SUPERGLASS, the insulation maker which employs 150 people in Stirling, has said its turnaround programme is on track with the company on course to make a full year trading profit after cutting first half losses by around 75 per cent.
The company said it expects to post a £0.5 million loss before interest depreciation and amortisation (EBITDA) for the six months to 29 February compared with £1.9m in the preceding year as efforts to reshape the business bear fruit.
Stock market-listed Superglass sustained heavy losses after focusing much effort on markets that were driven by Government sponsored schemes for which take up rates proved to be very low. These included the supply of insulation for retrofitting in existing homes.
New chief executive Ken Munro has repositioned the business to focus on markets that he believes offer better prospects, including the supply of insulation for use in new homes.
In an update on trading, Superglass said lower margin sales have been replaced by more profitable business offering greater growth opportunities. The new Superwhite 34 product for new build housing has won business from a number of national and regional contractors.
Superglass has benefited from a four per cent increase in average selling prices after reducing capacity to focus on higher margin business.
The company cut average production costs by nine per cent per tonne annually in the first half helped by cost saving initiatives including the closing of one of its furnaces and “favourable energy pricing”.
Distribution costs fell 22 per cent following a strategic review of the outbound logistics operation.
Superglass said it has been achieving break even or better at the EBITDA level in recent months.
It told investors: “The Group remains on track to deliver positive EBITDA for the current financial year as a whole, in line with management’s expectation … and continues to trade with adequate cash headroom.” It lost £2.3m on the EBITDA measure before exceptionals in the year to 31 August.
Swedish investor Peter Gyllenhammar acquired a 38 per cent stake in Superglass in 2014, when he invested £3m in the firm. Jan Holmstrom joined the board last month as his representative.
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