Accrol Group Holdings PLC Trading Update (5942P)
October 20 2021 - 1:00AM
UK Regulatory
TIDMACRL
RNS Number : 5942P
Accrol Group Holdings PLC
20 October 2021
20 October 2021
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
Accrol, the UK's leading independent tissue converter, provides
a trading update for the current financial year ending 30 April
2022 ("FY22").
In line with the wider market, pressures on the Group's raw
material supply chains have been considerable with further
tightening in recent weeks. Pulp and parent reel production costs
have been impacted across the world by energy cost increases, input
shortages, and general inflationary pressures. Whilst the Group's
supply chain has shown significant resilience and supply shortages
have been managed, considerable cost increases had to be absorbed
in the short term. In addition, distribution pressures, notably the
availability of HGV drivers, which served to increase costs
further, have restricted revenue growth in FY22.
These cost increases are successfully being passed on, albeit
there will be a time lag in passing on the full impact, resulting
in earnings in FY22 being lower than previously expected. Overall,
operational efficiencies and integration synergies, together with
the successful passing on of cost increases, will enable the Group
to deliver FY22 percentage EBITDA(1) margins in line with those
achieved in FY21.
The market share recovery of the UK discount retail sector
within the hygiene category continues to see slow but steady
improvement. The Group is maintaining its discipline of targeting
only higher value business and avoiding long-term fixed price
agreements, especially in this period of volatility. This continues
to ensure that revenue growth is of good quality.
As previously indicated, revenues and earnings for FY22 remain
weighted to the second half of the financial year. The Board now
expects year-on-year revenue growth to be c.25% on FY21 (FY21:
GBP136.6m) and adjusted EBITDA(1) in FY22 to improve by c.20%
(FY21: GBP15.6m).
The short-term external challenges facing the business have no
effect on the ongoing execution of the Group's strategy. The
business remains in excellent operational shape with scalable
foundations for growth and a strong market position across UK
retail. Accrol remains well placed to benefit from the ongoing
recovery in volumes in the discount sector and a more stable cost
environment, as the full effects of the pandemic and broader supply
chain and distribution constraints unwind.
The Group continues to operate within its banking covenants and
the Group's liquidity and cash flow position remain robust with
adjusted net debt(2) expected to remain in line with current market
expectations.
A further update will be provided at the Group's H1 22 results,
which will be announced in mid-January 2022.
(1) Adjusted EBITDA is defined as profit before finance costs,
tax, depreciation, amortisation, separately disclosed items and
share based payments
(2) Adjusted net debt excludes operating type leases recognised
on balance sheet in accordance with IFRS 16
For further information, please contact:
Accrol Group Holdings plc
Dan Wright, Executive Chairman Via Belvedere Communications
Gareth Jenkins, Chief Executive Officer
Richard Newman, Chief Financial Officer
Zeus Capital Limited (Nominated Adviser
& Broker)
Dan Bate / Jordan Warburton Tel: +44 (0) 161 831 1512
Dominic King Tel: +44 (0) 203 829 5000
Liberum Capital Limited (Joint Broker) Tel: +44 (0) 20 3100 2222
Clayton Bush / Edward 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. Following the recent acquisitions of LTC in
Leicester and JD in Flint, North Wales, the Group now operates from
six manufacturing sites, including four in Lancashire, which
generate revenues totalling c.16% of the GBP2.1bn UK retail tissue
market.
For more information, please visit www.accrol.co.uk.
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