TIDMACRL

RNS Number : 6598G

Accrol Group Holdings PLC

21 November 2022

21 November 2022

Accrol Group Holdings plc

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

HALF YEAR TRADING UPDATE

On track to deliver FY23 results at least in line with market expectations*

Accrol (AIM: ACRL), the UK's leading independent tissue converter, announces the following trading update ahead of its Half Year Results for the six months ended 31 October 2022 ("H1 FY23" or the "Period"), which are scheduled to be released in late January 2023.

The Board is pleased to report that the Group performed strongly in H1 FY23, delivering substantial growth in volume, revenue and profit, as well as further strengthening its market position. The Group continues to demonstrate its resilience against the challenges of input cost inflation, successfully leveraging its supply position with customers to recover all additional costs in the Period.

Net debt at 31 October 2022 was lower than anticipated at c.GBP30.5m, despite a significant increase in tissue stocks as the Group continued to manage uncertainty in its supply chains and the effect of strikes at UK ports. The Group expects this working capital position to improve in H2 FY23 to deliver a further reduction in its net debt position ahead of current market expectations* for FY23.

H1 FY23 highlights:

 
 --   Revenue up 64% to GBP121.1m (H1 FY22: GBP73.7m), with volumes 
       increasing by 14% in the Period 
 --   Accrol's market share by volume increased further to c.21.5% 
       (FY22: 19.5%), compared to a flat overall UK market 
 --   As announced in the Group's Final Results FY22 in September, 
       private label volumes are now higher than pre-pandemic levels 
       - market share growing at an unprecedented rate against 
       that of the traditional brands (Q1 FY23: 54% vs Q1 FY22: 
       50%) 
 --   Private label sector has strengthened further since the 
       Final Results and Accrol volumes have continued to grow 
       ahead of overall UK market with private label market share 
       standing at c.46% (FY22: 44%)

Outlook

The Group's main market, the discount retailers and private label products continue to grow strongly, driven by the cost-of-living crisis.

The Group has delivered substantial growth in the Period and the Board is increasingly confident that the growth trajectory of the business is sustainable. The volume growth in H1 FY23 is expected to continue as consumers move away from high-cost, low-value branded products in search of best-value.

Whilst mindful of the wider economic uncertainties, the Group's model is robust, and the Board considers the Group to be on track to deliver results for the full year ended 30 April 2023 ("FY23") at least in line with market expectations* with net debt reducing ahead of expectations to c.1.5x EBITDA by the end of FY23 (FY22: 3.0x).

* For the purpose of this announcement, the Group believes market consensus for FY23 to be revenue of GBP213.5m, adjusted EBITDA of GBP15.0m, adjusted PBT of GBP7.1m and net debt of GBP26.3m.

Gareth Jenkins, Chief Executive Officer of Accrol, said:

"We are clearly very pleased with these set of results where we have seen volume growth of 14% against a flat overall UK market performance over the same period. We have delivered this by having great quality and value products that meet every consumer's budget. Our strong relationship with the retailers and our robust supply model is ensuring we can continue to deliver a strong set of results in a difficult market environment."

 
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 (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. 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 cGBP2.5bn 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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