Accrol Share Discussion Threads

[stuffee] 05/10/2017 17:42

I find it scandalous that no apparent mention was made in the Admission Document re the apparent accident prior to the IPO potentially resulting in a H&S fine, now described as having material impact on the Company's cash position. I guess the uncertainty re cash impact and funding may be the principal reason for the suspension.

To answer a question above, I doubt any such fine could have been insured by the Company, albeit negligence by the relevant directors, vendors and advisors might be covered.

The Admission Document does confirm the vendor shareholders gave appropriate warranties and indemnities at the time of the IPO in May 2016.

I find it near inconceivable that the three Hussains, Majid, Wajid and Mozam, who founded and formerly managed Accrol, and trousered £20m from share sales, were not aware of this incident. So I guess the Company will have strong grounds for recovery from these individuals, albeit it might take ages to settle and Accrol must arrange funding until then.

I suggest Zeus may also be in the firing line. They may well have failed proper due diligence to inquire into this incident, probably too busy counting their fees. Zeus may well now be examining their insurance for negligence.

Let's hope the new CEO, Gareth Jenkins, appointed a month ago and with reasonable record, can clear out the rubbish and sort things.

[bookbroker] 05/10/2017 16:25

But unusual to suspend a stock over the banking covenants without knowing the full story, although its main lenders maybe getting cold feet, saw it with Silverdell, one minute everything cool, next minute it went to the wall!

[salchow] 05/10/2017 15:53

What Horndean says is that there is potential for over-reaction, i.e. once the share comes back to the market. I doubt whether this company is going bust. So it could go down to a level where it may become a bargain.

[bookbroker] 05/10/2017 13:44

No over-reaction, share suspended pending financial clarity, that is what is at issue, sounds like someone has been cooking the books! Appeared that revenue and margins sufficient, but the debt seems to have ballooned!

[horndean eagle] 05/10/2017 13:37

Its a bit shocking that any potential fine is enough to cause them to have bank covenant issues. Must be a few more nasties in there that need dealing with. Might be interesting when it returns. Potential for an over reaction.

[spob] 05/10/2017 12:33

i wonder if there is some kind of fund raising going on here

which might explain why shares are suspended

possible severe dilution for existing shareholders


no position here for me


just been watching since the ipo and because of simon thompson

but was never keen myself


little asset backing

free cash flow looked weak relative to reported earnings

sterling currency issues

[petes5] 05/10/2017 12:02

To think only a short while ago I was furious as my stops were taken out on the sharp drop before bouncing straight back. Glad I didnt buy back. All the best for those still in, a lot of IPOs recently seem to be pump and dump.

[garbetklb] 05/10/2017 11:13

They say the H&S fine could be significant when viewed alongside the ? £19m net debt which sounds pretty horrendous.

It's compulsory to insure against employees being injured - Employers Liability insurance. Which has, historically, been a v difficult & unprofitable line due to changes in society's expectations and long ago problems coming to light - asbestos, industrial deafness etc. It's not possible to insure against fines - it would be against public policy for people to be insulated from their actions. Insurance will/may cover legal costs, but not the fine.

[twistednik] 05/10/2017 11:04

Wow ...just shocking and no wonder there is a healthy amount of scepticism re recent IPOs!

A fund raise from equity holders potentially required but they won't be happy with the company coming back cap in hand so soon. A very big discount required I feel.

Squeaky bum time for shareholders...(sorry, couldn't resist a quip!)

[haroldthegreat] 05/10/2017 10:57

Disco Dave did you know about the accident ?
DiscoDave4 - 13 Aug 2017 - 14:43 - 132 of 153 - 0
Thanks TexasPete - Looks like their fx hedging helped to sustain their gross margin and mitigate increased costs associated with additional headcount, but unless sterling strengthens (pulp is traded in US$) or customers increase retail prices then it doesn't sound like they will be able to maintain margins.
Whilst revenue increased 14% their costs/expenses are outpacing growth in revenue, thus their operating profit reduced 12% and operating profit margin has reduced c 2%.
Still a sound business but may just sit on my hands a while longer with this one.
================================================

No longer sitting on my hands, have chopped them off as far as ACRL goes......has the makings of a profit warning coming IMO.

[bookbroker] 05/10/2017 10:55

Harold - clearly there should have been a caveat in the IPO statement about this case, but it is largely irrelevant in the bigger picture, it’s more the falling margin and rising debt at issue!

[haroldthegreat] 05/10/2017 10:52

Doesn't one have insurance against accidents.? Or can't one get cover against fines ?what was the nature of the incident ?

[jonwig] 05/10/2017 10:46

sailastra - perhaps you're right: I apaologise. In defence, when I read the statement at 7:00 it looked a bolt from the blue so I checked out the accounts - after all, I might have invested, and wanted to be sure whether I had or hadn't missed anything.

Anyway, Liberum have issued a note this morning and on balance suggest the profits fall may be sufficient to trigger bank covenants. This looks plausible, as these are often written in terms of EBITDA margins.

[deltrotter] 05/10/2017 10:38

Looks like they are behind on things

[sailastra] 05/10/2017 10:37

Jonwig, why comment when you have no idea, the statement says that they are unable to pass on rising costs to their big customers what we are waiting for is detail...Like you I do not own these but could very well have...But unlike you I am not prepared to gloat....
Good luck to those that do hold...The company appeared more than investable...This is the shape of things to come I fear...We should all take care, this market will take no prisoners..

[croasdalelfc] 05/10/2017 10:33

Accrol were in the running for IPO of the year 6 months ago -

[jonwig] 05/10/2017 10:30

I was just being droll, of course, bookbroker. A nice man delivers it at just the time we request. He insists he's only delivering to us, but my wife says he's having me on.

The press are already sharpening their wit. We'll be seeing a lot more of it.

FT: Toilet roll maker wiped off the market ...

[bookbroker] 05/10/2017 10:20

U must be a Waitrose man Jonwig in that case, or maybe Whole Foods or perhaps u do do ur weekly shop in the Harrods Food Hall, Lidl/Aldi rock especially for hygiene rolls! I’ll visit now and again, do not have any particular preference to where except Farm Foods!

[eastbourne1982] 05/10/2017 10:01

Steve Crossley.

How much did this guy get when this was floated ?

[value viper] 05/10/2017 08:55

bb, the last update was LESS than a month back on 7/ 9/17 and was in line !!

shocker to be hit with this this morning