Independent insulation manufacturer Superglass Holdings plc maintained its revenue for the latest financial year, inching sales volumes up by 3%.
The results, for the year ended 31 August 2012, show that profit before tax and after amortisation of intangibles and exceptional items at £6.8m, compared with 2011’s loss of £5.0m). The results include a significant exceptional credit arising primarily from the refinancing carried out this time last year.
This year has seen the appointment of a new chairman, finance director, sales director and engineering director.
Chairman John Colley, said: “Superglass continues to make progress in its turnaround despite the difficult market conditions. With additional financial headroom and the investment programme set to deliver up to £5.0m per annum of cost savings, the Group is well positioned to capitalise on expected long-term market growth derived from a construction industry recovery and a fully established Green Deal framework.”
Chief executive Alex McLeod says that the implementation of Project Phoenix – the capital investment programme that was central to the refinancing completed on 5 December 2011 – is progressing well. New fiberising technology is due to be implemented and this will improve product quality and provide up to an additional £1.4m of cost reductions as well as bringing the cost savings from Project Phoenix to a total of up to £5.0m per annum
He says: ” The trading performance for the year fell short of our original forecasts due to weaker than expected construction and CERT markets. Trading was also impacted by the loss of share in cavity wall insulation following a change in sourcing policy by our sole outlet for blowing wool, Insta. It is estimated that turnover has been reduced by £0.8m as a consequence.
“Market conditions in the UK continue to be extremely challenging and difficult to predict. The decline in CERT related sales appears to have levelled off and activity since the end of the financial year has strengthened as energy suppliers make a final push to attempt to achieve the targets due for completion by the end of this calendar year.
“It is likely that some energy suppliers will not achieve their CERT targets by the end of December 2012 and this has been a major contributing factor in our trading performance in the second half of the year. OFGEM, which monitors the delivery of the CERT programme, has indicated a willingness to accept delivery of additional measures after 31 December 2012. This is welcome news and will assist in the transition to Green Deal.
“The Board believes that Green Deal represents a significant opportunity for growth in activity levels but, like many other members of the insulation industry, the Board remains very cautious about the immediate prospects for large scale take up of Green Deal measures for so long as such measures require a substantial cash investment by the consumer.”
McLeod reports that the company has had some success with focussing on value-added products, particularly in the newbuild sector with sales volumes of these products up 25% on the previous year.
“Value added solutions now represent 10% of our domestic sales volumes compared to 8% in the previous year, driven by increased specification activity with key housebuilders including Barratts and Redrow and the introduction of new and unique solutions for specific applications. Whilst the outlook for construction markets remains relatively weak for 2013, private housing is expected to show stronger growth, supported in part by Government initiatives. Superglass is well positioned to continue to show growth in housing.
“Repair, maintenance and improvement markets were broadly in line with last year. Superglass volumes were 3% ahead of the previous year which is slightly ahead of market growth, due in the main to the acquisition of new customers. Superglass now supplies more than 70% of independent builders merchants in the UK.”