Interim Results and Update on Refinancing

Superglass Holdings PLC

("Superglass", the "Company" or together with subsidiaries the "Group")

Update on refinancing, proposed minimum £12.2 million equity issue

and interim results for the six months ended 28 February 2013

Further to the announcement of 6 March 2013, the Board of Superglass is pleased to confirm that it has made significant progress both in negotiating a substantial restructuring of its banking facilities with Clydesdale Bank plc ("Clydesdale Bank") and in closing an issue of new equity by way of a proposed placing (the "Placing") which will transform the strength of Superglass' balance sheet.

The restructuring of the banking facilities and the Placing (together the "Refinancing") will be conditional on, inter alia, achieving a minimum subscription of £12.2 million in the Placing, receipt of all necessary shareholder approvals and the cancellation of the listing of the Company's ordinary shares on the Official List of the UK Listing Authority (the "Official List"), and from trading on London Stock Exchange plc's Main Market, and subsequent admission to AIM ("Admission").

Under the proposed amended agreement with Clydesdale Bank, the following terms have been agreed in principle between the Company and Clydesdale Bank:

·; the conversion of £6.5 million of outstanding indebtedness into convertible shares which from 30 April 2015 would have the right to convert into ordinary shares in the Company representing 10% of the Company's enlarged issued share capital as at Admission;

·; the repayment by the Company to Clydesdale Bank of £3.0 million from the proceeds of the Placing;

·; the amendment of the terms of the residual £2.5 million bank facility, which will be a non-amortising loan with a bullet repayment due on 30 April 2018;

·; Clydesdale Bank will have the right to receive 50 per cent. of the Company's profit after tax (excluding exceptional items), commencing from the year ending 31 August 2014, in permanent reduction of the loan; and

·; no bank covenants applicable until scheduled repayment on 30 April 2018.

In addition, Clydesdale Bank has agreed, conditional upon execution of the placing agreement in relation to the Placing to provide a temporary bridging facility of up to £0.75 million from the middle of May 2013 until the earlier of 4 June 2013 and Admission becoming effective.

Upon completion of the proposed Refinancing and Admission becoming effective, the Company's indebtedness owed to Clydesdale Bank would consequently reduce from the existing position of approximately £12 million (including deferred fees) to £2.5 million, with expected cash balances immediately following completion of at least £7.6 million, if the bridge facility has been fully drawn at that point. This will provide Superglass with the necessary headroom to grow the business.

Under the Placing, verbal commitments in excess of £12.2 million have already been received from both new institutional investors and certain existing shareholders. It is intended that such investors will enter into binding commitments to acquire new ordinary shares (conditional on, inter alia, shareholder approval and Admission) prior to the proposed announcement of the completion of the Refinancing. The equity issue is being conducted by way of a non pre-emptive placing managed by N+1 Singer at an expected effective issue price of 2p per existing ordinary share before a proposed share consolidation.

If for any reason the Refinancing does not proceed, it is likely that existing shareholders' ordinary shares would have no value and that the Company would likely enter into administration or some other form of insolvency procedure.

The Board expects to be able to announce completion of the proposed Refinancing shortly, following which a circular will be posted to shareholders requisitioning a general meeting to approve, inter alia, the Refinancing and transfer to AIM.

A further announcement will be made in due course.

Interim results for the six months ended 28 February 2013

As highlighted within successive trading update statements released on 5 February and 6 March 2013, current trading conditions are extremely challenging for the Group for a number of reasons. The recent transition from CERT to Green Deal has caused a major gap in activity within the retrofit market for both loft and cavity insulation. Combined with abnormally low levels of house-building activity in the UK by historical standards of new unit construction, the net effect is a surplus of UK-based insulation manufacturing capacity and highly competitive market conditions, which in turn are detrimentally impacting the Company's operating profits and cash-flow, albeit that these do not yet reflect the full efficiency benefits that will be realised from Project Phoenix, as set out below.

The first phase of Project Phoenix was completed in April 2013. The Board has reassessed the aggregate deliverable cost savings arising from Phoenix and other related initiatives and has confirmed previous estimates of a reduction in the Group's annual operating cost base of approximately £5.0 million. The first full year of savings for the majority of the benefits is expected to be in the financial year ending 31 August 2014. Once these cost savings are factored in, the Board's assessment is that Superglass can be cash generative at the operating level in the future, even at current depressed market volumes and prices.

The interim results for the six months ended 28 February 2013 are set out in full at the end of this announcement.

John Colley, Non-executive Chairman commented: "With the strong support of the Clydesdale Bank and investors we remain confident of completing this transformational Refinancing which will provide Superglass with a considerably strengthened and sustainable long term capital structure. The proposed refinancing will leave the Company very well placed to benefit from any resurgence in market volumes and the efficiencies from its recent capital investment programme."

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Superglass Holdings Plc

Interim report for the six months ended 28 February 2013

Financial Highlights

·; Revenue down 20% to £13.7m (2012: £17.2m)

·; LBITDAE* : £0.2m (2012: EBITDAE: £0.5m)

·; Loss before taxation, exceptional items and amortisation of intangible assets £1.6m (2012: £0.8m)

·; Project Phoenix capital investment programme completed in April 2013 - on track to deliver previously announced increased annualised benefits of up to £5.0m per annum

·; Results include significant exceptional costs arising primarily from impairment of tangible and intangible assets as a result of the capital investment

·; Significant progress made in the refinancing of the Group, subject to shareholder approval, and transfer to AIM, incorporating a placing of at least £12.2m of ordinary shares and a restructuring of the Group's bank facilities, including repayment of £3.0m outstanding debt and conversion of £6.5m of debt into convertible shares

* LBITDAE - Loss before interest, depreciation and tax adjusted for the effect of amortisation of intangibles and exceptional items

Chief Executive's statement

Introduction

As highlighted within successive trading update statements released on 5 February and 6 March 2013, current trading conditions are extremely challenging for the Group for a number of reasons. The recent transition from CERT to Green Deal has caused a major gap in activity within the retrofit market for both loft and cavity insulation. Combined with abnormally low levels of house-building activity in the UK by historical standards of new unit construction, the net effect is a surplus of UK-based insulation manufacturing capacity and highly competitive market conditions, which in turn are detrimentally impacting the Company's operating profits and cash-flow, albeit that these do not yet reflect the full efficiency benefits that will be realised from Project Phoenix, as set out below.

The first phase of Project Phoenix was completed in April 2013. The Board has reassessed the aggregate deliverable cost savings arising from Phoenix and other related initiatives and has confirmed previous estimates of a reduction in the Group's annual operating cost base of approximately £5.0 million. The first full year of savings for the majority of the benefits is expected to be in the financial year ending 31 August 2014. Once these cost savings are factored in, the Board's assessment is that Superglass can be cash generative at the operating level in the future, even at current depressed market volumes and prices.

Trading

The results for the six months to 28 February 2013 reflect the continuing difficult trading conditions and planned production outages for Project Phoenix works. Revenue for the period was £13.7m, 20% down on the same period last year. Loss before interest, taxation, depreciation, amortisation and exceptional items was £0.2m, a deterioration of £0.7m from the same period last year. The loss before taxation, exceptional items and amortisation of intangible assets was £1.6m (2012: loss of £0.8m) and the loss before taxation after exceptional items was £2.9m (2012: profit of £8.1m, including a £10.1m accounting gain arising on debt for equity swap).

The results for the period include significant exceptional costs of £1.3m (2012: exceptional credit of £8.9m, including a £10.1m accounting gain arising on debt for equity swap). These consist of the write-down of the remaining book value of certain tangible and intangible assets that are no longer believed to have any value to the Company as a result of the Company entering into new arrangements for the supply of fiberising technology, and also costs incurred in the recent refinancing activity, including professional fees.

Operations

The six months to 28 February 2013 have been very busy for our operations team with the planned capital investment in the first production line completing in November 2012 and work continuing to allow the second shutdown period in March and April 2013 for the investment in our second production line, concluding the first phase of Project Phoenix as planned. The completion of the investment in one line has seen the Group make progress towards delivering the planned production efficiencies and cost savings envisaged at the inception of the project but benefits are not expected to have a meaningful impact on the Group's results until the financial year ending 31 August 2014 with the current financial year results to reflect the impact of two extended shut down periods within its results.

The implementation of this investment would not have been possible but for a huge effort from all staff in the business and I would like to place on record my thanks and appreciation of the commitment of our staff in working tirelessly to implement this investment which will allow our Stirling plant to produce improved quality products more efficiently than ever before.

Dividends

In accordance with the terms of our banking arrangements Superglass will not be paying an interim dividend. Whilst the Board intends to pay dividends when the Company's profitability, cash generation and underlying growth of the business justifies, it does not currently expect the Company to pay a dividend for the foreseeable future.

Outlook and refinancing

The Board expects sales volumes in the second half of the year to be below first half levels as the transition from CERT to ECO/Green Deal continues to impact on the overall level of demand in the market.

Looking beyond the current financial year, there are grounds for greater optimism in the Group's core markets. The Board expects that government stimuli will generate a gradual increase in UK house-building activity from 2014 onwards; and that the volume of retrofit activity should significantly improve within a timescale of six to twelve months as the flagship Green Deal and ECO initiatives become fully operational.

However, debt amortisation payments are due to resume in November 2013 and the Board's view is that for so long as market conditions remain as they are now, these debt service obligations will be unsustainable.

It is against this background that the Board has made significant progress in the restructuring of its banking facilities with Clydesdale Bank plc and completing an issue of new equity by way of a proposed placing.

The restructuring of the banking facilities and the Placing (together the "Refinancing") will be conditional on, inter alia, achieving a minimum subscription of £12.2 million in the Placing, receipt of all necessary shareholder approvals and the cancellation of the listing of the Company's ordinary shares on the Official List of the UK Listing Authority (the "Official List"), and from trading on London Stock Exchange plc's Main Market, and subsequent admission to AIM ("Admission").

Under the proposed amended agreement with Clydesdale Bank plc the following terms have been agreed in principle:

·; the conversion of £6.5m of outstanding indebtedness into convertible shares which would have the right to convert from 30 April 2015, into ordinary shares in the Company at the Placing Price representing 10% of the Company's enlarged issued share capital as at Admission;

·; the repayment by the Company to Clydesdale Bank plc of £3.0m from the proceeds of the Placing;

·; the amendment of the terms of the residual £2.5m bank facility, which will be a non-amortising loan with a bullet repayment due on 30 April 2018;

·; Clydesdale Bank will have the right to receive 50% of the Company's profits after tax (excluding exceptional items) commencing from the year ending 31 August 2014, in permanent reduction of the loan; and

·; no bank covenants applicable until scheduled repayment on 30 April 2018.

The proposed debt conversion and the revised committed facilities have been negotiated with the Clydesdale Bank plc with a view to providing the Group, in conjunction with the Placing, with a strengthened and sustainable long term capital structure. The proposals, in addition to reducing bank debt and restructuring the balance sheet, will result in cash headroom at completion of at least £7.6m. As a result, Superglass will have a strengthened and more appropriate capital structure as a platform upon which to build a sustainable, strong and resilient long term business that is better positioned to compete more effectively. Furthermore, the Board has agreed temporary bridging facilities of £0.75m with Clydesdale Bank plc which are required to fund the Group's cash requirements from mid May 2013 until receipt of the proceeds of the Placing.

Admission to AIM will provide Shareholders with a market on which to trade their Ordinary Shares whilst providing the Company with continued access to equity capital, including the potential ability to raise further funds, if required. The Board believes that a transfer to AIM will provide the Company with a market more suited to its current size and market capitalisation. The simplification of administrative and regulatory requirements, with a consequential reduction in ongoing costs associated with a premium listing on the Main Market and its associated one-off professional costs when issuing new equity, will allow the Company to more effectively implement its cost savings objectives.

The Board expects to be able to announce completion of the proposed Refinancing shortly, following which a circular will be posted to shareholders requisitioning a general meeting to approve, inter alia, the Refinancing and transfer to AIM.

The Delisting and Admission will not have any impact on the Company's strategy or business.

The Board continues to believe that glass wool insulation products will be pivotal in the drive to improve energy efficiency in the UK and abroad and that Superglass can be a strong independent force in the market. While in the short-term demand levels in the market are subdued and the timing and impact of the transition from CERT to a fully operational Green Deal model remains uncertain, the Company has made excellent progress in its capital investment project. The proposed refinancing will leave the Company very well placed to benefit from any resurgence in market volumes and the efficiencies from its capital investment programme.

Alex McLeod

Chief Executive Officer

30 April 2013

Notes to the accounts

for the six months ended 28 February 2013

1 Basis of preparation

These interim financial statements represent the condensed consolidated financial information of the Company and its subsidiaries (together referred to as "the Group") for the six months ended 28 February 2013. They have been prepared in accordance with the Disclosure and Transparency Rules of the UK's Financial Services Authority and the requirements of IAS 34 Interim Financial Reporting as adopted by the EU. The interim financial statements were approved by the Board of Directors on 30th April 2013. The interim financial statements do not constitute financial statements as defined in Section 435 of the Companies Act 2006 and do not include all of the information and disclosures required for full annual financial statements. 

They should be read in conjunction with the annual report and accounts 2012 which are prepared in accordance with IFRS as adopted by the EU and which are available on request from the Company's registered office or to download from www.superglass.co.uk.

The interim financial statements for the current and previous period are unaudited. This interim financial statement has not been reviewed by the Company's auditor. The comparative figures for the financial year ended 31 August 2012 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the registrar of companies. The Independent Auditors' Report was: (i) unqualified; (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report; and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.

In determining whether the Group's 2013 interim financial statements can be prepared on a going concern basis, the Directors considered all factors likely to affect its future development, performance and its financial position, including cash flows, liquidity position and borrowings facility, progress made with the Refinancing transaction as described in note 15 and the risks and uncertainties relating to the business activities in the current economic climate.

The key factors considered by the directors were;

·; the implications of the challenging economic environment and weakening levels of demand including the impact of changes in government led demand generating initiatives such as the transition from the CERT scheme to ECO/Green Deal

·; the impact of upward pressure on input prices

·; the ability of the Group to maintain its frequency of receipt of trade receivables and the credit risk associated with these balances

·; the competitive environment in which the Group operates

·; the potential actions that could be taken in the event that revenues are worse than expected in order to protect cash flows and operating profit

·; the finance facilities available to the Group, including the availability of any short-term funding required as the Board makes progress towards its planned refinancing and banking covenants

·; progress made towards closing the Refinancing and the Directors' assessment of the likelihood of the Refinancing completing on the terms currently contemplated, including whether or not the relevant resolutions are likely to be approved by shareholders at the General Meeting which is expected to be convened for the purposes of approving the Refinancing.

The Group prepares regular forecasts and projections of revenues, profits and cash flows that are essential for identifying areas on which management can focus to improve performance and mitigate possible adverse impact of a deteriorating economic outlook. They also provide projections of working capital requirements.

The Directors have reviewed the trading and cash flow forecasts as part of their going concern assessment, including downside sensitivities, which take into account the uncertainties in the current operating environment.

In forming their conclusions over the adoption of the going concern basis, the Directors have considered the progress made towards closing the Refinancing (including the renegotiation of the agreed banking facilities as set out in note 15) and their assessment of the likelihood of the Refinancing completing on the terms currently contemplated. Based on the information available to them as at the date of this Interim Report and their assessment of the likely outcome of the shareholder vote described below, the Directors believe that it is reasonable to conclude that the Refinancing will complete on the terms currently contemplated.

In forming their conclusions over the adoption of the going concern basis, the Directors have also considered the possibility that the necessary resolutions which will require to be approved by shareholders at a General Meeting convened for the purposes of approving the Refinancing will not be passed. On the basis of the available evidence and the Directors' assessment of the possible outcomes for the Group and shareholders should the resolutions be passed, the Directors consider this possibility to be remote.

Having considered all the factors impacting the Group, including downside sensitivities, the Directors are satisfied that the Group will be able to operate within the terms and conditions of the Group's financing facilities for the foreseeable future.

The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, a period of time not less than 12 months from the date of this report. For this reason the going concern basis has been adopted in preparing this Interim Report.

2 Significant accounting policies

The interim financial statements are prepared on the historical cost basis (except in relation to derivative financial instruments, convertible shares and intangible assets arising on business combinations which are stated at fair value) and are presented in Pounds Sterling, rounded to the nearest thousand.

The preparation of the interim statements requires the Directors to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities and income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of the judgements made about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. There has been no material change to the approach taken by Directors in considering estimates and judgements considered to be critical compared to that applied and detailed in the annual report and accounts 2012.

The Group's financial risk management objectives and policies are consistent with that disclosed in the consolidated financial statements as at and for the year ended 31 August 2012.

2 Significant accounting policies

The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group as disclosed in its consolidated financial statements as at and for the year ended 31 August 2012, except in relation to the items noted:

New IFRS and amendments to IAS

The financial statements for the year ending 31 August 2013 are impacted by a number of new standards and interpretations, none of which amend income and net assets of the Group. The key new standards/amendments adopted are as follows:

Amendments to IAS 1 'Financial Statement Presentation'

This amendment was issued in June 2011 and is effective for periods beginning on or after 1 July 2012. The amendments improve how components of other comprehensive income are presented.

3 Segment information

The Group has only one class of business: the manufacturing and sale of insulation materials and, as a result, has only one reportable segment with no aggregation having been applied. The reportable segment has been identified with reference to the activities of the Group and the information used by the Chief Operating Decision Maker (the Board). The performance of the segment is assessed by reference to its gross profit.

Manufacture and sale of insulation

All revenue is from external customers with no inter-segment revenues given the existence of only one operating segment.

The segment gross profit is reconciled to the total profit before income tax as shown in the Consolidated Statement of Comprehensive Income.

All of the assets of the Group are managed by the Board on a central basis. All of the assets of the Group are deemed to be attributable to the reportable segment and, as a result, no separate reconciliation of segment assets to the total assets figure on the Balance Sheet is necessary.

Other information

The Group operates predominantly within the UK and Ireland with some worldwide sales, largely in the EU. Revenue is attributed to external customers based on the location of the customer.

Major customers

There were three customers (six months ended 29 February 2012: two; year ended 31 August 2012: two) that accounted for in excess of 10% of the Group's revenue. These customers accounted for £3.3 million (six months ended 29 February 2012: £4.7 million; year ended 31 August 2012: £9.3 million), £1.5 million (six months ended 29 February 2012: £2.5 million; year ended 31 August 2012: £5.2 million) and £1.5 million of revenue respectively.

4 Exceptional items

Items of exceptional income and expenditure in the period to 28 February 2013 relate to the impairment of tangible fixed assets and a licence held that have become obsolete by virtue of the Group's capital investment programme. In addition to these exceptional items the Group has also incurred exceptional expenditure in relation to reorganisation activities undertaken during the period.

5 Tax charge

Tax for the interim period is charged at 23% on the loss (six months ended 29 February 2012: 24%; year ended 31 August 2012: 25%) representing the estimated annual effective tax rate for the full year.

A reduction in the rate from 25% to 24% (effective from 1 April 2012) was substantively enacted on 26 March 2012 following the March 2012 Budget which also announced that the UK corporation tax rate will reduce to 22% by 2014. The March 2013 budget also announced a further reduction in the UK Corporation Tax rate to 20% (effective from 1 April 2015).

This will reduce the Company's future current tax charge accordingly. It has not yet been possible to quantify the full anticipated effect of the announced further 2% rate reduction, although it is expected this will further reduce the Company's future current tax charge and reduce the Company's deferred tax liability accordingly.

6 Property, plant and equipment

The closing balance includes £2,651,000 (six months ended 29 February 2012: £547,000; year ended 31 August 2012: £3,832,000) of assets under construction.

7 Intangible assets

Intangible assets impaired in the year relate to licences held.

8 Cash and cash equivalents

The cash and cash equivalents balance at 28 February 2013 is stated net of £5,125,000 drawn down from the Group's available revolving credit facility (29 February 2012: £1,000,000).

9 Retirement benefit obligations

The Group operates a defined contribution Group Sponsored Personal Pension Plan, membership of which is voluntary. The assets of the scheme are held separately from those of the Company in independently administered funds. Employer contributions to the fund are recognised as an employee benefit expense in profit or loss when they are due. Contributions made in the period were £80,000 (six months ended 29 February 2012: £75,000; year ended 31 August 2012: £134,000).

10 Share capital

In the six months to 28 February 2013 there have been no changes to the share capital issued by the Company. 

In the six months to 29 February 2012 the Company concluded an issue of equity share capital that was approved by shareholders at an Extraordinary General Meeting on 30 November 2011 and has had the following impact on share capital:

• The existing 1.0 pence ordinary shares at 1 September 2011 were consolidated into post-consolidation ordinary shares on a twenty for one basis. An equity share issue of 47,272,745 ordinary shares with a par value of 20.0 pence was approved by shareholders increasing the equity share capital of the Company by £9,454,949. Issue costs of £1,276,000 were recognised directly in equity.

• The revised issued and fully paid up ordinary share capital of the Company consists of 50,189,410 ordinary shares with a par value of 20 pence, of which the Company holds 19,750 shares in treasury.

• In addition to the issue of ordinary share capital the Group also entered into a debt for equity swap with its bankers. The Group's bankers have converted £12.15 million of the borrowing outstanding at 31 August 2011 into 14,985,748 convertible shares, which, subject to certain conditions, will have the rights of conversion into ordinary shares in the capital of the Company representing 23.0% of the entire issued share capital following conversion.

• The resulting convertible shares are presented within share capital with a par value of approximately £3.0 million and the Group's outstanding long-term borrowings have reduced correspondingly to £5.1 million.

• The directors have established a fair value of the convertible shares issued of approximately £1.8 million. As required by accounting standards (IFRIC 19) a credit of £10,340,000 was recognised in the income statement as the differences between the carrying value of the borrowings and the fair value of the convertible shares. To comply with the requirements of UK company law a reserves transfer of £10,340,000 in respect of the accounting gain was made between retained earnings and share premium in addition to the transfer of £1,187,000 which represents the difference between the par value of the shares and their fair value for accounting purposes and as a result the net impact on share premium is £9,153,000.

11 (Loss)/earnings per share

The calculation of basic and diluted earnings per share at 28 February 2013 was based on the loss attributable to ordinary shareholders of £2,219,000 (six months ended 29 February 2012: earnings £8,622,000; year ended 31 August 2012: earnings £7,121,000).

Adjusted (loss)/earnings per share

Adjusted loss per share at 28 February 2013 was 1.8 pence (six months ended 29 February 2012: loss 0.01 pence; year ended 31 August 2012: loss 3.7 pence). Adjusted earnings per share is based on the (loss)/profit attributable to ordinary shareholders after adding back amortisation of intangible assets and the impact of exceptional items. Adjusted loss amounts to £898,000 for the six months ended 28 February 2013.

Weighted average number of ordinary shares

During the six months to 28 February 2013 there has been no change to the issues share capital of the Group and the figures presented for this period reflect the share capital in issue for the entire period.

Comparative figures presented show the impact of the equity issue and recapitalisation of the business approved on 30 November 2011 by shareholders at an Extraordinary General Meeting. As part of the approval of the equity share issue a share consolidation took place whereby 20 shares with a par value of 1 pence were swapped for one share with par value of 20 pence.

The figures presented below for the six months ended 29 February 2012 and the twelve months ended 31 August 2012 reflect the position taking into account the date of ordinary share issue.

12 Contingencies and commitments

13 Related party disclosures

The Group has a related party relationship with the defined contribution pension fund by virtue of some of the Directors being trustees and with its Executive and Non-executive Directors. There is no change in the position disclosed in the Superglass Holdings Plc annual report and accounts for the year ended 31 August 2012.

14 Principal risks and uncertainties

The 2012 annual report sets out the principal risks and uncertainties faced by the Group at August 2012 and details the processes in place for managing those risks.

The directors do not consider these risk factors to have changed significantly and therefore the principal risks and uncertainties facing the Group for the remaining six months of the year are consistent with those set out in the 2012 annual report. However, there may be additional factors which are not currently known to the Group, or which we currently deem immaterial, which may also have an adverse effect on our business.

There have been no significant changes to the risk management process in the interim period.

15 Post balance sheet events

Subsequent to the interim period end the Company has made significant progress both in negotiating a restructuring of its banking facilities with its bankers and in closing an issue of new equity by way of a proposed placing of Ordinary shares capital.

The restructuring of the banking facilities and the Placing (together the "Refinancing") would be conditional on, inter alia, achieving a minimum subscription of £12.2m in the Placing, receipt of all necessary shareholder approvals and the cancellation of the listing of the Company's ordinary shares on the Official List of the UK Listing Authority, and from trading on London Stock Exchange plc's Main Market, and subsequent admission to AIM ("Admission").

Under the proposed agreement with its banker, the following terms have been negotiated:

·; the conversion of £6.5m of outstanding indebtedness into convertible shares which would have the right to convert from 30 April 2015, into ordinary shares in the Company at the Placing Price representing 10% of the Company's enlarged issued share capital as at Admission;

·; the repayment by the Company to Clydesdale Bank plc of £3.0m from the proceeds of the Placing;

·; the amendment of the terms of the residual £2.5m bank facility, which will be a non-amortising loan with a bullet repayment due on 30 April 2018;

·; the Clydesdale Bank will have the right to receive 50% of the Company's profits after tax (excluding exceptional items) commencing from the year ending 31 August 2014, in permanent reduction of the loan; and

·; no bank covenants applicable until scheduled repayment on 30 April 2018.

Upon completion of the proposed Refinancing and Admission becoming effective, the Company's bank debt will consequently reduce from the existing position of approximately £12 million (including deferred fees) to £2.5 million.

Statement of Directors' responsibilities

The interim report is the responsibility of, and has been approved by, the directors of Superglass Holdings PLC.

The directors confirm that to the best of their knowledge:

·; the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union;

·; the interim management report includes a fair review of the information required by:

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

By order of the Board

Alex McLeod John Colley

Chief Executive Officer Chairman