Trading Update
16/05/2023 07:00
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RNS Number : 4750Z Accrol Group Holdings PLC 16 May 2023
16 May 2023
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
FY23 results at least in line with market expectations & FY24 margins
improving
Accrol (AIM: ACRL), the UK's leading independent tissue converter, announces
the following trading update ahead of its Final Results for the year ended 30
April 2023 ("FY23" or the "Period"), which are scheduled to be released in
late September 2023.
The Board is pleased to report that the Group's results for FY23 are expected
to be at least in line with current market expectations.
Since the Interim Results on 24 January 2023, the Group has continued to
perform strongly, gaining further market share through its great value product
range, broad retailer base, and new routes to market. The Group has
successfully navigated and mitigated the well-reported and substantial
inflationary pressures on a broad range of input costs through further process
efficiencies and by engaging constructively with its customers to pass-on
these additional costs.
FY23 highlights
● Adjusted EBITDA* expected to be at least in line with market expectations
● Revenues ahead of market expectations at £241.8m (FY22: £159.5m) - up 52%
● Adjusted net debt at 30 April 2023 lower than last year at £26.8m (FY22:
£27.5m) - c.1.7x EBITDA (FY22: 3.0x) and is expected to reduce to less than
1.0x in FY24 through strong cash generation
● Group volumes increased by 7.7%, compared to an overall flat tissue market
with market share increasing to 21.5% (19.5% FY22)
● Strong ESG progress with significant and tangible advances in all targeted
areas
● Gross margins continued to improve throughout the year with increased volumes
in higher value products - the strong growth in the water industry approved
flushable wet wipe business is especially pleasing
(*) Adjusted EBITDA is defined as profit before finance costs, tax,
depreciation, amortisation, separately disclosed items and share based
payments.
Outlook
● The Group is well positioned as it enters FY24 with margins expected to
improve back towards pre-pandemic levels at a faster rate than previously
reported as the Group benefits from the significant investments made over the
last few years and the improving revenue mix
● Prices are expected to soften in the year ahead, while volumes are expected to
grow ahead of the overall private label sector
● With all major capital investments now completed, the Group expects adjusted
net debt to reduce to less than 1.0x in FY24
● The business has a further 20% of production capacity to support continued
volume growth going forward
Paper Mill
The Group's preparation for its investment in a paper mill is progressing and
we remain on track for the mill to be operational and positively impacting the
business in the second half of 2025. Further updates will be provided in due
course. As previously announced, the funding of this investment will come
from existing cash reserves.
Gareth Jenkins, Chief Executive Officer of Accrol, said:
"Accrol is significantly well invested and fully automated. With our enviable
customer base, broadening revenue streams, spare capacity and excellent levels
of customer service, the Group is very well placed to take further advantage
of the changing dynamics in consumer spending, which is particularly evident
in the tissue market.
"We are pleased with the outcome for FY23 and look forward to the year ahead
and beyond with increasing confidence."
For further information, please contact:
Accrol Group Holdings plc
Dan Wright, Executive Chairman Via Belvedere Communications
Gareth Jenkins, Chief Executive Officer
Chris Welsh, 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
Shore Capital Stockbrokers (Joint Broker) Tel: +44 (0) 20 7408 4090
Malachy McEntyre/ Mark Percy / James Thomas
Belvedere Communications Limited
Cat Valentine Tel: +44 (0) 7715 769 078
Keeley Clarke Tel: +44 (0) 7967 816 525
accrolpr@belvederepr.com
(https://url.avanan.click/v2/___mailto:accrolpr@belvederepr.com___.YXAxZTpzaG9yZWNhcDphOm86M2MwYTQzNTFkNjBlNWI1NDY2ZDFlOGIzNGQ3MTQ2NTk6NjplZDQ5Ojk3ZmU0NGJlODE2ZDNiMDY2MTFjZmNmNjcyYWE3MDMwY2YzZWU3MGQxNjlkOGFkMzY3ZmE4NzA1ZGEyNWY4MmU6cDpU)
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 c£2.5bn at
retail sales value.
For more information, please visit www.accrol.co.uk
(https://url.avanan.click/v2/___http:/www.accrol.co.uk/___.YXAxZTpzaG9yZWNhcDphOm86M2MwYTQzNTFkNjBlNWI1NDY2ZDFlOGIzNGQ3MTQ2NTk6Njo0YzVkOmEwY2Q0OTZhMWE2YTM0NjE1YjlkMjAyNGQ1ZmI2M2FhNjlmZTFkZjE5Mzk5OTdiNjA3Zjk3MzBkMTBmOTU4ZWM6cDpU)
.
Link for Accrol Today video: https://www.accrol.co.uk/our-business/
(https://url.avanan.click/v2/___https:/www.accrol.co.uk/our-business/___.YXAxZTpzaG9yZWNhcDphOm86M2MwYTQzNTFkNjBlNWI1NDY2ZDFlOGIzNGQ3MTQ2NTk6NjoxZGMxOmJjYmM3OTRhZjZiZGRhOTUxZmJiZDU4YmUwYmMzYzgxOTBlZDlkMTVkMzkxMDIzMWI0NDNiMTEwZGExMTg1ZDg6cDpU)
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