Shares in Kingspan closed nearly 3 per cent higher yesterday as the company said it expects to beat market expectations this year.

The building materials group said that its first-half performance had been well ahead of the same period in 2004 in generally stable construction markets.

"The combination of good underlying growth coupled with the contribution from acquisitions provides a strong platform for continued good growth," chief executive Gene Murtagh said. Shares in the group added 29 cent to close at €10.65 yesterday, having briefly touched €10.73, as analysts set about upgrading their forecasts.

Davy Stockbrokers has increased its 2005 earnings per share (EPS) forecast by 6.5 per cent to 61.5 cent, while NCB Stockbrokers is pencilling in EPS of 62.6 cent this year, a 7.5 per cent increase on its previous forecast.

The company said that revenue growth continued to be strong during the first half of the year, despite a slower-than-expected start to the year in central and eastern Europe.

Recent acquisitions, including the purchase in March of Century Homes and the May acquisition of British panel manufacturer ATC, are trading in line with expectations while the improving trend in margins has continued.

The company is upbeat about the outlook, with building markets likely to remain stable while it also expects an easing of the recent upward pressure on its raw material costs.

Kingspan expects sales to grow by around 30 per cent this year to €1.25 billion, including a €140 million contribution from acquisitions. In 2006, it anticipates sales growth of around 10 per cent and an operating margin in the region of 11 per cent, consistent with 2005.

Kingspan has also restated its 2004 results to conform with new international financial reporting standards (IFRS). There was little material change to the figures as earnings per share before goodwill rose to 47.1 cent from 47 cent as a result of the changes, while shareholders' funds increased by just 0.8 per cent.