Interim Results

Superglass Holdings plc

("Superglass" or the "Company")

Interim Results for the Six Months ended 28 February 2011

Superglass Holdings plc, the UK's leading independent manufacturer of glass fibre insulation solutions today announces its interim results for the six months ended 28 February 2011.

Results highlights

·; Revenue and PBTA in line with recent market expectations

·; Revenue £15.0m (2010: £16.8m)

·; PBTA* £0.0m (2010: £2.6m)

·; Adjusted EPS* 1.0p (2010: 4.2p)

* PBTA - Profit before tax adjusted for the effect of amortisation of intangibles. Adjusted EPS is also adjusted for the amortisation of intangibles

Operational highlights

·; CERT volumes behind expectations but 68% of insulation targets still to be met by 2012

·; Significantly improved operating efficiency

·; Continued emphasis on working capital management

·; Broadened routes to market and extended customer base

·; Encouraging volume trend in 2nd quarter

Tim Ross, Chairman commented: 

"Superglass has made positive progress in the period under review against a backdrop of a CERT market which continues to lag expectations. Management have however taken positive action to increase volume and gain market share. The operational difficulties experienced in the latter part of 2010 are now behind us and we are benefitting from the resulting efficiency gains. The timing and extent of the anticipated upturn in CERT-related volumes remain difficult to predict. At this stage, however, we continue to believe that current market expectations for the year should be achieved."

For further information, please contact:

Chief Executive's Statement

INTRODUCTION

Superglass is recovering from the exceptionally challenging market and operational conditions experienced during the six month period to 28 February 2011. Against this backdrop, the Company is today reporting trading in line with recent market expectations with profit before tax and amortisation at break-even and EBITDA of £1.1 million.

Revenue was down 10.7% to £15.0 million primarily due to the continued shortfall in the Carbon Emissions Reduction Target Scheme (CERT). Results were also impacted by lower selling prices, higher energy costs and planned repairs to our second furnace.

The management team has, however, taken positive action to confront these challenges and as a result has seen a recovery in market share and a significant increase in volumes since the end of the half year. In achieving this, the Company has successfully broadened its routes to market and its customer base, and has also delivered significant efficiency improvements.

SALES AND MARKETS

Overall volumes were down 10.2% on the comparable period. First quarter volumes were down 20% due to a decline in CERT and the ongoing effect on sales of the furnace failure in July 2010. Second quarter volumes were 1% ahead of last year despite poor December weather and the continued shortfall in CERT.

With overall demand not recovering, we have rebased our pricing to recover market share. As a result, we are seeing a significant improvement in sales volumes which is not yet reflected in revenue or overall margins.

Carbon reduction: Whilst the necessary legislation to extend CERT was passed into law in August 2010, anticipated growth from the CERT extension has not materialised during the subsequent period. The targets require an estimated 1.4 million cavity wall installations and 2.1 million loft installations by December 2012. This compares with estimates of actual installations for 2010 of 0.4 million cavity wall installations and 0.7 million loft installations, respectively. (source: CIGA)

Reflecting the general shortfall in CERT-related activity, Superglass' first quarter sales volumes were down 39.4% compared with the previous year. Second quarter sales were up 2.3% despite poor weather in December. This improvement in second quarter volumes has arisen from strong loft insulation sales, whilst cavity wall insulation sold through our exclusive distribution partner, Insta, remained very weak. It is likely that share has been lost in cavity wall insulation and in order to combat this we have given price support to regain market share and this is beginning to show results.

Since the period end we have also secured a new insulation contractor for loft insulation, meaning we now supply all of the major installers in the UK. There have been marked signs of improvement in CERT volumes throughout the 3rd quarter as energy suppliers release more funding to installers.

Distributors: Key market channels for Superglass are new build housing and commercial construction. Housing activity was much stronger throughout 2010 but continued weakness in mortgage availability and consumer confidence is still affecting the market. Commercial activity remains subdued with a significant reduction in major projects throughout 2010 and this is expected to continue in 2011.

Superglass has grown its market share with the introduction of additional sales resource and a strong focus on new build housing in particular. As a result overall volumes were 6.3% ahead of last year's equivalent period and our growth profile improved further in the second quarter with volumes up 15.6% on the prior year. We are confident that we can build further upon this encouraging performance during the remainder of the year.

Builders Merchants: Sales are driven by repairs, maintenance and improvement work. We have seen some modest growth in 2011 but this is expected to be followed by more subdued activity following the recent changes to the VAT rate and uncertainty around consumer confidence.

Superglass has already grown volumes significantly with builders merchants now representing 25% of total volume compared to 17% in the equivalent period last year. The loss of one of the smaller independent buying groups was offset by the acquisition of another larger group, resulting in a net gain of around £1 million turnover per annum. The CERT funded DIY scheme SUPERDAD has been more successful this year following the introduction of an innovative internet based voucher scheme.

OPERATIONS

This has been a difficult period, which included extended disruption to our normal production routines. Refurbishment work on the furnace which had failed in July was completed in mid September. The second furnace was refurbished as planned during December and January. The severe weather conditions in December 2010 also resulted in extremely difficult operational conditions, affecting our ability to move both raw materials in and finished goods out. The cumulative effect of these outages reduced our available capacity by 40% during the period. However, the end result was that we achieved a step change in operating efficiency with plant downtime reduced by approximately 30% over the previous six months. This improvement has supported our growth strategy and we have made good progress towards maximising the utilisation of available capacity. We will continue to strive for improvement in the operation of our plant through reduced plant downtime and waste levels.

Capital investment has been carefully controlled, largely focusing on repairs to the two furnaces and compliance and replacement projects.

FINANCE

Reduced sales volumes into the CERT market had a detrimental impact on profitability. This shortfall has been partially offset by improvements in volumes sold through other channels and in focusing on improving product sales mix.

Adverse costs were incurred as a result of production downtime due to the planned furnace refurbishment and unexpected extreme weather in December. Energy costs have also risen significantly over the corresponding period, although current hedging arrangements will mitigate the effect on the year's results.

The Company continues its policy of the amortisation of intangibles, charging £2.2 million in the period. The current year represents the final year in which this non-cash charge will occur.

The Company remained covenant-compliant throughout the period, despite the exceptional market and operational conditions. We agreed, with our bankers in November last year a relaxation in the schedule of quarterly repayments under our term loan facilities and a consequential reduction in our overdraft limit . We continue to enjoy a constructive relationship with our bankers and are placing considerable emphasis on careful cash and working capital management, which remains a strong focus of attention. We have now agreed further adjustments to the terms of our facilities relaxing the cashflow covenant tests for the next year and deferring the previously agreed reduction in our overdraft limit until later in the financial year.

As a result of the trading performance, the Board has decided not to pay an interim dividend. In determining the level of future dividend payments the Directors will take account of the profitability, cash generation and underlying growth of the business while seeking to maintain an appropriate level of dividend cover.

OUTLOOK

The sales team has continued to focus on value added solutions including for new build housing. This resulted in strong growth in the second quarter of the year and we expect this trend to continue. Our new product development process progresses well and we are poised to release the first of these new products in the third quarter.

The refurbished furnaces are proving to be more efficient and much of the work undertaken elsewhere leaves the business well positioned to take advantage of operational gearing opportunities presented through the sales and marketing initiatives that are ongoing.

Predicting an upturn from CERT remains difficult. The targets, which for the first time include a minimum of 68% of all measures to be achieved from insulation, are mandatory and must be achieved by the end of 2012. We have seen an upturn in activity since February, but ongoing margin pressures mean that current run rate profitability, whilst improving, is still disappointing.

At this stage, however, we continue to believe that current market expectations for the year should be achieved.

Condensed consolidated statement of comprehensive income

for the six months ended 28 February 2011

Notes to the accounts

for the six months ended 28 February 2011

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 2011. 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 28 April 2011. 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 2010 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 comparative figures for the financial year ended 31 August 2010 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.

The current economic environment remains challenging and the group has reported an operating loss for the period ended 28 February 2011. As at that date the net debt position was £17,604,000 with headroom of £5,415,000 on committed facilities. The group's bankers continue to remain supportive of the group and have confirmed to the directors that they envisage renewing the group's overdraft facility when it comes up for renewal in November 2011. The group is currently in compliance with its borrowing covenants and continues to operate within its facility requirements. However, recognising the difficult trading conditions experienced in the first six months, and to ensure the group continues to remain compliant with its borrowing arrangements, subsequent to the period end the directors have agreed with the group's bankers a relaxation in the covenant tests relating to the forecast period reviewed by the directors and have also agreed a deferral of the previously agreed reduction in the overdraft limit until later in the financial year.

Whilst the directors clearly cannot envisage all possible circumstances that may impact the group in the future, the directors believe that, having completed a detailed review of relevant internal forecasts, and taking account of reasonably possible changes in trading conditions during the forecast period, the group continues to have sufficient resources available to it to remain within its agreed borrowing facilities.

Accordingly, after making appropriate enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis in preparing the interim financial statements.

Further information regarding the company's business activities, together with the factors likely to affect its future development, performance and position, is set out in the Chief Executive's Statement.

The interim financial statements are unaudited, however, the auditors have carried out a review and their report is set out

on page 13.

2 Significant accounting policies

The interim financial statements are prepared on the historical cost basis (except in relation to derivative financial instruments

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 making the judgements 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 in the estimates and judgements applied in the annual report and accounts 2010.

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 2010.

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 2010, except in relation to the items noted below:

New IFRS and amendments to IAS

The financial statements for the year ending 31 August 2011 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:

IFRS 2 (amendments) Group Cash-settled and Share-based Payment Transactions (effective for accounting periods beginning on or after 1 January 2010). The amendments require an entity receiving goods or services ("receiving entity") in either an equity-settled or a cash-settled share-based payment transaction to account for the transaction in its separate or individual financial statements. This principle even applies if another group entity or shareholder settles the transaction ("settling entity") and the receiving entity has no obligation to settle the payment.

IAS 39 (amendments) Eligible Hedged Items (effective for accounting periods beginning on or after 1 July 2009). These amendments to IAS 39 clarify how the principles that determine whether a hedged risk or portion of cash flows is eligible for designation should be applied in particular situations.

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, predominantly in the EU. Revenue is attributed to external customers based on the location of the customer.

3 Segment information continued

Major customers

There were two customers (6 months to 28 Feb 2010: two, year to 31 August 2010; two) that accounted for in excess of 10% of the Group's revenue. These customers accounted for £3.9m (6 months to 28 February 2010: £4.7m, year to 31 August 2010: £7.4m) and £2.2m (6 months to 28 February 2010: £2.2m, year to 31 August 2010: £4.5m) respectively.

4 Tax charge

Tax for the interim period is charged at 27% (six months ended 28 February 2010: 28%) representing the estimated

annual effective tax rate for the full year. The underlying tax rate, after adjusting for amortisation of ineligible intangible assets

which are not tax deductible, for the six months ended 28 February 2011 was 27% (year ended 31 August 2011: 26%).

The emergency budget on 22 June 2010 announced that the UK corporation tax will reduce from 28% to 24% over a period of four years from 2011. The first reduction in the UK corporation tax rate from 28% to 27% has been substantively enacted and will be effective from 1 April 2011. On 29 March 2011 a further 1% reduction in the tax rate was substantively enacted and it was announced that the UK corporation tax rate will reduce to 23%. It has not yet been possible to quantify the full anticipated reduction, although this will further reduce the Group's future current tax charge and reduce the company's net deferred tax liability accordingly.

5 Property, plant and equipment

The closing balance includes £373,000 (six months ended 28 February 2010: £95,000; year ended 31 August 2010: £612,000) of assets under construction.

6 Intangible assets

7 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 £74,000 (six months ended 28 February 2010: £70,000; year ended 31 August 2010: £166,000).

8 Earnings per share

The calculation of basic and diluted (loss) per share at 28 February 2011 was based on the loss attributable to

ordinary shareholders of £1,612,000 (six months ended 28 February 2010: profit £260,000; year ended 31 August 2010:

loss £317,000).

Adjusted earnings per share

Adjusted earnings per share at 28 February 2011 are 1.0p (2010: 4.2p; year ended 31 August 2010: 7.0p). Adjusted earnings per share is based on the (loss)/profit attributable to ordinary shareholders after adding back amortisation of intangible assets. Adjusted earnings amount to £585,000 for the six months ended 28 February 2011.

Weighted average number of ordinary shares

9 Contingencies and commitments

10 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 annual report for the year ended 31 August 2010.

Statement of Directors' responsibilities

The Directors confirm that this condensed set of financial statements has been prepared in accordance with IAS 34 as

adopted by the EU and that the interim management report herein includes a fair review of the information required by

DTR 4.2.7R and DTR 4.2.8R.

The interim report, including the responsibility statement in the preceding paragraph which is made in accordance with

DTR 4.2.10(1), was approved by the Board on 28 April 2011.

The Directors confirm that they have a reasonable expectation that the Company has adequate resources in existence

for the foreseeable future. Accordingly the Directors continue to adopt the going concern basis in the preparation of the

interim report.

The current Directors of Superglass Holdings Plc are as listed in the annual report for the year ended 31 August 2010

and on the Superglass Holdings Plc website www.superglass.co.uk.

By order of the Board

Alex Mcleod Tony Kirkbright

Chief Executive Officer Finance Director

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial

report for the six months ended 28 February 2011 which comprises the Condensed Consolidated

Income Statement, the Condensed Consolidated Statement Of Comprehensive Income, the Condensed Consolidated

Balance Sheet, the Condensed Consolidated Cash Flow Statement, the Condensed Consolidated Statement Of Changes

in Equity, and the related explanatory notes. We have read the other information contained in the half-yearly financial report

and considered whether it contains any apparent misstatements or material inconsistencies with the information in the

condensed set of financial statements.

This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting

the requirements of the Disclosure and Transparency Rules (DTR) of the UK's Financial Services Authority (UK FSA). Our review

has been undertaken so that we might state to the Company those matters we are required to state to it in this report and

for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than

the Company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are

responsible for preparing the half-yearly report in accordance with the DTR of the UK FSA.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRS as adopted

by the European Union. The condensed set of financial statements included in this half-yearly financial report has been

prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the

half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review

of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board

for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons

responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially

less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently

does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an

audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial

statements in the half-yearly financial report for the six months ended 28 February 2011 is not prepared, in all material

respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FSA.

M Ross

for and on behalf of KPMG Audit Plc

Chartered Accountants

191 West George Street, Glasgow G2 2LJ

28 April 2011

Superglass Holdings Plc

Thistle Industrial Estate

Kerse Road

Stirling

Scotland FK7 7QQ

Tel: 01786 451170

Fax: 01786 465663

www.superglass.co.uk