Accrol Share Discussion Threads

[darrin1471] 21/12/2023 16:46

A couple of large rogue trades today:
2 x 150,000 @ 38.4p at 15:44
38.4p is a year high.

[scemer] 21/12/2023 14:12

Yes riviera the jan half year could be the spring board giving us more info for the full year. I am also expecting a good 12 to 24 months we could easily sniff the previous highs after all Zeus had pegged them as a potential £400 million Market cap business

[riviera1069] 21/12/2023 12:19

Yes. Think this going to be a good one over the next 12 to 24 months

[darrin1471] 21/12/2023 11:48

The first time we have seen buy orders above 35p since August

[red army] 12/12/2023 21:33

Ok every month then they are obliged to tip something.

[jakes114] 12/12/2023 20:52

Monthly the news letter comes out

[red army] 12/12/2023 12:05

No I dont as they are obliged to make tips every week irrespective of the quality of the proposition.

[darrin1471] 12/12/2023 08:21

red army. Do you have a SCSW subscription?

[red army] 11/12/2023 21:47

Still holding and happy to continue as profits should increase due to increase prices and reduced costs.

[scemer] 11/12/2023 21:30

I meant their year end not 2023

[darrin1471] 11/12/2023 19:10

The ACRL share price has been a frustration since July.
IMO well "managed" since July to clear the NorthEdge stake.
Look how quick MCB's forecasts have changed this year when input prices have fallen and when demand for non branded products is at record levels.
The SCSW Accrol tip this weekend may be the kickstart the share price needed.

[scemer] 11/12/2023 17:30

Darren this has 40-45p written all over it just on the numbers they have put out and guidance I can't understand why it's not there but that's the market I guess they need the evidence, should be there at year end though.

[darrin1471] 11/12/2023 11:30

I don't subscribe to SCSW but I believe MCB were the main tip over the weekend. MCB up 15% currently.
I wonder if ACRL were also tipped as buying in the first 6 minutes of trading this morning was a similar pattern to MCB.
MCB and ACRL both make "own brand" household essentials for the supermarkets and discounters. So investors may have read the MCB investment case and applied it to ACRL who are in the same market.

[superbobo] 11/12/2023 10:57

Good to see the share price finally breaking higher on no news. Hopefully the pent up selling from LO has finally reduced and we can push higher.

[darrin1471] 05/12/2023 14:56

MCB and ACRL are both suppling own brand products but there are some significant differences, some of which become more obvious with hindsight.
MCB was a more risky investment but had the greater upside.
ACRL is better invested and coped with rising input prices better.
MCB had significant debts before input inflation and input inflation could of wiped out shareholders.
Pre covid MCB powders market was in structural upheaval as trends changed from washing powder to washing liquid and tabs. New production lines were needed for liquid and tabs which left powders with excess capacity in Europe. This led to uneconomic pricing before input inflation and has since resulted in the closure of competitors capacity.
ACRL's main input cost is paper which is an easy enough commodity price to follow. There are other input costs that are harder for supermarkets to see.
MCB has over 200 different chemicals in their range of products making their input pricing harder for the retailers to monitor.
MCB debt/ebitda is due to fall below 2x this current year and ACRL have been saying they will generate significant cash.

[darrin1471] 04/12/2023 14:18

I believe the move to own brand is structural and my understanding is that this is more advanced in mainland Europe than the UK. The evidence is that it is difficult to attract consumers back to buying brands after they start buying own brand.
Brands like Heinz have boosted margins during cost inflation to compensate for lost volumes. As input inflation turns to input deflation, then the brands are likely to keep the same base prices but increase marketing and special priced offers to tempt old customers back.
If inflation is beaten, then I would expect the supermarkets to claw margin back from suppliers over time. Supermarket margins will improve and they will say this is due to greater efficiencies and investment. Suppliers should have a window of a year or so to recover margins before the supermarkets get an upper hand.
By then ACRL should have an even stronger hand as volumes reach capacity they should be able to target price over volume efficiencies.

[darrin1471] 04/12/2023 13:57

Sphere25. On this occasion I don't think it is a failed breakout. I suspect the ACRL share price was managed down from 36p to 25p to allow NorthEdge to sell 8% to Lombard. I suspect Lombard are selling some of that 8% for a near 20% profit in a month to reduce their exposure. Time will tell.
With Lombard holding a 25% stake in ACRL, I would expect them to have a good view of ACRL and its future.
I first bought ACRL in 09/22 and it was my biggest holding this year until the recent jump in MCB. I continue to hold in full.
I also expect the move to be rapid once the the news allows.
Half year results at the end of January

[sphere25] 04/12/2023 12:00

A small flurry, just keeping a little eye open to see if any whoppers land. It looks like a failed breakout at the moment. On a very micro price level, sellers have exhausted buyers at 31.2p and now the buyers are exhausting sellers at 31p.

It is a very tight range. Sometimes there are vicious breakouts when it gets this tight, but overall the market seems to be comfortable in a few penny range.

I wonder if this transition to cheaper brands will be a more structural change. Shoppers do naturally gravitate back to brands when the economy picks up. However, we could be in this higher rate and low growth environment for years. One or two rate cuts next year? Forecasts from late Q4 to some saying Q2 now - no idea how that pans out.

But there was commentary recently that over half of spending at Aldi and Lidl is now from the middle classes. These brands like Weetabix, Maryland Cookies, Hula Hoops are actually keen on producing lower priced versions of their own products for the discounters.

I don't know how much of that is for fear of losing market share. CMA came out last week to check on the likes of Heinz with their rip off baked beans. Perhaps the consumer has had enough of big brands taking the mick?

MCB keep upgrading. If they weren't so loaded with debt, they'd probably be off to the moon, but some people can't even notice the difference between brands. That Freeway Cola seems to come out well against the majors and the MCB washing powders came out well versus P&G and Unilever.

Maybe that all means continued upgrades for ACRL?

All imo
DYOR

[darrin1471] 04/12/2023 10:54

Over 1m shares traded this morning. These volumes are orderly and well managed.

[darrin1471] 25/11/2023 20:34

I was initially underwhelmed by the trading update as I had hoped for bigger improvements by now.

In the 2023 final results EBITDA market expectations for 2024 were raised from 19.5 to 20.5m. Two months later they have been raised again to "at least 21m"
That does give me hope that we may get further upgrades in January and beyond.

While Accrol said "volume growth continued throughout the period" it is of note that revenue expectations for FY24 have fallen from £230m to £205m prior to this weeks trading update and that Accrol said "known volume gains will positively impact H2 FY24"

A debt/EBITDA of close to 1 looks unambitious when net debt was 26.8m at Y/E and market expectations are for 20.1m by the end of FY24. If revenue is forecast to fall by 10% then working capital should also be falling 10% plus the higher profits.

Gareth was talking of targeting margins in the teens for Accrol, but FY24 margins by my calculations are currently 10.24%.

ACRL has underperformed the rest of my shares ytd which is frustrating as it was my biggest holding before the recent rise in MCB. I will continue to hold in full hoping for more upgrades and for the "managed" share price to improve.

[sphere25] 22/11/2023 12:34

Watched that....watched bog roll getting made - don't tell anyone.

High five!

Had a little go here. The chart has been in a tight range, but it looks like it is breaking higher here with the price at 32p.

If it can push on here, maybe a move to 36p?

It has done lumpy ones with pops to 35p and then back toward 31p too. A stop under 30p if it fails looks right. Quite a well bid order book right now with what looks like decent buyers at 31p and slightly higher.

All imo
DYOR

[darrin1471] 22/11/2023 12:32

I think Inside the factory went to Essity in Manchester.
Accrol say they have the most modern low cost operation in the UK
Here is an Accrol video:

[clocktower] 22/11/2023 10:18

Past years investment is really starting to pay off, with what must be some of the industries most modern equipment.

Worth watching Inside the Factory.

[this_is_me] 22/11/2023 07:46

The pandemic is now well behind us and the company is performing very well indeed. I expect that we will see steady progress over the next couple of years until the mill is in operation.

[clocktower] 22/11/2023 07:15

Sparkling results with a drop of debt of £5 million as cash generation is strong.