28th Feb 2014 13:49
LONDON (Alliance News) - Superglass Holdings PLC Friday said it continues to experience very challenging market conditions due to continued weakness in the retrofit market, but expects to return to positive earnings before interest, taxation depreciation and amortisation by the end of the second half of the year.
The company, which make glass wool and mineral fibre insulation solutions, said it has been affected by slow uptake of the UK government's flagship energy saving scheme Green Deal and a reduction in the Energy Company Obligation (ECO).
ECO places legal obligations on the larger energy suppliers to deliver energy efficiency measures to domestic energy users.
In an update for the half year to date, Superglass said trading has been hurt by a shortfall in UK sales volumes and "resultant production outage to reduce stock levels".
"Whilst second half trading is expected to benefit from additional sales volumes, higher sales prices, normalised production levels and a higher run rate of cost savings, the overall trading performance of the business for the period, and for the full year to 31 August 2014, will be significantly below management expectations," it added.
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 - generate a positive contribution.
The firm said overall exports now accounts for more than 15% of total volumes compared with 4% in the first half 2013.
Financially, the firm said it is trading with adequate cash headroom and is expected to be generating cash on a monthly basis by the year end, although the cash balance at the end of August will be below original expectations.
The company said it expects to announce its half-year results on April 30.
The stock was trading at 43.00 pence Friday morning, down 11.00 pence or 20%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
SPGH.L