19th Nov 2013 13:01
LONDON (Alliance News) - Insulation business Superglass Holdings PLC Tuesday said it swung to a loss for the full-year as it lamented the UK government's flagship energy saving scheme, the Green Deal.
The company, which supplies heat loss prevention products for buildings, posted a pretax loss of GBP7.0 million for the period ended 31 August, compared with a GBP6.8 million profit a year earlier.
Superglass blamed the replacement of the UK government initiated Carbon Emissions Reduction Target (CERT) with the Green Deal and Energy Companies Obligation (ECO) which have struggled to take off.
However, the figure also includes the significant exceptional one-off credits relating to debt for equity swaps of GBP4.7 million plus a GBP5.0 million goodwill impairment charge in the current year.
ECO places legal obligations on the larger energy suppliers to deliver energy efficiency measures to domestic energy users. It operates alongside the Green Deal which is designed to help people make energy efficiency improvements to buildings by allowing them to pay the costs through their energy bills rather than upfront.
Superglass said sales during the second-half reduced from first-half levels as a result of the impact of the CERT scheme transition which commenced in January 2013, while sales prices continued to be under pressure throughout the year.
Subsequently revenue declined 25% to GBP24.4 million, compared with GBP32.4 million in 2012.
"It is difficult to envisage that activity levels in Green Deal and ECO can fall any further and with recent evidence of strong growth in housing activity, it is likely that demand will begin to recover, albeit from a very low base," the company said.
"However, we had previously anticipated better, albeit slow recovery in demand under ECO/Green Deal," it added.
The firm warned that 2014 revenues in this area will be lower than management expectations.
Loss before interest, taxation, depreciation, amortisation and exceptional items was GBP2.5 million, down from a profit of GBP0.4 million for the same period last year.
Superglass said it had net cash balances of GBP4.3 million at 31 August compared with net debt of GBP3.5 million in 2012.
While the company continues to struggle, the board does not propose to pay a dividend.
The stock was trading at 33.50 pence Tuesday morning, down 2.50 pence or 6.9%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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