Kingspan has announced the extension of its €300m revolving credit facility.
The maturity of the facility has been extended by two years to March 2019 and on more favourable pricing terms (which are not disclosed).
The extension augments Kingspan’s already extremely healthy financial position. Net debt at end-2013 stood at just €108m, the lowest since 1999. Net debt/EBITDA was under 0.7x.
Kingspan therefore has clear capacity for any investment projects it may seek to undertake. We expect the group will look to consolidate markets it already operates in as well as seeking opportunities in new territories. Kingspan has successfully done deals of reasonable significance in 2008, 2010 and 2012. If the right deals at the right price can be found, expect further activity this year.
“One of the many appealing traits of Kingspan is the optionality its financial position offers. Net debt/EBITDA at end-2013 was below 0.7x and, as it is currently configured, the group is trending towards net cash. Kingspan is a growth business and is likely to seek to deploy its resources in expanding its operations. Consolidation of existing markets is one target; another is expansion into new territories,” according to Davy Research this morning.
Kingspan has also issued its 2013 Annual Report. From a financial perspective, we would note the following: the group’s cost of debt was 4.12% (unchanged); of its near-€300m in gross debt, 39% was floating; and 29% was in sterling; 49% in euros; and 22% in US dollars.