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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.£160m (FY21: £136.6m),
generating adjusted EBITDA(1) of c.£9.0m (FY21: £15.6m) 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 £2.1bn UK retail tissue market.
For more information, please visit www.accrol.co.uk
(http://www.accrol.co.uk/) .
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