Accrol Group Holdings PLC Trading Update (0320M)

TIDMACRL

RNS Number : 0320M

Accrol Group Holdings PLC

06 May 2020

The information contained within this announcement is deemed by the Group to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

6 May 2020

Accrol Group Holdings plc

("Accrol", the "Group" or the "Company")

TRADING UPDATE

For the full year ended 30 April 2020

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 2020 ("FY20" or the "Period").

The Group continued to perform well in the final quarter, achieving accelerating monthly exit run-rates in line with the Board's expectations. Accordingly, the results for FY20 are expected to be in line with market expectations.

FY20 financials

Total revenues in FY20 were c.GBP133.8 million with core revenues increasing during the Period by 13.7% to GBP132.7 million (FY19: GBP116.7 million), compared with overall market growth of circa 8%. Net debt(1) continued to reduce ahead of market expectations, ending the Period at GBP17.9 million, compared with GBP24.8 million at 31 October 2019 and GBP27.1 million at 30 April 2019.

COVID-19 update

The Group initiated a rapid and early response to the global spread of COVID-19, implementing a management strategy throughout the business to protect the health and wellbeing of its people:

 
 --   All at risk employees were self-isolated at home from 20 
       February 2020; 
 --   Social distancing was implemented for factory-based employees; 
 --   Increased cleansing facilities and protocols were established 
       across all sites; and 
 --   All office-based staff were moved to working from home at 
       lockdown. 
 

The Board is pleased to report that this strategy is working well and that strong levels of productivity have been maintained throughout the lockdown restrictions. There has been no requirement to furlough employees.

Outlook

With margins significantly recovered and core revenues at record levels in FY20, the Group has entered the new financial year in a stronger position than ever before and is well positioned to continue delivering sustainable profitable growth.

Further improvements to quality and service have been made in recent months. The Board is confident that this will help Accrol secure higher-value business over the longer term. In addition, the Group's rapid response to the unprecedented consumer demand experienced in March, as lockdown measures tightened, has reinforced its strengthening relationships across its UK retail customer base. Whilst some increases in input costs are expected in the near term, as a result of the COVID-19 pandemic, the Board is confident that the Group's new business model is robust and structured to enable the swift management of fluctuating prices.

Overall, the Company is in a much-improved financial position with considerable headroom on its banking covenants. The reduction in net debt is expected to continue and remain comfortably below 2x net debt to EBITDA in the full year ending 30 April 2021 ("FY21").

The Board views the future with increasing confidence but remains mindful of the uncertainty and challenges which the COVID-19 pandemic continues to place on organisations globally. What is clear however, is that demand for the Group's new range of higher-value products, combined with further improved quality and consistently high level of service, put the Company in a strong position as it enters FY21.

The announcement of the Group's FY20 results is scheduled for early September 2020, assuming no delay to the audit process resulting from the COVID-19 situation.

(1) Pre-IFRS 16

 
For further information, please contact: 
 
Accrol Group Holdings plc 
Dan Wright, Executive Chairman            Tel: [phone] 
Gareth Jenkins, Chief Executive Officer 
 
Zeus Capital Limited (Nominated Adviser 
 & Broker) 
Dan Bate / Jordan Warburton               Tel: [phone] 
Dominic King / John Goold                 Tel: [phone] 
 
Liberum Capital Limited (Joint Broker) 
Clayton Bush                              Tel: [phone] 
Edward Thomas 
 
Belvedere Communications Limited 
Cat Valentine                             Tel: [phone] 
Keeley Clarke                             Tel: [phone] 
Llew Angus                                 Tel: [phone] 
                                           [e-mail] 
 

Notes to Editors

Accrol Group Holdings plc, based in Lancashire, is a leading tissue converter and supplier of toilet rolls, kitchen rolls and facial tissues, as well as other tissue products, to major discounters and grocery retailers throughout the UK. The business operates from four sites in Lancashire:

 
--  A manufacturing, storage and distribution facility in Blackburn; 
--  A storage and administrative centre in Blackburn; 
--  A facial tissue plant, also in Blackburn; and 
--  A manufacturing, storage and distribution facility in Leyland. 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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May 06, 2020 02:00 ET (06:00 GMT)