The struggling glass fibre insulation firm, Superglass, has dropped sharply after reporting increased losses and tough market conditions.
The firm was forced to launch a £20m fundraising in December, financed through issuing new shares and by turning debt into equity.
In the six months to the end of February revenue increased by 14% to £17.2m compared to the same period of 2011 but losses before tax increased to £0.8m, from flat earnings in the prior year. Superglass blames exceptional costs arising from the refinancing and tough market conditions.
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Part of the money raised will be spent on a new manufacturing plant, nicknamed Project Phoenix, but this is only described as proceeding "broadly" in line with the plan of completion by 2013.
The company has also revised its guidance for the full year; originally it had hoped earnings would pick up in the second half as uncertainty about its future was removed. It now appears to be backtracking, saying "the Board's view is that trading will continue at or around the current run rate for the second half of the year."
In other words, things are not getting noticeably better. In fact, sales volumes "are not likely to be as strong as originally anticipated."
John Colley, Superglass's Chairman says the company is "making progress in its turnaround." Investors do not agree. The stock has dropped 9% in morning trading, 96% in the last 12 months. Unless the new manufacturing plant delivers for Superglass, and crucially, gets built on time, then the firm's future looks deeply uncertain.
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