Fed up with Kingspan shares drifting behind peers and the wider market, Gene Murtagh is seeking to tap into some of the energy of the Magnificent Seven (Mag-7), the US tech stocks that have driven a three-year bull run across global equity markets.

The Kingspan chief executive revealed on Tuesday that the insulation giant founded 60 years ago by his father, Eugene, plans to float 25 per cent of its advanced building systems unit Advnsys, which is focused on supplying the global data centres boom, in Amsterdam.

The mushrooming of data centres has been turbocharged by the artificial intelligence (AI) revolution that has driven the share prices in recent times of Mag-7 stalwarts such as chipmaker Nvidia, Microsoft, Google-parent Alphabet and Meta, owner of Facebook and Instagram.

Close to $7 trillion (€6 trillion) will need to be spent on data centres globally by 2030, driven by demand for hubs equipped to handle AI processing loads, McKinsey, the management consultancy firm, estimated in a recent report.

“We’re acutely cognisant of the fact that relevant sector peers – and these are not building sector peers, they’re tech-end peers that are supplying the data centre market – are trading at and above 20 times Ebitda,” Murtagh said on a call with analysts, referring to how others in the data centre space are being valued by the stock market at more than 20 times earnings before interest, tax, depreciation and amortisation. Valuing Advnsys along these lines would give it an initial market capitalisation of at least €6 billion.

[ Kingspan shares soar on potential €6bn flotation of unit riding data centres boomOpens in new window ]

Kingspan had lost more than a third of its market value in the four years before the move was announced – and was down 21 per cent on the year as it grappled with what Murtagh recently described as an ongoing “pretty unforgiving environment” for construction suppliers globally as households and businesses fret about a potential recession. The group is trading at about 10 times Ebitda – compared with its 10-year average of 13.5.

Compare that with Vertiv, an Ohio-based provider of critical infrastructure and services for data centres, whose stock has soared more than 400 per cent over the past four years.

Or with Trane Technologies, the Swords-headquartered but New York-listed maker of heating and cooling systems for commercial buildings, whose market value has more than doubled in the same period, to $90 billion, amid a surge in demand for its data centre air-cooling systems.

The AI boom – like red-hot stock market trends before it – has attracted blatantly cynical pivots and rebrands from companies trying to jump on the bandwagon.

But Kingspan has been a supplier to the data centres market since before Murtagh became CEO 20 years ago. The new Advnsys unit being lined up for an initial public offering (IPO) – which combines its data centre solutions and light, air and water businesses into one – is a world leader in bespoke critical infrastructure primarily focused on data centres, ventilation and daylighting.

[ Kingspan trades profit for position in US roofing raceOpens in new window ]

While about 40 per cent of Advnsys’s earnings currently come from providing infrastructure to the tech sector, particularly to data centres, this is expected to grow to about 75 per cent of an even bigger business in the next three to five years, according to the group.

Citigroup analysts reckon the subsidiary could more than double its revenue and Ebitda between 2024 and 2030, to €3.2 billion and €525 million, respectively.

Shares in Kingspan jumped as much as 13.5 per cent to €74.85 on Tuesday morning, but have since handed back almost half their gains as some analysts urged caution.

“While we understand the [market] reaction, particularly in light of the stock’s weaker performance year-to-date, we do not yet understand how a partial IPO creates additional value, nor how the market will arbitrage valuation between the two businesses,” said JP Morgan analysts led by Elodie Rall in a note to clients.

Advnsys may attract a higher valuation multiple, but this is likely to be offset by the market giving the rest of the business – comprising insulated panels, other insulation solutions and its roofing and waterproofing unit – a lower one, she said.

[ Kingspan plans €650m share buy back as half year revenues rise 8% to record €4.5bnOpens in new window ]

Bernstein’s Pujarini Ghosh said the market excitement earlier in the week had been “overdone” and her €70 price target on the group points to almost 3 per cent downside from here. A listing of Advnsys in New York “could potentially have helped unlock greater value given the business mix will be more heavily skewed to the US”, she said.

About 45 per cent of the unit’s business is exposed to the US, but this is expected to rise well above 50 per cent in the coming years.

Murtagh said the decision to float on Euronext Amsterdam is down to the high level of trading in stocks in that market, a lack of stamp duty there, too, and how the same accounting standard (IFRS) applies to companies in the Netherlands and Ireland.

For sure, the level of trading in Euronext Dublin has slumped over the past five years amid a number of company exits and a dearth of fresh IPOs.

[ How Kingspan stands to benefit from AI boomOpens in new window ]

But to avoid the 1 per cent stamp duty applied to share trading in Irish companies, Kingspan will need to incorporate Advnsys as a public limited company – or naamloze vennootschap (NV) – in the Netherlands.

A nice bonus from the planned IPO is that it would, according to Murtagh. leave both Kingspan and Advnsys “essentially with zero debt” – giving them plenty of scope to invest and grow by acquisition.

Whereas Kingspan’s share price tends to move with the broader construction industry cycle, Advnsys’s stock will be far more sensitive to developments in AI, making it potentially much more volatile.

Chinese tech group DeepSeek, for example, showed the world earlier this year that its approach to generative AI needs just a fraction of the computing power of more prominent US tools, such as ChatGPT. Could demand for data centres decline as AI systems become more efficient?

One thing’s for sure: savvy investors in Advnsys in Amsterdam will have alerts set for anything coming from another company 9,000km away. For now, Nvidia in Santa Clara, California, remains the bellwether for all things AI.

The Irish company that runs the Brown Thomas and Arnotts department stores recorded like-for-like growth in revenues and profits in spite of a decline in sales of some luxury goods and a more “challenging” trading environment.

Latest accounts for Brown Thomas Arnotts Ltd show it made a pretax profit of just under €19 million on turnover of €319.3 million for the 48 weeks to last January 4th.

On a like-for-like basis, the company’s sales rose by 3 per cent while its operating profits were up 50 per cent.

The accounts also show the Irish retailer paid a €10 million dividend to its parent, Cambridge Retail Group Holding Ltd, after the year end. This was in addition to a €496,000 payment last year.

Its revenue comprised €273.8 million in retail sales and €45.5 million in concession incomes. And the company paid tax of just under €1.5 million on its profits.

The accounts cover a shorter time frame than usual as the firm changed its year-end to align with that of its parent company, the Central Group.

Brown Thomas and Arnotts are part of the same retail group as Selfridges in the UK and De Bijenkorf in the Netherlands.

Commenting on trading in the current financial year, Donald McDonald, chief executive of Brown Thomas Arnotts, told The Irish Times: “Trading has been a little more challenging but we’re still up on last year, which is quite satisfactory.

“We are low digits [percentage] increase up on last year, 2-3 per cent up. The early part of 2024 was challenging, but we had record sales at Christmas time.

“We were close to 5 per cent up on that period and 40 per cent of our business is done in quarter four, with 25 per cent from mid November to the end of December.

“While we’re [currently] marginally up on this time last year, we still have Christmas to come and that’s the big period for us. It could all swing on that.”

Mr McDonald said sales at its Dundrum Town Centre store, which opened three-and-a-half years ago, have been “exceptional”, up 13 per cent on last year.

“We had a four-year payback on our initial €13.5 million investment in Dundrum and it has paid itself back in two years. It’s been a huge success,” he said.

Online sales, meanwhile, will break the €100 million barrier this year, in gross terms. “It’s about 16 per cent of our turnover this year and is the third biggest store after Brown Thomas and Arnotts,” he said.

“We put that [increase] down to the operational effectiveness we’ve put in place over the past two or three years.

“Ninety per cent of all our orders are now picked and ready for distribution within 24 hours. About 400,000 parcels will be distributed over the mid November to the end of December period.”

But sales of some luxury brands have softened this year, with visitor numbers from the United States and China down.

“Forty per cent of our tourism number would be US and we’re seeing a 4-5 per cent decline in that customer,” he said, saying that 20 per cent of sales at its flagship Grafton Street store would be tourist-related.

The headcount at Brown Thomas and Arnotts reduced to 1,459 last year from 1,534, while its total payroll costs amounted to €64.4 million. Directors’ remuneration was just under €1.5 million.