Kingspan, the Cavan-based builders' products group, has reported further strong growth in the first six months of the year, with a 21 per cent increase in pre-tax profits to #27.7 million (£21.8 million).

The results were boosted by three acquisitions made in 1998 and two acquisitions made in January this year, including a five-month contribution from Hewet son, the publicly-quoted British floor products group acquired in January.

The company said Hewetson had been well assimilated into the group and was performing ahead of expectations at the time of acquisition. "Opportunities have been identified to increase both the product range and geographic spread of Hewetson and we expect this will lead to continuing growth in these areas," Kingspan said.

Overall, turnover in the group in the six months to June 30th was up 39 per cent to #242 million (£190.6 million) with Britain and Northern Ireland accounting for 68 per cent of sales, the Republic for 15.5 per cent and mainland Europe for 13 per cent.

Gross margins were up slightly, at 31.2 per cent from 31.1 per cent in the first half of 1998, despite reduced selling prices.

Kingspan said it had enjoyed particularly strong volume growth in its composite panel business where sales volumes rose by 17 per cent while sales value increased by 12 per cent. "This volume growth continues to outstrip the growth experienced by the relevant construction sector in all the group's market places," Kingspan said.

As this rate of growth in volumes looks set to continue, Kingspan expects to invest in further capacity by mid-2000.

Kingspan said the economic environment continued to be favourable and order levels remained strong in all its markets. The company would continue to seek acquisitions, executive chairman, Mr Eugene Murtagh said. With net gearing at 76 per cent, it was in a position to spend up to #100 million.

Earnings per share rose by 20 per cent to 12.5 cents while the company announced a 48 per cent increase in its interim dividend to 0.93 cents in line with its policy of bringing its dividend yield and cover closer to the industry average over the next three years.

The company also said the direct cost of addressing the Year 2000 issue was not material to the group, especially as many of the non-compliant systems identified were due to be replaced or upgraded for reasons unconnected with Y2K.