SUPERGLASS Holdings has posted another year of hefty losses and pinned much of the blame on the failure of Government efforts to boost demand for the kind of insulation it makes.
However, the company, which employs 150 people in Stirling, reckons growth in the housing market supported by the official Help To Buy scheme will provide a spur to growth.
A month after completing a refinancing to shore up its finances, Superglass announced it made a pre-tax loss of £6.8 million in the year to August 31 compared with £7m in the preceding year.
Revenues fell by around four per cent annually, to £23.5m, from £24.4m, reflecting what Superglass said was a challenging trading environment since the "collapse" of the Government initiated Energy Company Obligation and Green Deal schemes.
As the ECO requires energy firms to help householders cut bills while the Green Deal provides loans towards the cost of suitable products, the programmes were expected to play a big part in reducing carbon emisions. Aim-listed Superglass has long complained that take up rates have been very low.
In yesterday's results announcement the company's executive chairman, John Colley, gave a withering assessment of the schemes.
He said: "Despite the fact that there remain a large number of under-insulated residential buildings in the UK, and that loft and cavity wall insulation is one of the most cost-effective ways of improving energy efficiency and reducing carbon emissions, the structure of the current schemes has resulted in substantially reduced demand."
Mr Colley, added: "Our view is that there is not likely to be any meaningful change to Government policy on energy efficiency until after the next election."
The weakness of demand for insulation for retrofitting in existing homes has posed big challenges for Superglass, which focused on that market.
When the company announced plans to raise £6.25m from investors before expenses last month Superglass said it expected over-capacity to exist in the market for some time.
Yesterday chief executive Alex McLeod said the company has identified potential further cost savings, of around £1.9m, which would include a significant reduction in manufacturing capacity.
Asked about the implications for jobs, he said: "We remain committed to protecting the 150 jobs in Stirling. The primary objective with reducing unutilised manufacturing capacity is to improve operational efficiency of our plant."
Mr McLeod said Superglass has been reaping rewards from its decision to shift attention to the market to supply insulation for new buildings.
Noting that new build housing completions in 2014 are estimated to be more than 15 per cent ahead of last year, he said: "Further strong growth in this market channel is expected to continue, driven by Government support for the housing market.
"The extension of the Help to Buy scheme to 2020, combined with changes to Building Regulations in England and Wales in 2013, are expected to be strong drivers of growth in future for the Company."
Mr Colley said the company had made good progress in the latest period. Superglass raised £5.7m equity funding last month net of expenses. Swedish investor Peter Gyllenhammar provided £3m before expenses and took a 38.9 per cent stake in the firm.
He was exempted by Superglass shareholders from the requirement to make a bid for the firm.
Superglass secured bank facilities of up to £4.8m after switching its bank from Clydesdale to Close Brothers.
When announcing the fund-raising the company said its cash balances had eroded to the point where it may "struggle to absorb any further material trading losses in the near term".
Superglass achieved positive earnings before interest, tax, depreciation, amortisation and exceptionals in July and August, but is not yet generating net cash on a monthly basis.
It had £3m cash at August 31.
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