Kingspan cuts pay to staff for two months

Cavan-headquartered insulation and building product manufacturer Kingspan has announced it is to cut all staff pay for two months.

The move, which has been reported widely this afternoon, is being made in response to the global downturn following the Coronavirus outbreak.

It’s understood the decision was revealed to staff in a letter from company CEO Gene Murtagh.

It says that the company is implementing a 40% cut in pay for April and May. This cut is being made without exception.

Everyone on the executive team meanwhile is set to have their salaries cut by 50% over the same period. Kingspan is also withdrawing a proposal to pay a final dividend of 33.5 cent to shareholders for last year.

Furthermore all spending that is not critical to the ongoing running of the Kingscourt-based business has also been frozen.

"I know this is an extreme measure, but I also know that it is absolutely critical to protect as many jobs as possible," wrote Mr Murtagh, explaining that there had been unprecedented disruption caused by the outbreak in both production and customer demand.

The cuts might not however end there.

”Will two months be sufficient? We simply don't know at this point, but it seems in line with government guidance and we will review again after that time period,” added Mr Murtagh in the statement.

"Some of you may not have begun to experience the full impact of this crisis yet, but it is unfolding rapidly, and I ask you to do this in solidarity with your colleagues in sister factories across the world who are being severely impacted today," he said.

"I am asking this of each of you because my greatest concern now is to safeguard the future of as many jobs as possible."

He went on to explain also the decision to withdraw the dividend proposal was because since last months results, global trading has changed significantly due the spread of Covid-19.

A month ago Kingspan reported a 13% rise in profit after tax for 2019.

The building materials group had a profit of €377.8m last year - following a 7% rise in revenues to almost €4.66 billion

A trading update will be issued on April 30 in advance of the AGM.