UK tissue converter Accrol Papers announces trading update ahead of its fiscal year-end financial results; company's preparation to investment in a paper mill is on track for the mill to be operational, positively impacting business in the H2 2025

Sample article from our Tissue & Hygiene

May 17, 2023 (press release) –

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

 

Accrol Group Holdings plc

("Accrol, the "Group" or the "Company")

 

TRADING UPDATE

FY23 results at least in line with market expectations & FY24 margins improving

 

Accrol (AIM: ACRL), the UK's leading independent tissue converter, announces the following trading update ahead of its Final Results for the year ended 30 April 2023 ("FY23" or the "Period"), which are scheduled to be released in late September 2023.

 

The Board is pleased to report that the Group's results for FY23 are expected to be at least in line with current market expectations.

 

Since the Interim Results on 24 January 2023, the Group has continued to perform strongly, gaining further market share through its great value product range, broad retailer base, and new routes to market. The Group has successfully navigated and mitigated the well-reported and substantial inflationary pressures on a broad range of input costs through further process efficiencies and by engaging constructively with its customers to pass-on these additional costs.

 

FY23 highlights

 

Adjusted EBITDA* expected to be at least in line with market expectations

Revenues ahead of market expectations at £241.8m (FY22: £159.5m) - up 52%

Adjusted net debt at 30 April 2023 lower than last year at £26.8m (FY22: £27.5m) - c.1.7x EBITDA (FY22: 3.0x) and is expected to reduce to less than 1.0x in FY24 through strong cash generation

Group volumes increased by 7.7%, compared to an overall flat tissue market with market share increasing to 21.5% (19.5% FY22)

Strong ESG progress with significant and tangible advances in all targeted areas

Gross margins continued to improve throughout the year with increased volumes in higher value products - the strong growth in the water industry approved flushable wet wipe business is especially pleasing

 

*   Adjusted EBITDA is defined as profit before finance costs, tax, depreciation, amortisation, separately disclosed items and share based payments.

Outlook

 

The Group is well positioned as it enters FY24 with margins expected to improve back towards pre-pandemic levels at a faster rate than previously reported as the Group benefits from the significant investments made over the last few years and the improving revenue mix

Prices are expected to soften in the year ahead, while volumes are expected to grow ahead of the overall private label sector

With all major capital investments now completed, the Group expects adjusted net debt to reduce to less than 1.0x in FY24 

The business has a further 20% of production capacity to support continued volume growth going forward

 

Paper Mill

 

The Group's preparation for its investment in a paper mill is progressing and we remain on track for the mill to be operational and positively impacting the business in the second half of 2025.  Further updates will be provided in due course.  As previously announced, the funding of this investment will come from existing cash reserves.

 

Gareth Jenkins, Chief Executive Officer of Accrol, said:

 

"Accrol is significantly well invested and fully automated. With our enviable customer base, broadening revenue streams, spare capacity and excellent levels of customer service, the Group is very well placed to take further advantage of the changing dynamics in consumer spending, which is particularly evident in the tissue market.

 

"We are pleased with the outcome for FY23 and look forward to the year ahead and beyond with increasing confidence."

 

 

For further information, please contact:

 

 

 

Accrol Group Holdings plc

 

Dan Wright, Executive Chairman

Via Belvedere Communications

Gareth Jenkins, Chief Executive Officer

 

Chris Welsh, Chief Financial Officer

 

 

 

Zeus (Nominated Adviser & Broker) 

 

Dan Bate / Jordan Warburton

Tel: +44 (0) 161 831 1512

Dominic King

Tel: +44 (0) 203 829 5000

 

 

Shore Capital Stockbrokers (Joint Broker)

Tel: +44 (0) 20 7408 4090

Malachy McEntyre/ Mark Percy / James Thomas

 

 

 

Belvedere Communications Limited

 

Cat Valentine

Tel: +44 (0) 7715 769 078

Keeley Clarke

Tel: +44 (0) 7967 816 525

 

accrolpr@belvederepr.com

 

Overview of Accrol

 

Accrol Group Holdings plc is a leading tissue converter and supplier of toilet tissues, kitchen rolls, facial tissues, and wet wipes to many of the UK's leading discounters and grocery retailers across the UK. The Group now operates from six manufacturing sites, including four in Lancashire, which together supply c.21.5% (volume) of the UK tissue market valued at c£2.5bn at retail sales value.

 

For more information, please visit www.accrol.co.uk.

 

Link for Accrol Today video: https://www.accrol.co.uk/our-business/

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END

 

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