Accrol Group Holdings PLC Trading Update (1386Y)
January 12 2022 - 1:00AM
UK Regulatory
TIDMACRL
RNS Number : 1386Y
Accrol Group Holdings PLC
12 January 2022
12 January 2022
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 (AIM: ACRL), the UK's leading independent tissue
converter, today provides the following trading update for the
current financial year ending 30 April 2022 ("FY22").
In the period since the Company's last trading update of 20
October 2021, the Group has experienced further inflationary
pressure on input costs including pulp prices, supply chain costs
and most significantly energy costs. In light of these cost
increases, the Group has implemented further cost efficiencies and
has engaged with all its customers successfully securing
substantial price increases, over and above those secured in
mid-2021 and, as a result, the Board was confident of meeting its
revised expectations for FY22.
However, unavoidable surcharges to parent reel prices, relating
to exceptional energy price increases, have very recently been
levied on the Company, which will significantly impact margins. The
management team has experience of successfully managing
inflationary pressures and the Board is confident that this is a
timing issue and that further cost increases, including these
recent surcharges, will continue to be passed on successfully to
Accrol's customers. The underlying business is in good shape and
the Board remains confident in the medium-term prospects for the
Group.
Despite continued supply chain disruption, particularly at
ports, around the world and specifically in the UK, the business
continues to manage customer supply well, having secured and
maintained additional stocks in paper and finished goods.
In FY22, revenue is now expected to grow by 17% to c.GBP160m
(FY21: GBP136.6m), generating adjusted EBITDA(1) of c.GBP9.0m
(FY21: GBP15.6m) with margin recovery anticipated in FY23.
The Group continues to operate well within its existing banking
covenants and has more than sufficient liquidity to meet its
existing and future needs.
In light of the above and the short-term but inherent volatility
of earnings experienced in the current year, the Board has
concluded that it is now appropriate for Accrol to conduct a full
strategic review of its business. Such review will be designed to
capitalise on the evident strength of the business' market
position, its balance sheet, and its solvency, underpinned by
significant banking support, to ensure that the shareholder value
is optimised.
A further update will be provided with the Groups H1 2022
results, which will be announced on 18(th) January 2022.
(1) Adjusted EBITDA is defined as profit before finance costs,
tax, depreciation, amortisation, separately disclosed items and
share based payments
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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END
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