UNDER-pressure insulation manufacturer Superglass revealed it fell to a loss last year and unveiled more details of the £6.5 million revamp plan for its Stirling plant after its bankers gave managers two years to turn the company around.
As expected, Superglass which has faced furnace problems, rising energy prices and lower than expected demand from utility company schemes, turned in an underlying pre-tax loss of £600,000 for the year to August 31, after a £3.7m profit in 2010.
On a statutory basis the loss amounted to £5m.
Superglass last week received shareholder approval to proceed with a restructuring that saw it raise £8m from investors and handed Clydesdale Bank convertible shares in place of £12.15m of debt.
The bank further agreed not to ask for repayments or test covenants on the remaining £5.1m debt for two years.
Superglass also received a £2m Government grant.
Chief executive Alex McLeod told The Herald: "What we have achieved here with the equity issue and the capital restructuring is transformational.
"As of December 2 this is a different business.
"We have now got seed capital to deliver the turnaround. We have got a window to achieve that through the breathing space Clydesdale Bank has given us and, importantly, through this we will protect 187 jobs."
The revamp of its plant will start in March and is expected to be completed a year later. Superglass anticipates reaping savings from the upgrade from 2012.
"This programme gets us back in the game," Mr McLeod said, noting that currently its plant is "significantly behind the competition" in efficiency.
The upgrade should also give the company room to boost production 10% from the current 50,000 tonnes a year.
"We expect to retain and possibly grow our staff in the coming years," Mr McLeod said.
He said the plant revamp will knock up to £1m off its annual £5.5m energy bill while savings will total £3.6m in all.
The transport of materials through the plant and the way its glass wool insulation material is packed will be improved.
However, there could be a knock to earnings in 2012, Superglass warned, as it plans to take around half the plant offline for up to four weeks next summer.
Superglass has faced subdued demand from the Government-backed Carbon Emissions Reduction Target Scheme, under which energy companies subsidise installation in customer homes.
But Mr McLeod said CERT demand is improving while pricing has also stabilised.
Superglass's shares fell 0.75p or 2.8% to 25.75p.
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