30th Apr 2014 12:44
LONDON (Alliance News) - Superglass Holdings PLC Wednesday said it losses widened in the half year, after a more challenging year than expected in the retrofit market due to further uncertainty in the UK government sponsored schemes of the Green Deal and Energy Company Obligation.
The company, which make glass wool and mineral fibre insulation solutions, posted a pretax loss of GBP4.3 million for the six months ended February 28, versus a GBP2.9 million loss a year before, as revenue fell 17% to GBP11.4 million from GBP13.7 million.
Superglass Holdings said it continues to be affected by slow uptake of the UK government's flagship energy-saving scheme Green Deal and a reduction in the Energy Company Obligation (ECO) which replaced Carbon Emissions Reduction Target (CERT) in 2013.
ECO places legal obligations on the larger energy suppliers to deliver energy efficiency measures to domestic energy users.
Superglass said the very low take up of the new schemes compared with very high levels of demand in the final months of the CERT programme resulted in a volume decline in this channel of 64% compared with the corresponding period.
The company said the consequence has been an over-supplied market with a resultant decline in sale prices.
In response to the hiatus in UK government sponsored schemes, the company has repositioned to focus on construction and export markets. It said sales volumes in construction and export channels were ahead of the corresponding period by 15% and 143%, respectively.
Superglass said to combat weakness in UK demand, it has begun actively developing routes to Eastern European markets, which - while less profitable than UK sales due to high transport costs - generated a positive contribution. Overall exports now account for more than 10% of total volumes compared to 3% in the first half of financial year 2013.
In light of its woes, the firm said it will not be paying an interim dividend but intends to do so when its profitability, cash generation and underlying growth of the business justifies it.
The stock was trading down 2.7% at 41.86 pence.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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