Accrol suspends trading in shares
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Lancashire tissue maker Accrol Group has suspended trading in its shares while it clarifies its financial position.
The Blackburn-based company made the announcement as part of a trading update, saying it was experiencing challenging trading conditions, which were having “a significant effect on the trading performance of the company ” for the financial year to April 30, 2018.
While revenues will remain on track, the company said earnings will be “significantly lower” than market forecasts, resulting in an increase in net debt.
Accrol will suspend trading while it considers the impact on net det and clarifies its financial position. It is also starting an operational review to improve margins.
Pressures include the price inflation of tissure parent reels, coupled with a delay in product price increases to mitigate this impacting the financial year.
It said it has also incurred higher than anticipated costs in terms preparing the business for growth, although it did add that these changes will deliver improved performance over the longer term.
Meanwhile, a health and safety incident, which occurred prior to the company’s listing on AIM, may now result in a more significant fine being imposed by the Health and Safety Executive (HSE) than expected, which could impact on the company’s cash position.
It added that these factors are likely to have less of an impact on the company’s trading performance in 2019.
The announcement comes after Accrol appointed Gareth Jenkins as its chief executive in September, following the hasty departure of Steve Crossley after just a year with the firm.
In July, the comapny published its maiden full year as a publicly listed company, with turnover and profits up and considerable ongoing investment.
It saw revenue increase 14.2% to £135.1m for the 12 months ended April 30, 2017 (2016: £118.2m). Gross profit increased 9.3% to £37.7m (2016: £34.5m), while adjusted EBITDA increased 6.8% to £16.1m (2016: £15m).
The company said it saw continued strong cash generation in a period which included a £3.6m repayment of loan note interest and overall net debt was reduced by £41.7m to £19m.