Good morning! I've been reading for the last couple of hours, but haven't got round to writing anything as yet, so more caffeine is needed I think. Anyway, let's crack on.

 

 

Superglass Holdings (LON:SPGH)

Profit warning of the day comes from this maker of loft insulation material. It's been a tale of woe from this company for some time now. I reviewed this company three times in 2013, most recently on publication of their interim results on 19 Nov 2013, coming to the conclusion that it was too difficult to work out whether there was a viable business there or not.

This morning's trading update covers the half year to 28 Feb 2014. It refers to continuing "very challenging market conditions", with retrofit sales being soft (due partly to weak Government incentive schemes for people to insulate their homes). That is offsetting "encouraging signs" in the new build market.

Although they do hold out some hope of a turnaround in this bit;

 

On a more positive note, the Government's announcement contained a commitment to include low cost loft and cavity insulation measures under ECO and this is expected to be of material benefit to the Company in the next financial year.  

 

The company has also increased exports, and reduced costs, to combat weak trading in the UK.

Overall, the key part on profitability says;

 

... the overall trading performance of the business for the period, and for the full year to 31 August 2014, will be significantly below management expectations. There are no changes to management expectations for 2015. The Board still expects to return to positive EBITDA by the end of the second half of the year.

 

It was forecast to make a loss of about £3.5m this year (ending 31 Aug 2014), so being significantly below that means I am guessing it must be a loss of nearer £5m perhaps? (similar to last year, before one-offs). They have made cost cuts of about £5m annualised, although it's not clear how much of that has already happened, and how much is in progress.

If the best that can be hoped for is to reach breakeven in the foreseeable future, with hope that legislation might drive more demand, doesn't sound at…

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