Reduced CERT take-up hits Superglass sales
Published: 25 July, 2012
STIRLING: Superglass, a leading independent manufacturer of glass fibre insulation solutions, reported net sales in the second half of the current financial year to be lower than anticipated.
Sales, said the company at the time of the announcement of its interim results, will be below the level reported for the first half. Average daily sales tonnages declined since the relatively strong performance in March.
This decline, which is due primarily to the reduction in CERT-related sales, has been partly offset by an improvement in the average selling price for a tonne, said Superglass.
The board said it expected the company's performance in the second half to be below that in the first half, as Superglass continues its turnaround and implements its cost reduction programme.
Market conditions in the UK are extremely challenging and difficult to predict, Superglass reported in its interim results announced on 24 April 2012. Trading in the period since then has been disappointing and demand in the market is subdued, Superglass reported.
In particular, sales through CERT-related activity have been disappointing, confounding industry expectations after the improvement seen in the early part of 2012. In addition, activity levels in the construction sector have, as has been reported in the national press, been adversely affected by the poor weather and the unusually large number of bank holidays.
Superglass said it is aggressively attacking its cost base. The cost reduction programme remains focused on Project Phoenix, the capital investment programme that was central to the refinancing completed on 5 December 2011.
Superglass has additionally identified potential enhancements to Project Phoenix. When combined with other cost-saving actions to be taken this should, when implemented, reduce the cost base by up to £5m for a full financial year, bringing the company's previously high cost base in line with what is believed to be the industry norm.
Cost savings are expected to start to impact meaningfully in the year ending 31 August 2013.
With no sign yet of an improvement in the market, there continues to be great uncertainty over the transition from CERT to the Green Deal when the former expires at the end of 2012.
The strategic objective remains to migrate Superglass into a lower cost, higher quality producer of glass fibre insulation solutions with an emphasis on selling its products into the construction sector, the company stated.