Good afternoon!

Quite a lot to get through today. I'm provisionally going to cover the following stocks, and will revise based on the comments:



Accrol Group (LON:ACRL)

  • Share price: 43.5p (-67%)
  • No. of shares: 93 million (pre-Placing)
  • Market cap: £40 million (pre-Placing)

Proposed Placing of £18m and Lifting of Suspension

This loo roll cutter makes a return to the market after suspension over its debt problems.

It listed in June 2016. Yet another reminder of the danger of IPOs. It's amazing how often that something goes wrong in the first year or two. It's almost as if the sellers tend to be better at timing their trade than the buyers!

Covering this back in July, when everything was still rosy, I failed to forecast that things would fall apart here as quickly as they did. Indeed, I thought the debt multiples looked "very safe". Net debt was at £19 million, or less than twice EBIT for the past two years. But since the company was still only a year on the market, I added:

[It] will probably get more interesting when something goes wrong and the shares can be bought for a recovery!

Well, today is our chance to do that!

I recall some readers thinking that I was a bit generous when I speculated that the existing equity might be worth c. 40% of the level it was at pre-suspension. The money is being raised today at 38% of the pre-suspension price, so perhaps I was indeed too generous!

The price action on the exchange adds a further discount, putting the existing equity at 33% of its pre-suspension price.

Accrol's Chairman tells us today the company "believes it is through the worst".

The proposal is for 36 million new shares at 50p each, raising £18 million.

Trading Update

As you would hope and expect, we get some news about what is going on with the company's business in the last couple of months.

Accrol's major input, hardwood pulp,…

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