Accrol Share Discussion Threads

[blueball] 17/5/2023 18:20

Trading 56% below fair value.

[blueball] 16/5/2023 11:15

I'm in today share wise that is.



Buy.

[darrin1471] 16/5/2023 08:19

4 x 180,000 at 36.7p just traded

[this_is_me] 16/5/2023 07:21

Great trading result, Management have done really well to navigate macro problems so well.


-- Adjusted EBITDA* expected to be at least in line with market
expectations
-- Revenues ahead of market expectations at GBP241.8m (FY22:
GBP159.5m) - up 52%
-- Adjusted net debt at 30 April 2023 lower than last year at
GBP26.8m (FY22: GBP27.5m) - 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)
-- 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

[darrin1471] 16/5/2023 07:09

Trading update

Adjusted EBITDA* expected to be at least in line with market expectations .

Net debt "is expected to reduce to less than 1.0x in FY24 through strong cash generation"

Gross margins continued to improve throughout the year with increased volumes in higher value products

"margins expected to improve back towards pre-pandemic levels at a faster rate than previously reported"

[chinahere] 15/5/2023 22:22

Ha. Shoezone are always 'closing down' - they walk to cheaper leases nearby.

If this doesn't pan out I'll be on my uppers. lol.

[arbus5000] 15/5/2023 22:02

you've somewhat wrong footed me here.

i googled them and the sponsored shopping results are from Shein, and the first question/answer by google is "Is shoezone closing down". Its financials are similar to accrol's tho.


Will be interesing to see how it pans out!

[chinahere] 15/5/2023 21:04

Now I'm in here it will go down the pan...

[chinahere] 15/5/2023 21:04

Not as bad as Shoezone - they had so many puns and then to top it off they only employed foot-related financial officers! It was a step too far. If I were involved I would have put my foot down and stamped it all out.

[arbus5000] 15/5/2023 19:51

in the intersts of balance though, one of the main downsides of this stock are the almost infinte puns about toilets & toilet paper. They tend to pop out more on negative news, e..g 'Loo roll maker sees profits flushed down the toilet' etc

[darrin1471] 15/5/2023 19:13

The Q&A at 20:00 says ACRL will benefit on the "flipside" as prices fall. It is a minute long answer which I keep on going back to check.

[chinahere] 15/5/2023 17:34

Cheers darrin1471 - yes thanks for the tip and I agree.

Didn't they say £80m increased costs has been passed on to the customer and your pulp link implies that those costs are being unwound so it should help the bottom line.

[darrin1471] 15/5/2023 16:49

chinahere. I hope it works out for us both. I am very overweight in ACRL.

[chinahere] 15/5/2023 16:12

Thanks - yes I did skim it but just watched it all again.

Am not sure what the long-term outlook is for them but I can see that they may surprise the market to the upside in the short-term so have bought in.

[darrin1471] 15/5/2023 13:56

chinahere. Did you watch the last webcast?

[arbus5000] 15/5/2023 13:50

A lot of management put in their own funds in a capital raising a few years ago which was a positive sign for me at the time. He sold at 25 but the share price has gone up since then....

[darrin1471] 15/5/2023 13:49

In H1 annualised cost inflation was reported as +£80m.
Any price stickiness will equal a big improvement in margins.

[darrin1471] 15/5/2023 13:41

CEO share sale is hard to reconcile if his outlook is correct.
He has been a regular seller in the past:
19/12/2022 Gareth Jenkins 1,000,000 @ 28.00p £280,000.00 Sell
16/07/2021 Gareth Jenkins 3,741,346 @ 0.00 0.00 Transfer To Wife
13/01/2021 Gareth Jenkins 1,333,000 @ 70.50p £939,765.00 Sell
23/11/2020 Gareth Jenkins 4,437,436 @ 44.00p £1,952,471.84 Sell
Chairman has been a buyer only:
03/03/2022 Dan Wright 250,000 @ 19.85p £49,625.00 Buy
03/03/2022 Dan Wright 750,000 @ 19.50p £146,250.00 Buy
23/11/2020 Dan Wright 194,180 @ 44.00p £85,439.20 Placing
23/11/2020 Dan Wright 5,700,738 @ 0.10p £5,700.74 Option
28/01/2020 Dan Wright 1,000,000 @ 38.00p £380,000.00 Buy
25/04/2019 Dan Wright 607,500 @ 24.50p £148,837.50 Buy
27/03/2019 Dan Wright 100,000 @ 21.50p £21,500.00 Buy
11/02/2019 Dan Wright 150,000 @ 20.50p £30,750.00 Buy
22/01/2019 Dan Wright 400,000 @ 15.86p £63,440.00 Buy
08/06/2018 Dan Wright 71,807 @ 15.00p £10,771.05 Buy
01/06/2018 Dan Wright 1,333,333 @ 15.00p £199,999.95 Placing
08/02/2018 Dan Wright 215,168 @ 36.00p £77,460.48 Buy
11/12/2017 Dan Wright 200,000 @ 50.00p £100,000.00 Buy

[chinahere] 15/5/2023 11:48

Thanks, so there should be £3m from reduced costs and the benefits from the investments and the input cost reductions.

But they still haven't made any cash profits so far and the CEO sold 25% of his holding at 25p didn't he. I realise share sales are for many reasons but I am asking questions to put me off investing lol.

[darrin1471] 15/5/2023 10:02

Future £3.0m pa
FY23 unsure. Between £3-£6m
FY22 £6.2m
FY21 £8.6m

[chinahere] 15/5/2023 09:10

I should look but does anyone know roughly how much Capex they have spent over the last few years?

[darrin1471] 14/5/2023 20:57

chinahere, Accrol have been growing by volume and revenue and going forward Gareth wants to use the existing diverse UK customer base to introduce new products.
Investment has been significant but input costs have been the big drag on profits over the last 18 months.
The immediate upside is the outlook in the year end update which as in-put prices fall will not only restore margins to normal levels but some price stickiness may lead to abnormally high margins. Although I would not expect them to shout this from the rooftops or customers will push through price reductions.
FY23/24 cash generation will be "quite profound" as capex on automation is complete and debt should fall rapidly. Debt guidance may be in the YE update or we may have to wait for the full update later in the year.
Looking at recent history, acquisitions may lead to additional debt or additional shares being issued if ACRL share price is at a much higher level.
Gareth has a M&A track record at DS Smith and that is where I see his ambitions being with ACRL. For that he will need a strong share price.

[arbus5000] 14/5/2023 18:19

the revenue as reported in 2018 included away from home products, which Acroll exited in 2018 - it was a low margin business. The reported revenues in 2018 excluding these is only £115m.

[arbus5000] 13/5/2023 13:46

good analysis !

having a manufacturing base with good transport links is also a big plus.

Its not my largest holding, but i've got a position