SUPERGLASS has said a drop in production following its transition to a higher margin business is the reason for a £1.8 million half year loss before tax.

The loss was an improvement on the same period last year, when the Stirling-based glass wool manufacturer posted pre-tax losses of £3.1m.

Sales at Superglass were £10.5m for the six months ending February 29, marginally down on the same period last year, but the average selling price was up four per cent, which reflected the planned transition in business and product mix.

Superglass also attributed the revenue boost to two separate price increases, in March 2015 and February 2016, and the introduction of new, high value products such as blown cavity wall insulation Superwhite 34.

Production costs per tonne were down nine per cent and distribution costs were down 22 per cent, when compared to the same period last year.

Chairman Mark Cubitt said the company’s ongoing 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 it had targeted.

“It is expected that the selling price increase seen in recent months will be sustained and planned volume growth realised, along with the delivery of incremental cost savings,” he said. “The overall trading performance of the business continues to be broadly in line with management expectations.”

Superglass said it expected to return to positive earnings before interest, tax, depreciation, amortisation and exceptional items for the first time since 2012.

Shares closed up seven per cent at 3.75p. The company said that while it intends to resume the payment of dividends when “profitability, cash generation and underlying growth of the business so justifies” it did not anticipate doing so in the current financial year.