DAVY VIEW

The BMC acquisition ticks all the right boxes for Kingspan. It is a fast growing, complementary business; it will double the group’s potential addressable market share in the rapidly growing data centre market; it is materially earnings accretive and returns enhancing; and, while it is the group’s biggest acquisition to date, it will be undertaken without impacting Kingspan’s financial wellbeing. Our forecasts are under review, but even off what will be a higher base it appears that Kingspan is positioned to deliver earnings growth of over 25% in 2027. We suspect diluted adjusted EPS approaching €6 next year is becoming a possibility. The Kingspan share price justifiably reacted very positively to the recent interim results, but the BMC deal should help the stock to kick on further.