Insulation and building materials group Kingspan predicts profits this year will grow by close to €40 million following a strong performance in the first six months.

In an interim trading statement issued yesterday, the Cavan-based group said the first half of 2007 had been strong and that this momentum would continue in the short term. "In the absence of any unforeseen circumstances the group is confident, given the strong performance in the first six months of the current year, that operating profits for the year as a whole should grow in the region of 20 per cent over the figure of €94 million in 2006," the statement said.

Kingspan expects to invest €120 million both this year and in 2008 in speeding up the group development, the statement said.

Sales of its insulated panels in Ireland, the UK, and western and central Europe were well ahead of the same period in 2006.

"Insulation sales have been strong in the UK and steady in Ireland where housing construction has moderated," it said. "Despite this moderation, offsite sales in Ireland remained quite robust in the early part of the year but clearly any slowdown in housing output would impact sales and margins in this division.

"Measures taken by Kingspan to consolidate the UK offsite market are underway and have resulted in significantly increased sales in the first six months of the year, although margins will remain low while the integration process continues."

The group added that its environmental division, which sells fuel storage products and water treatment systems, was experiencing tough trading conditions.