THE recently appointed chief executive of Superglass has voiced his confidence about the prospects of the insulation maker even as it warned a return to profitability has been delayed.
Ken Munro got the top job in June having been managing director of its trading subsidiary since February.
While he has only been running the plc for a matter of weeks he is pleased with the progress which is being made.
He said: “From my perspective I would say the business is in a better place than it has been for a very long time”.
Mr Munro pointed to infrastructure changes in June and July which allow the business to run two production lines from just one of the furnaces at its Stirling factory are already delivering savings.
He said: “It is a clever investment that allows us to deliver not far off what we would have delivered in capacity previously but for a significantly lower cost.”
Along with that Superglass is seeing margin improvements by focusing on supplying to the construction sector and bringing out new products.
The Stirling firm cited the progress in its long-running turnaround plan, which has seen more than £8m invested, stating it remained “broadly on-track”.
However it admitted a forecast of a return to underlying profit in the second half of this year would not be met.
Mr Munro said: “We are very clear that the losses will narrow significantly. The second half will significantly outperform the first half and the corresponding period last year.”
In the most recent period Superglass confirmed it has withdrawn from lower margin export markets along with certain low value domestic areas to focus on more profitable markets.
Sales volumes will be at a similar level to the first six months of its financial year while a pricing increase was put through in March.
Problems with the consistency of glass cullet, the key raw material for the insulation products Superglass makes, are said to have improved in recent months.
The AIM-listed company said it has worked with supplier Viridor to stabilise the supply but the issues had affected manufacturing costs in the period.
Mr Munro, who previously held management roles at NCR and Havelock Europa, said: “We are at the better end of that, no doubt. We are making progress.”
Mr Munro pointed to a new cavity wall insulation product launched in May which is proving popular in the new build housing market and which should make a contribution to results in the 2016 financial year. Further new products are in the pipeline.
He also signalled an end to Superglass hoping for government backed insulation schemes, such as the recently wound down Green Deal, to help deliver volume increases.
He said: “I caution against using the word excited but we are very positive and optimistic this [product] is going to further entrench us in what I would call commercially resilient revenue streams.
“If you followed this business over the years it was very dependent on government schemes and subsidies.
“This is all part of our plan of driving a major shift in our revenue away from schemes and subsidies towards commercial and construction. Our stated strategy is very much to focus on development and product innovation.”
The company said any alternative government insulation scheme had not been factored into its projections.
Superglass reported losses before interest, tax, depreciation, amortisation and exceptional items, of £3.1 million in the six months to February this year. Turnover in that period was £10.3m.
Shares fell sharply when the market opened before recovering to end the day 7.4 per cent ahead, up 0.25p to 3.62p.
Investor Peter Gyllenhammer remains the single larger investor in Superglass with a stake of more than 38 per cent.
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