Superglass shares nosedive on growing UK housing slump

Published on Tuesday 1 July 2008 21:19

SHARES in insulation manufacturer Superglass dived 36 per cent yesterday after the company issued a profit warning off the back of the UK's housing slump.

The firm, which produces glass-wool housing insulation at its Stirling factory, also said the UK government's carbon emissions reduction target (Cert) programme had not been taken up as quickly as expected, pushing profits around 10 per cent lower than predicted.

But Superglass said in a trading statement that it had upped its advances into Europe in a bid to compensate for falls in the domestic market.

It said it had secured contracts in Europe which would stretch well into next year, but added that the increase was "insufficient" to compensate for the slippage in the UK.

Superglass floated on the London Stock Exchange last July. The listing was the biggest in Scotland since that of Standard Life – raising around 72.8m from investors.

Shares yesterday closed at 44p, down 25p – less than a quarter of the price they were selling at in September last year. But broker Brewin Dolphin yesterday reiterated its "buy" rating on the company, despite slashing its target share price to 100p from 180p.

Superglass chief executive John Smellie said: "We will not be massively down, but we have definitely seen a slowdown in UK business. When we realised there was likely to be a delay in Cert and a slowdown in the housing market generally, we decided to increase our presence in Europe which has now paid off."

Its European sales now account for 15 per cent of business – up from just 5 per cent last year.

Smellie added that the majority of Superglass's European business was in Scandinavia and eastern Europe and added he was still considering acquisitions in the area.