Accrol Group Holdings PLC Trading Update (4750Z)

TIDMACRL

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 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) 
 --   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: [phone] 
Dominic King                                 Tel: [phone] 
 
Shore Capital Stockbrokers (Joint            Tel: [phone] 
 Broker) 
Malachy McEntyre / Mark Percy / James 
 Thomas 
 
Belvedere Communications Limited 
Cat Valentine                                Tel: [phone] 
Keeley Clarke                                Tel: [phone] 
                                              [e-mail] 
 

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 cGBP2.5bn at retail sales value.

For more information, please visit www.accrol.co.uk .

Link for Accrol Today video: https://www.accrol.co.uk/our-business/

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.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

TSTNKPBDABKDOPD

(END) Dow Jones Newswires

May 16, 2023 02:00 ET (06:00 GMT)