Interim Management Statement

Superglass Holdings Plc

("Superglass" or the "Group")

Interim Management Statement and Update on Furnace Failure

Superglass Holdings PLC, the UK's leading independent manufacturer of glass fibre insulation products today issues its Interim Management Statement for the period from 1 March 2010 to date, incorporating an update on the furnace failure experienced in late June.

Furnace Failure

We announced on 28 June that Superglass had experienced a failure of one of the furnaces at its Stirling plant. The Board is pleased to report that progress on repairs has been faster than initial estimates and we now expect the furnace to be fully operational by the end of August. The shortfall in capacity has, in part, been offset by increasing output from the remaining furnace but the Group will continue to experience a shortfall in sales volumes until production is fully restored. The estimated impact on Group profitability is £0.9m arising from a combination of lower sales, repairs to damaged plant and increased short term labour costs. Whilst the Group's insurers have been notified and a significant recovery is expected, the entire cost will be charged against profits in the current financial year.

Investigations into the causes of the failure are continuing with the help of our insurers. The direct cost of repairs to the failed unit is £0.3m. These repairs should improve the operational performance of the furnace and will extend its working life, deferring a planned rebuild of the unit previously scheduled for 2011 (at an estimated capital cost of between £1.5m and £2.0m) by at least 18 months.

The recent plant failure follows other, less serious and unrelated, production outages experienced during the course of the last year and, as a result, the Board has determined to accelerate investment in the fabric of the Group's remaining furnace. This accelerated investment, again at a cost of approximately £0.3m, is scheduled to be completed during the first half of the new financial year and is expected to extend the regular working life of the second furnace until 2014. The expenditure is within our normal capital expenditure budgets. This work will be carried out on a pre-planned basis to ensure there is no disruption to supplies.

Current Trading

As we expected, clarification of the extension of the CERT programme was not made by the previous Government ahead of May's general election. This led to continued uncertainty and a further decline in demand in this section of the market, as energy suppliers awaited confirmation of the extension and details of the targets applicable. The CERT programme, currently the largest source of sales for Superglass products, has seen like-for-like sales decline by 40% from this segment in the second half of the financial year.

To offset this decline new sales initiatives have already been implemented in the form of targeted approaches to the residential housing market. We have broadened our customer base, through the efforts of an enlarged sales team and innovation, in both specialist distribution and builders merchants. In the second half of 2009/10, sales through these channels have increased by 10% in aggregate on the prior year. This success has however been insufficient to make up for the temporary shortfall in CERT-related volumes.

We are pleased and encouraged to see that the new government has devoted the necessary resource so early in its administration to implement the Statutory Instrument confirming the CERT extension by a period of 21 months until December 2012. We anticipate that this will be a strong driver of additional demand for our products, commencing from early 2011 onwards.

Financing

Despite the costs associated with the furnace failure and the planned capital investment programme, the Group continues to operate within the limits of its banking facilities and covenants. Repayments of the Group's amortising term loan facility have continued in accordance with the facility terms at an annual rate of £3.3m, taking the total reduction in term debt since IPO in 2007 to in excess of £10m by the end of the current financial year.

Management

As outlined in our interim results, we are putting in place a strategy to drive future earnings growth by broadening our product range and customer base. As a result, the Group continues to invest in strengthening its senior executive management team. A new Operations Director was appointed on 1 May and, in conjunction with the Group Chief Executive, he has already identified opportunities for significant efficiency gains throughout the manufacturing and product handling process. A reorganisation of operations management has also taken place to create greater focus on our key priorities of safety and environmental improvement, waste and distribution cost reduction.

A new financial controller was appointed at the end of June and, in addition to the two new sales executives already hired this year, one further sales executive will join imminently with plans to expand the team further in the year ahead.

Outlook

We currently expect that demand for the Group's products from CERT-related sales channels will continue at reduced levels until the end of 2010. This reduction, combined with the potential for further increases in energy costs, leads us to continue to adopt a cautious position on the Group's near-term prospects.

In the medium term, however, we are continuing to position Superglass to benefit from the structural and regulatory drivers which will bring increasing demand for our insulation products and remain confident about the Group's prospects over the longer term.

ENDS

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Notes to Editors

Superglass is the only independent manufacturer of mineral wool insulation in the UK.

Based in Stirling, the Group manufactures a full range of thermal and acoustic mineral wool products for the construction industry; products which are key in assisting customers in meeting the Government's increasing requirements for improved energy efficiency and noise control in buildings.

Continued planned investment in its manufacturing plant, together with a commitment to provide first class service and support services, means that Superglass is able to offer high quality standard and bespoke products to meet all customers' insulation needs.