THE woes of Superglass Holdings continued as the insulation maker warned there was little prospect of much improvement in a key market without a fundamental rethink of Government schemes that were intended to help cut carbon emissions.
Superglass, which employs 155 people at its Stirling base, revealed it made an underlying loss of £2.5 million in the year to 31 August as the company grappled with a range of challenges.
It made a profit of £0.4m in the same period last year.
Highlighting a 25% fall in revenues during the year, to £24.4m, from £32.4m last time, directors pinned much of the blame for the downturn on the actions of the Coalition Government.
They said demand for insulation for retrofitting in existing properties had slumped in the wake of the introduction of new schemes to encourage people to save energy.
"The continuing difficult trading environment reflects the collapse in activity as the government initiated CERT scheme was replaced by the ECO/Green Deal schemes," said Superglass.
Chief executive Alex McLeod noted industry estimates that less than 100 homes have been fitted with insulation under the Green Deal programme since its launch in January.
Around 1200 households applied to participate in the scheme by the end of October, compared with official projections of up to 10,000 in the first year.
Mr McLeod said the Green Deal scheme did not provide householders with sufficient incentive to fit insulation. It also funds double glazing and fuel-efficient boilers.
He said the Energy Company Obligation (ECO) scheme to encourage firms to fit insulation in the homes of people facing fuel poverty was focused on too narrow a range of properties and was complex to operate. Citing estimates that 7.1 million lofts and 5.3m cavities remain under-insulated, Mr McLeod said: "With current levels of activity it will take more than 50 years to complete all outstanding work without a fundamental re-think of current schemes."
Superglass's executive chairman, John Colley, said: " Our view now is that these schemes are unlikely to be materially improved until after the next General Election in 2015."
Mr McLeod suggested the Government could help drive demand under the Green Deal by levying a lower rate of Stamp Duty on the sale of homes that had insulation fitted.
He said the ECO scheme needed to be opened up to a much wider range of properties, rather than focusing on those deemed hard to treat.
Superglass has spent several years battling challenging conditions in the market to supply insulation for fitting in new homes, in which it has seen only early signs of recovery.
Mr McLeod warned low housebuilding activity and the transition from CERT to other schemes had led to a "surplus of UK-based insulation manufacturing capacity and highly competitive market conditions".
However, asked if there was a future for the business in Stirling, Mr McLeod said: "Yes, absolutely."
The company has completed a major upgrade of its production facilities, which helped it achieve £2.8m cost savings in the latest financial year. It expects to save £5m in the current year .
The upgrade will allow Superglass to produce insulation in a more compressed form, opening up possibilities in export markets.
It expects prices to begin to recover in the current financial year.
Finance director Allan Clow said: "We expect that during the course of this year we will move into profitability."
Mr McLeod noted Superglass recently completed a refinancing, to put it on a stable footing.
Shares in the Aim-listed company closed down 2p at 34p.
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