Troubled insulation manufacturer Superglass has warned investors about its “volatile” summer trading as it revealed how sales in its core markets remain depressed despite efficiency and emission-cutting programmes.
The Stirling-based firm said the uptake of retrofit measures under the UK Government’s energy-saving Green Deal initiative remains “very low”.
Its update comes despite a generally improving mood in the housing market and claims householders are spending more on furniture, fittings and DIY as confidence in the economy begins to return.
Superglass said the poor picture continued to put pressure on its margins.
“Sales volumes have been volatile throughout the summer months and overall market demand remains depressed, especially in the retrofit segment where the uptake of insulation measures under the Green Deal initiative remains very low,” the company said.
“Insulation measures completed in 2013 under Green Deal and ECO combined are running at between 80 and 90% below 2012 levels.
“Superglass has yet to see any sustained increase in demand from other primary market channels. The resultant impact on volume continues to put pressure on margins.”
The debt-laden company is also searching for a replacement for chief finance officer Allan Clow, who announced he would step down from his role for “personal reasons”. He will stay on until a replacement can be found.
Declan Billington, chief executive of John Thompson and Sons and a director of Superglass’ largest shareholder W & R Barnett, has been appointed to the board in a non-executive capacity.
Shareholders backed a multi-million-pound financial restructure earlier this year, after the firm reached agreement in principle over the refinancing of a £12 million debt it owes to Clydesdale Bank.
Under its terms, Superglass raised £12.2m through a fresh share issue with the help of existing and institutional investors, and transferred its listing to London’s AIM market.
Clydesdale was handed £6.5m of convertible shares which can be exchanged for ordinary stock after April 2015, £3m in cash proceeds from the stock issue and the right to receive half Superglass’ profits from 2014.
In addition, a £2.5m bank facility is to be converted into a non-amortising loan with a five-year term.
Superglass, one of Stirling’s major employers with about 170 staff on its books, said the deal would “transform the strength” of the company’s balance sheet but had warned that the likely alternative would be administration or insolvency.
Yesterday, the company said it had ended the year in a stronger-than-expected cash position.
It said its gross and net balances were “comfortably ahead of expectations” at around £8m and £5.5m respectively, with an overall outcome for the financial year in line with market expectations.