURm       EURm 
 
   Balance at 1 
    January 
    2016                 23.3      92.5          0.7     (11.3)        (50.9)       2.9      29.6           0.7    1,194.9        1,282.4          11.4    1,293.8 
                     --------  --------  -----------  ---------  ------------  --------  --------  ------------  ---------  -------------  ------------  --------- 
 
    Transactions with owners recognised directly in equity 
 
   Employee share 
    based 
    compensation          0.1       3.1            -          -             -         -      10.4             -          -           13.6             -       13.6 
   Tax on employee 
    share 
    based 
    compensation            -         -            -          -             -         -     (0.3)             -        1.7            1.4             -        1.4 
   Exercise or 
    lapsing 
    of share 
    options                 -         -            -          -             -         -     (6.4)             -        6.4              -             -          - 
   Repurchase of 
    shares                  -         -            -      (1.3)             -         -         -             -          -          (1.3)             -      (1.3) 
   Transfer of 
    shares                  -         -            -        0.1             -         -         -             -          -            0.1             -        0.1 
   Dividends                -         -            -          -             -         -         -             -     (48.0)         (48.0)             -     (48.0) 
   Transactions 
   with 
   non-controlling 
   interests: 
   Arising on 
    acquisition             -         -            -          -             -         -         -             -          -              -           3.5        3.5 
   Change of 
    ownership 
    interest                -         -            -          -             -         -         -             -      (1.5)          (1.5)           1.5          - 
   Dividends paid 
    to 
    non-controlling 
    interest                -         -            -          -             -         -         -             -          -              -         (0.4)      (0.4) 
   Transactions 
    with 
    owners                0.1       3.1            -      (1.2)             -         -       3.7             -     (41.4)         (35.7)           4.6     (31.1) 
                     --------  --------  -----------  ---------  ------------  --------  --------  ------------  ---------  -------------  ------------  --------- 
 
   Total 
   comprehensive 
   income for the 
   year 
   Profit for the 
    year                    -         -            -          -             -         -         -             -      255.4          255.4           0.1      255.5 
 
   Other 
   comprehensive 
   income: 
 
    Items that may be reclassified subsequently to profit or loss 
   Cash flow 
   hedging 
   in equity 
   - current year           -         -            -          -             -     (0.7)         -             -          -      (0.7)                 -      (0.7) 
   - tax impact             -         -            -          -             -       0.1         -             -          -            0.1             -        0.1 
   Exchange 
    differences 
    on translating 
    foreign 
    operations              -         -            -          -        (44.3)         -         -             -          -         (44.3)           0.5     (43.8) 
 
    Items that will not be reclassified subsequently to profit or loss 
   Actuarial losses 
    of defined 
    benefit 
    pension scheme          -         -            -          -             -         -         -             -      (2.9)          (2.9)             -      (2.9) 
   Income taxes 
    relating 
    to actuarial 
    losses 
    on defined 
    benefit 
    pension scheme          -         -            -          -             -         -         -             -        0.6            0.6             -        0.6 
   Total 
    comprehensive 
    income for the 
    year                    -         -            -          -        (44.3)     (0.6)         -             -      253.1          208.2           0.6      208.8 
                     --------  --------  -----------  ---------  ------------  --------  --------  ------------  ---------  -------------  ------------  --------- 
 
    Balance at 31 
    December 
    2016                 23.4      95.6          0.7     (12.5)        (95.2)       2.3      33.3           0.7    1,406.6        1,454.9          16.6    1,471.5 
                     --------  --------  -----------  ---------  ------------  --------  --------  ------------  ---------  -------------  ------------  --------- 
 
 
 
 
   Kingspan Group plc 
 
   Condensed consolidated statement of cash flows 
   (unaudited) 
   for the 6 month period ended 30 June 2017 
                     6 months                    6 months 
                        ended                       ended 
                      30 June                     30 June 
                         2017                        2016 
 
                         EURm                        EURm 
 
 
 Operating activities 
 Net profit for the period            133.1   125.7 
 
 Add back non-operating expenses: 
 Income tax                            30.2    29.1 
 Depreciation of property, 
  plant and equipment                  31.4    29.5 
 Amortisation of intangible 
  assets                                7.5     5.3 
 Impairment of non-current 
  assets                                  -     1.6 
 Non-trading items                    (0.6)       - 
 Employee equity-settled 
  share options                         6.9     6.0 
 Finance income                       (0.2)   (0.2) 
 Finance expense                        7.8     7.4 
 
 
 Profit on sale of property,                (2.0)          - 
  plant and equipment 
 
 Changes in working capital: 
 Increase in inventories                   (87.0)     (28.3) 
 Increase in trade and other 
  receivables                              (95.1)    (116.1) 
 Increase in trade, other 
  payables & provisions                      97.2      118.4 
 
 Other: 
 Pension contributions                      (0.6)      (1.1) 
                                        ---------  --------- 
 
 Cash generated from operations             128.6      177.3 
 Taxes paid                                (32.0)     (20.3) 
 Financing fees paid                        (1.8)          - 
 Interest paid                              (8.2)      (7.7) 
                                        ---------  --------- 
 Net cash flow from operating 
  activities                                 86.6      149.3 
                                        ---------  --------- 
 
   Investing activities 
 Additions to property, plant 
  and equipment                            (44.6)     (54.8) 
 Additions to intangible                    (4.8)          - 
  assets 
 Proceeds from disposals 
  of property, plant and equipment            3.4        2.3 
 Proceeds from disposal of                    5.7          - 
  trade and assets 
 Purchase of subsidiary undertakings 
  (including net debt/cash 
  acquired)                                (14.3)     (80.6) 
 Payment of deferred consideration 
  in respect of acquisitions                    -      (2.8) 
 Interest received                            0.2        0.2 
                                        ---------  --------- 
 Net cash flow from investing 
  activities                               (54.4)    (135.7) 
                                        ---------  --------- 
 
   Financing activities 
 Repayment of interest bearing 
  loans & borrowings                        (8.8)     (12.2) 
 Settlement of derivative                     8.0          - 
  financial instrument 
 Increase in finance lease 
  liability                                   1.5        0.1 
 Proceeds from share issues                   0.1        1.0 
 Repurchase of treasury shares              (1.4)      (1.2) 
 Dividends to non-controlling 
  interests                                     -      (0.4) 
 Dividends paid                            (42.0)     (30.2) 
                                        ---------  --------- 
 Net cash flow from financing 
  activities                               (42.6)     (42.9) 
                                        ---------  --------- 
 
   Decrease in cash and cash 
   equivalents                             (10.4)     (29.3) 
 Translation adjustment                     (6.0)     (16.2) 
 Cash and cash equivalents 
  at the beginning of the 
  period                                    222.0      212.0 
                                        ---------  --------- 
 Cash and cash equivalents 
  at the end of the period                  205.6      166.5 
                                        ---------  --------- 
 
 

Kingspan Group plc

Notes

forming part of the financial statements

   1    Reporting entity 

Kingspan Group plc ("the Company" or "the Group") is a public limited company registered and domiciled in Ireland. The condensed consolidated interim financial statements of the Company as at and for the six month period ended 30 June 2017 comprise the Company and its subsidiaries (together referred to as the "Group").

The Group is primarily involved in the manufacture of high performance insulation and building envelope solutions.

The financial information presented in the half-yearly report does not represent full statutory accounts. Full statutory accounts for the year ended 31 December 2016 prepared in accordance with IFRS, as adopted by the EU, upon which the auditors have given an unqualified audit report, are available on the Group's website (www.kingspan.com).

   2    Basis of preparation 

This Half-Yearly Financial Report is unaudited but has been reviewed by the Company's auditor.

(a) Statement of compliance

These condensed consolidated interim financial statements ("the Interim Financial Statements") have been prepared in accordance with IAS 34 Interim Financial Reporting and do not include all of the information required for full annual financial statements.

The Interim Financial Statements were approved by the Board of Directors on 18 August 2017.

(b) Significant accounting policies

The accounting policies applied by the Group in the Interim Financial Statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2016, with the exception of non-trading items. The Group's accounting policy for non-trading items is as follows:

Non-trading items

Certain items and transactions, by virtue of their nature and significance, are disclosed separately from the main trading activities of the Group to provide the user with a greater understanding of the financial information. These items relate to events or circumstances that are not core to the Group's activities and are therefore presented as "non-trading items".

Non-trading items refers to gains or losses on the disposal of businesses, impairment of goodwill, material gains or losses on the disposal of assets and material acquisition or restructuring costs.

Non-trading items have been disclosed in Note 6 of the Interim Financial Statements.

There are a number of new standards, amendments to standards and interpretations that are not yet effective and have not been applied in preparing these Interim Financial Statements. The principal new standards, amendments to standards and interpretations, none of which have been EU endorsed, are as follows:

 
                                              Effective 
                                         Date - periods 
                                              beginning 
                                            on or after 
 
 IFRS 15: Revenue from contracts with         1 January 
  customers                                        2018 
 IFRS 9 Financial Instruments (2009           1 January 
  and subsequent amendments in 2010                2018 
  and 2013) 
 
 IFRS 16: Leases                              1 January 
                                                   2019 
 

IFRS 15: Revenue from contracts with customers and IFRS 9 Financial Instruments (2009 and subsequent amendments in 2010 and 2013) are not expected to have a material impact on the Group's financial statements.

Management are currently assessing the potential impact of the implementation of IFRS 16: Leases, which may be material to the Group's financial statements, but is currently not quantified.

(c) Estimates

The preparation of Interim Financial Statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.

In preparing the Interim Financial Statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2016.

The Interim Financial Statements are available on the Group's website (www.kingspan.com).

(d) Going concern

The directors have reviewed forecasts and projected cash flows for a period of not less than 12 months from the date of these Interim Financial Statements, and considered its net debt position, available committed banking facilities and other relevant information including the economic conditions currently affecting the building environment generally. On the basis of this review, the directors have concluded that there are no material uncertainties that would cast significant doubt over the Group's ability to continue as a going concern. For this reason, the directors consider it appropriate to adopt the going concern basis in preparing the financial statements.

   3    Reporting currency 

The Interim Financial Statements are presented in euro which is the functional currency of the Company and presentation currency of the Group.

Results and cash flows of foreign subsidiary undertakings have been translated into euro at the average exchange rates for the period, as these approximate the exchange rates at the dates of the transactions. The related assets and liabilities have been translated at the closing rates of exchange ruling at the end of the reporting period.

The following significant exchange rates were applied during the period:

 
                             Average rate                 Closing rate 
                                H1 2016       FY             H1 2016 
                      H1 2017               2016   H1 2017             FY 2016 
    Euro = 
    Pound Sterling      0.860     0.780    0.819     0.879     0.827     0.858 
    US Dollar           1.083     1.117    1.110     1.140     1.113     1.056 
    Canadian 
     Dollar             1.446     1.484    1.466     1.484     1.440     1.425 
    Australian 
     Dollar             1.436     1.521    1.489     1.487     1.495     1.462 
    Czech Koruna       26.783    27.038   27.033    26.294    27.105    27.020 
    Polish Zloty        4.268     4.367    4.362     4.245     4.434     4.422 
    Hungarian 
     Forint            309.50    312.74   311.43    309.95    316.58    311.53 
 
   4    Operating segments 

The Group has the following five reportable segments:

 
 Insulated       Manufacture of insulated panels, structural 
  Panels          framing and metal facades. 
 Insulation      Manufacture of rigid insulation boards, 
  Boards          building services insulation and engineered 
                  timber systems. 
 Light & Air     Manufacture of daylighting, smoke 
                  management and ventilation systems. 
 Environmental   Manufacture of energy storage solutions, 
                  water and microwind systems and all 
                  related service activity. 
 Access Floors   Manufacture of raised access floors 
                  and data centre storage solutions. 
 

The Group has established a new division, Kingspan Light & Air, encompassing the Group's daylighting and ventilation activities effective from 1 January 2017. This activity increased significantly in the second half of 2016 due to a number of acquisitions. In the prior period and as disclosed in the 2016 Annual Report, the Group's limited activity in this sector was disclosed within the Insulated Panels segment and therefore no comparative information is disclosed in the below tables.

 
 Analysis by class 
  of business 
 Segment revenue 
                    Insulated   Insulation                                Access 
                       Panels       Boards     Light     Environmental    Floors     Total 
                         EURm         EURm     & Air              EURm      EURm      EURm 
                                                EURm 
 Total revenue 
  - H1 2017           1,111.7        373.7      81.7              88.9      93.3   1,749.3 
 Total revenue 
  - H1 2016             949.5        347.4         -              79.5      91.7   1,468.1 
 
 
 
 Segment result (profit before finance expense) 
 
 
                       Insulated   Insulation     Light                      Access 
                          Panels       Boards     & Air     Environmental    Floors     Total 
                            EURm         EURm      EURm              EURm      EURm      EURm 
 
   Trading profit 
   - H1 2017               116.9         40.0       3.0               6.7      11.2     177.8 
 Intangible 
  amortisation             (4.6)        (1.1)     (1.1)             (0.7)         -     (7.5) 
 Non-trading 
  items                    (2.3)          2.9         -                 -         -       0.6 
                      ----------  -----------  --------  ----------------  --------  -------- 
 
   Operating result 
   - H1 2017               110.0         41.8       1.9               6.0      11.2     170.9 
                      ----------  -----------  --------  ----------------  -------- 
 
   Net finance 
   expense                                                                              (7.6) 
                                                                                     -------- 
 Profit for the period before income 
  tax                                                                                   163.3 
 Income tax 
  expense                                                                              (30.2) 
                                                                                     -------- 
 
   Profit for 
   the period 
   - H1 2017                                                                            133.1 
                                                                                     -------- 
 
 
 Segment result (profit before finance expense) 
 
 
                       Insulated   Insulation     Light                      Access 
                          Panels       Boards     & Air     Environmental    Floors     Total 
                            EURm         EURm      EURm              EURm      EURm      EURm 
 
   Trading profit 
   - H1 2016               112.0         39.9         -               4.2      11.2     167.3 
 Intangible 
  amortisation             (3.5)        (1.6)         -             (0.2)         -     (5.3) 
                      ----------  -----------  --------  ----------------  --------  -------- 
 
   Operating result 
   - H1 2016               108.5         38.3         -               4.0      11.2     162.0 
                      ----------  -----------  --------  ----------------  -------- 
 
   Net finance 
   expense                                                                              (7.2) 
                                                                                     -------- 
 Profit for the period before income 
  tax                                                                                   154.8 
 Income tax 
  expense                                                                              (29.1) 
                                                                                     -------- 
 
   Profit for 
   the period 
   - H1 2016                                                                            125.7 
                                                                                     -------- 
 
 
 Segment assets and liabilities 
                                                                                                 Total       Total 
                                                                                                    30          30 
                           Insulated     Insulation     Light                       Access        June        June 
                              Panels         Boards     & Air     Environmental     Floors        2017        2016 
                                EURm           EURm      EURm              EURm       EURm        EURm        EURm 
 Assets - H1 2017            1,765.4          629.8     153.6             168.7      157.0     2,874.5 
 Assets - H1 2016            1,580.7          592.8         -             165.7      153.9                 2,493.1 
 Derivative financial 
  instruments                                                                                     31.9        45.9 
 Cash and cash 
  equivalents                                                                                    205.6       166.5 
 Deferred tax 
  asset                                                                                           12.0        10.9 
                                                                                            ----------  ---------- 
 Total assets                                                                                  3,124.0     2,716.4 
                                                                                            ----------  ---------- 
 
 Liabilities - 
  H1 2017                    (529.9)        (160.8)    (46.5)            (51.9)     (33.6)     (822.7) 
 Liabilities - 
  H1 2016                    (471.0)        (156.2)         -            (46.6)     (26.8)                 (700.6) 
 
 Interest bearing loans and 
  borrowings (current and non-current)                                                         (677.1)     (557.8) 
 Derivative financial instruments 
  (current and non-current)                                                                      (0.1)       (0.4) 
 Income tax liabilities (current 
  and deferred)                                                                                (116.5)     (119.5) 
                                                                                            ----------  ---------- 
 Total liabilities                                                                           (1,616.4)   (1,378.3) 
                                                                                            ----------  ---------- 
 
 
 
 Other segment information 
 
                      Insulated   Insulation                  Light                      Access 
                         Panels       Boards                  & Air     Environmental    Floors      Total 
                           EURm         EURm                   EURm              EURm      EURm       EURm 
 
   Capital 
   Investment 
   - H1 2017 *             40.8         16.0                    1.8               1.7       2.2       62.5 
 Capital Investment 
  - H1 2016 *              42.3         18.7                      -               9.0       2.5       72.5 
 
 Depreciation 
  included 
  in segment result 
  - H1 2017              (20.2)        (7.1)                  (1.4)             (1.5)     (1.2)     (31.4) 
 Depreciation 
  included 
  in segment result 
  - H1 2016              (19.2)        (7.4)                      -             (1.7)     (1.2)     (29.5) 
 
 Non cash items 
  included in 
  segment 
  result - H1 2017        (4.2)        (1.5)                  (0.1)             (0.5)     (0.6)      (6.9) 
 Non cash items 
  included in 
  segment 
  result -H1 2016         (3.6)        (1.4)                      -             (0.4)     (0.6)      (6.0) 
 
 * Capital investment includes the fair value of property, 
  plant, equipment and intangible assets acquired through 
  additions in the period and also as part of business 
  comibinations. 
 
 Analysis of segmental data 
  by geography 
                       Republic                   Rest 
                             of       United        of 
                        Ireland      Kingdom    Europe     Americas            Others     Total 
                           EURm         EURm      EURm         EURm              EURm      EURm 
 Income Statement 
  Items 
 Revenue - H1 2017         66.2        455.4     759.1        336.4             132.2   1,749.3 
 Revenue - H1 2016         59.5        410.1     592.3        291.4             114.8   1,468.1 
 
 
   Statement of Financial Position Items 
 Non-current assets 
  - H1 2017 *              52.2        371.1     731.5        423.0             165.2   1,743.0 
 Non-current assets 
  - H1 2016 *              49.0        363.0     627.3        389.0             149.9   1,578.2 
 
 Capital Investment 
  - H1 2017 **              6.1          8.3      25.8         15.9               6.4      62.5 
 Capital Investment 
  - H1 2016 **              2.1         20.1      16.5         11.5              22.3      72.5 
 
 * Total non-current assets excluding derivative 
  financial instruments and deferred tax assets. 
 
 **                Capital investment includes the fair value of 
                    property, plant, equipment and intangible assets 
                    acquired through additions in the period and 
                    also as part of business comibinations. 
 
 

In presenting information on the basis of geographic segments, segment revenue is based on the geographic location of customers. Segment assets are based on the geographic location of the assets.

   5    Seasonality of operations 

Activity in the global construction industry is characterised by cyclicality and is dependent to a significant extent on the seasonal impact of weather in some of the Group's operating locations. Activity is second half weighted and is likely to be more pronounced in the future due to the activity profile of recent acquisitions.

   6    Non-trading items 
 
                                 6 months     6 months 
                                    ended        ended 
                                  30 June      30 June 
                                     2017         2016 
                                     EURm         EURm 
 
 Profit on disposal of trade          2.9            - 
  and assets 
 Impairment of goodwill             (2.3)            - 
 
                                      0.6            - 
                                ---------    --------- 
 

During the period, the Group disposed of the trade and assets of Kingspan Gefinex GmbH, which is part of the Insulation Boards division, for EUR5.7m and realised a non-trading profit of EUR2.9m.

The goodwill impairment relates to a US energy business, which is part of the Panels division.

There is no tax impact for the above items in the Condensed Consolidated Income Statement.

   7    Finance expense and finance income 
 
                                       6 months   6 months 
                                          ended      ended 
                                        30 June    30 June 
                                           2017       2016 
                                           EURm       EURm 
 Finance expense 
 Bank loans                                 0.9        1.1 
 Private placement                          7.2        6.0 
 Finance leases                             0.1          - 
 Defined benefit pension 
  scheme, net                               0.1        0.1 
 Fair value movement on derivative 
  financial instruments                     8.0     (20.5) 
 Fair value movement on private 
  placement debt                          (8.5)       20.7 
                                      ---------  --------- 
                                            7.8        7.4 
 Finance income 
 Interest earned                          (0.2)      (0.2) 
 
   Net finance cost                         7.6        7.2 
                                      ---------  --------- 
 

No borrowing costs were capitalised during the period (H1 2016: Nil).

   8    Taxation 

Taxation provided for on profits is EUR30.2m which represents 18.5% of the profit before tax for the period (H1 2016: 18.8%). The full year effective tax rate in 2016 was 18.6%. The taxation charge for the six month period is accrued using the estimated applicable rate for the year as a whole.

   9    Analysis of net debt 
 
                                             At          At 
                                        30 June     30 June 
                                           2017        2016 
                                           EURm        EURm 
 
 Cash and cash equivalents                205.6       166.5 
 Derivative financial instruments          31.2        43.2 
 Current borrowings                       (1.7)     (123.5) 
 Non-current borrowings                 (675.4)     (434.3) 
 
   Total net debt                       (440.3)     (348.1) 
                                     ----------  ---------- 
 

Net debt, which is a non GAAP measure, is stated net of interest rate and currency hedges (asset of EUR31.2m) which relate to hedges of debt. Foreign currency derivatives (liability of EUR0.6m), which are used for transactional hedging, are not included in the definition of net debt.

10 Financial instruments

The following table outlines the components of net debt by category:

 
                                      Loans &     Liabilities 
                                  Receivables            in a     Derivatives 
                                      & Other            fair      Designated           Total 
                                    Financial           value      as Hedging             Net 
                         Assets/(Liabilities)           hedge     Instruments            Debt 
                                 at Amortised    relationship            EURm     by Category 
                                         Cost            EURm                            EURm 
                                         EURm 
 Assets: 
 Interest rate swaps                        -               -            31.2            31.2 
 Cash at bank and 
  in hand                               205.6               -               -           205.6 
                       ----------------------  --------------  --------------  -------------- 
 Total assets                           205.6               -            31.2           236.8 
                       ----------------------  --------------  --------------  -------------- 
 
   Liabilities: 
 Private placement 
  notes                               (523.8)         (142.6)               -         (666.4) 
 Other loans                           (10.7)               -               -          (10.7) 
                       ----------------------  --------------  --------------  -------------- 
 Total liabilities                    (534.5)         (142.6)               -         (677.1) 
                       ----------------------  --------------  --------------  -------------- 
 
   At 30 June 2017                    (328.9)         (142.6)            31.2         (440.3) 
                       ----------------------  --------------  --------------  -------------- 
 
 
                                      Loans &     Liabilities 
                                  Receivables            in a     Derivatives 
                                      & Other            fair      Designated           Total 
                                    Financial           value      as Hedging             Net 
                         Assets/(Liabilities)           hedge     Instruments            Debt 
                                 at Amortised    relationship            EURm     by Category 
                                         Cost            EURm                            EURm 
                                         EURm 
 Assets: 
 Interest rate swaps                        -               -            43.2            43.2 
 Cash at bank and 
  in hand                               166.5               -               -           166.5 
                       ----------------------  --------------  --------------  -------------- 
 Total assets                           166.5               -            43.2           209.7 
                       ----------------------  --------------  --------------  -------------- 
 
   Liabilities: 
 Private placement 
  notes                               (312.5)         (153.7)               -         (466.2) 
 Other loans                           (91.6)               -               -          (91.6) 
                       ----------------------  --------------  --------------  -------------- 
 Total liabilities                    (404.1)         (153.7)               -         (557.8) 
                       ----------------------  --------------  --------------  -------------- 
 
   At 30 June 2016                    (237.6)         (153.7)            43.2         (348.1) 
                       ----------------------  --------------  --------------  -------------- 
 

The Group's private placement loan notes of EUR666m have a weighted average maturity of 6.5 years.

Fair value of financial instruments carried at fair value

Financial instruments recognised at fair value are analysed between those based on quoted prices in active markets for identical assets or liabilities (Level 1), those involving inputs other than quoted prices that are observable for the assets or liabilities, either directly or indirectly (Level 2); and those involving inputs for the assets or liabilities that are not based on observable market data (Level 3).

The following table sets out the fair value of all financial instruments whose carrying value is at fair value:

 
                                           Level      Level      Level 
                                               1          2          3 
                                         30 June    30 June    30 June 
                                            2017       2017       2017 
                                            EURm       EURm       EURm 
 Financial assets 
  Interest rate swaps                          -       31.2          - 
  Foreign exchange contracts 
   for hedging                                 -        0.7          - 
 
  Financial liabilities 
  Deferred contingent consideration            -          -     (19.5) 
  Foreign exchange contracts 
   for hedging                                 -      (0.1)          - 
                                      ----------  ---------  --------- 
 
   At 30 June 2017                             -       31.8     (19.5) 
                                      ----------  ---------  --------- 
 
 
                                           Level      Level      Level 
                                               1          2          3 
                                         30 June    30 June    30 June 
                                            2016       2016       2016 
                                            EURm       EURm       EURm 
 Financial assets 
  Interest rate swaps                          -       43.2          - 
  Foreign exchange contracts 
   for hedging                                 -        2.7          - 
 
  Financial liabilities 
  Deferred contingent consideration            -          -      (9.0) 
  Interest rate swaps                          -      (0.4)          - 
  Foreign exchange contracts 
   for hedging                                 -          -          - 
                                      ----------  ---------  --------- 
 
   At 30 June 2016                             -       45.5      (9.0) 
                                      ----------  ---------  --------- 
 

All derivatives entered into by the Group are included in Level 2 and consist of foreign currency forward contracts, interest rate swaps and cross currency interest rate swaps.

Where derivatives are traded either on exchanges or liquid over-the-counter markets, the Group uses the closing price at the reporting date. Normally, the derivatives entered into by the Group are not traded in active markets. The fair values of these contracts are estimated using a valuation technique that maximises the use of observable market inputs, e.g. market exchange and interest rates.

Deferred contingent consideration is included in Level 3. The deferred contingent consideration has increased in the period due to the PanelMet acquisition, which is outlined in more detail in Note 16. The remaining deferred contingent consideration is consistent with 31 December 2016 and is set out in notes 18 and 22 of the 2016 Annual Report. The contingent element is measured on a series of trading performance targets, and is adjusted by the application of a range of outcomes and associated probabilities.

During the period ended 30 June 2017, there were no significant changes in the business or economic circumstances that affect the fair value of financial assets and liabilities, no reclassifications and no transfers between levels of the fair value hierarchy used in measuring the fair value of the financial instruments.

Fair value of financial instruments at amortised cost

Except as detailed below, it is considered that the carrying amounts of financial assets and financial liabilities recognised at amortised cost in the Interim Financial Statements approximate their fair values.

 
 Private placement notes    Carrying amount   Fair value 
                                       EURm         EURm 
 At 30 June 2017                      666.4        705.6 
 At 30 June 2016                      466.2        507.1 
 

The fair value of the private placement notes, which are Level 2 financial instruments, is derived by using observable market data, principally the relevant interest rates.

11 Dividends

A final dividend on ordinary shares of 23.5 cent per share in respect of the year ended 31 December 2016 (2015: 17.0 cent) was paid on 5 May 2017.

The directors are proposing an interim dividend of 11.0 cent (2016: 10.0 cent) per share in respect of 2017, which will be paid on 6 October 2017 to shareholders on the register on the record date of 1 September 2017.

12 Earnings per share

 
                                          6 months     6 months 
                                             ended        ended 
                                           30 June      30 June 
                                              2017         2016 
                                              EURm         EURm 
 The calculations of earnings 
  per share are based on 
  the following: 
 Profit attributable to 
  owners of the Company                      132.8        125.4 
                                       -----------  ----------- 
 
                                            Number       Number 
                                                of           of 
                                            shares       shares 
                                            ('000)       ('000) 
                                          6 months     6 months 
                                             ended        ended 
                                           30 June      30 June 
                                              2017         2016 
 Weighted average number 
  of ordinary shares for 
  the calculation of basic 
  earnings per share                       178,570      177,523 
 Dilutive effect of share 
  options                                    1,754        2,226 
                                       -----------  ----------- 
 Weighted average number 
  of ordinary shares 
  for the calculation of 
  diluted earnings per share               180,324      179,749 
                                       -----------  ----------- 
 
 
                                          EUR cent     EUR cent 
 
   Basic earnings per share                   74.4         70.6 
 
   Diluted earnings per share                 73.6         69.7 
 
   Adjusted basic (pre amortisation 
   and non-trading items) 
   earnings per share                         77.5         73.1 
 

At 30 June 2017, there were no anti-dilutive options (30 June 2016: Nil).

13 Goodwill

 
                                    At         At           At 
                               30 June    30 June       31 Dec 
                                  2017       2016         2016 
 
                                  EURm       EURm         EURm 
 
 At beginning of period          990.1      821.2        821.2 
 Acquired through business 
  combinations                    11.7       55.3        178.7 
 Impairment charge               (2.3)          -            - 
 Effect of movement 
  in exchange rates             (28.4)     (16.8)        (9.8) 
                             ---------  ---------  ----------- 
 At end of period                971.1      859.7        990.1 
                             ---------  ---------  ----------- 
 
 At end of period 
 Cost                          1,039.0      925.3      1,055.7 
 Accumulated impairment 
  losses                        (67.9)     (65.6)       (65.6) 
 
 Net carrying amount             971.1      859.7        990.1 
                             ---------  ---------  ----------- 
 

14 Property, plant & equipment

 
 
                                     At          At             At 
                                30 June     30 June         31 Dec 
                                   2017        2016           2016 
                                   EURm        EURm           EURm 
 
   Cost or valuation            1,523.5     1,441.9        1,505.2 
 Accumulated depreciation 
  and impairment charges        (849.5)     (816.9)        (839.7) 
                             ----------  ----------  ------------- 
 Net carrying amount              674.0       625.0          665.5 
                             ----------  ----------  ------------- 
 
 Opening net carrying 
  amount                          665.5       619.1          619.1 
 Acquired through business 
  combinations                      7.9         5.0           30.9 
 Additions                         45.3        54.8          113.7 
 Disposals                        (1.9)       (2.3)          (8.8) 
 Depreciation charge             (31.4)      (29.5)         (63.2) 
 Impairment charge                    -       (1.6)          (3.4) 
 Effect of movement 
  in exchange rates              (11.4)      (20.5)         (22.8) 
 
 Closing net carrying 
  amount                          674.0       625.0          665.5 
                             ----------  ----------  ------------- 
 

The disposals, excluding the Gefinex element, generated a profit in the period of EUR2.0m (H1 2016: EUR nil).

15 Reconciliation of net cash flow to movement in net debt

 
                                      6 months    6 months           Year 
                                         ended       ended          ended 
                                       30 June     30 June    31 December 
                                          2017        2016           2016 
                                          EURm        EURm           EURm 
 
 (Decrease)/increase in 
  cash and bank overdrafts              (10.4)      (29.3)           28.1 
 Decrease/(increase) in 
  interest bearing loans 
  & borrowings                             8.8        12.2        (120.6) 
 Settlement of derivative                (8.0)           -              - 
  financial instrument 
 Increase in lease finance               (1.5)       (0.1)          (1.8) 
                                    ----------  ----------  ------------- 
 
   Change in net debt resulting 
   from cash flows                      (11.1)      (17.2)         (94.3) 
 Translation movement - 
  relating to US dollar 
  loans                                   14.9       (0.6)          (5.6) 
 Translation movement - 
  other                                  (6.8)      (15.9)         (19.0) 
 Derivative financial instruments 
  movement                               (9.4)        13.6           19.0 
                                    ----------  ----------  ------------- 
 
   Net movement                         (12.4)      (20.1)         (99.9) 
 
   Net debt at start of the 
   period                              (427.9)     (328.0)        (328.0) 
                                    ----------  ----------  ------------- 
 
   Net debt at end of the 
   period                              (440.3)     (348.1)        (427.9) 
                                    ----------  ----------  ------------- 
 

16 Business combinations

During the period, the Group made three acquisitions for a combined total consideration of EUR14.3m:

-- In March 2017, the purchase of 100% of the share capital of Rhino Water Tanks and Liners Pty, an Australian water tanks business;

-- In April 2017, the purchase of 51% of the share capital of PanelMet S.A.S., a Colombian panels manufacturer and supplier; and

-- In June 2017, the purchase of 100% of the share capital of Schütze GmbH, a German Light & Air business.

The provisional fair values of the acquired assets and liabilities in respect of these acquisitions at their respective acquisition dates, along with fair value adjustments to a number of 2016 acquisitions, are set out below:

 
 
                                      EUR'm 
 Non-current assets 
 Intangible assets                      4.5 
 Property, plant and equipment          7.9 
 Deferred tax assets                    1.1 
 
   Current assets 
 Inventories                            1.4 
 Trade and other receivables            3.7 
 
   Current liabilities 
 Trade and other payables            (12.4) 
 Provisions for liabilities           (0.7) 
 
 Non-current liabilities 
 Retirement benefit obligations       (0.3) 
 Deferred tax liabilities             (0.9) 
                                    ------- 
 
 Total identifiable assets              4.3 
 
 Non-controlling interest             (1.7) 
 Goodwill                              11.7 
                                    ------- 
 
   Total consideration                 14.3 
                                    ------- 
 
   Satisfied by: 
 Cash (net of cash/debt acquired)      14.3 
 Total consideration                   14.3 
                                    ------- 
 

The goodwill is attributable principally to the profit generating potential of the business, together with a strong workforce, new geographies and synergies expected to be achieved from integrating the business into Kingspan's existing structure.

In addition to the above consideration, there is a put option to acquire the non-controlling interest of PanelMet S.A.S. This option has been valued at EUR7.4m, which is based on a multiple of EBITDA, and reflects its present value.

In the post-acquisition period to 30 June 2017, the businesses acquired in the current period contributed total revenue of EUR5.0m and trading profit of EUR0.4m to the Group's results.

17 Capital and reserves

Issues of ordinary shares

949,558 ordinary shares (H1 2016: 767,589) were issued as a result of the exercise of vested options arising from the Group's share option schemes (see the 2016 Annual Report for full details of the Group's share option schemes). Options were exercised at an average price of EUR0.13 per option.

18 Significant events and transactions

There were no individually significant events or transactions in the period which contributed to the material changes in the Statement of Financial Position; the more significant movements are described below:

-- the changes in Inventories, Trade & other receivables and Trade & other payables reflect the normal business cycle;

-- the fair value of derivatives moved primarily as a result of the settlement of a derivative financial instrument and the movements in the US dollar exchange rate against both sterling and the euro; and

-- the negative currency translation movement of EUR54.5m reflected in the Condensed Consolidated Statement of Comprehensive Income reflects primarily the relative weakening of sterling year on year.

19 Related party transactions

There were no changes in related party transactions from the 2016 Annual Report that could have a material effect on the financial position or performance of the Group in the first half of the year.

20 Subsequent events

There have been no material events subsequent to 30 June 2017 which would require disclosure in this report.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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