Trading update

Superglass hikes prices and cuts costs to reduce losses

Ken MunroSuperglass Holdings the Stirling-based manufacturer of glass wool and mineral fibre products, said it had cuts costs and raised prices as part of its turnaround plan.

It now expects its EBITDA loss to fall from £1.4 million a year ago to about £500,000 in the first half.

The company has compensated for a 2% fall in sales volumes with an average 4% increase in prices year-on-year,  which it says reflects a planned transition in business and product mix and is in line with price increases by other glass manufacturers.

It has secured a number of new customers in the contract and merchant sectors.

Cost of production is down by 9% per tonne and distribution by 22%. Gross cash at the 29 February period end of £2.4m provides “adequate cash headroom”.

Jan Holmstrom has been appointed to the board as the representative of Peter Gyllenhammar AB, the group’s largest shareholder

The company said the turnaround plan “remains on track”, with the delivery of planned cost savings and the continued repositioning of the business towards growing construction markets and higher value added products now yielding the positive margin improvements targeted.

Notwithstanding seasonal affects and adjustments to stock, the group has been trading at break even or positive EBITDA on a monthly basis.

It said prices were increased by all UK glass wool manufacturers from 1 February, although it will take some time to confirm the extent to which this increase will hold in a market which, to a degree, remains highly price competitive.

The company’s recently-launched blowing wool solution for new build housing, Superwhite 34, has gained traction in the market, with a number of national and regional contractors now stocking it.

It has established trading relationships with several substantial customers, as a consequence of the broader range of solutions the group is now able to supply.

The cost savings anticipated following the closure of one of its furnaces were exceeded and a number of additional cost saving initiatives have been implemented in relation to raw materials, energy consumption and logistics.

As previously outlined, Superglass continues to work closely with its waste glass supplier to implement a long-term solution to provide a reliable supply of cullet of the desired quality specification. Stability and consistency of supply have been maintained and the board remains confident that a sustainable improvement in cullet quality will be achieved.

The company said it remains on track to deliver positive EBITDA for the current financial year as a whole, in line with management’s expectation.

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