Blackburn loo roll maker believes worst is past
Blackburn toilet roll maker Accrol believes it has come through the worst and better times beckon, announcing its annual results to April 30 today.
The AIM-listed firm grew sales by £5.5m to £139.7m, but a pre-tax profit of £8.6m last year was wiped out by a £24.1m loss in 2018.
Accrol said its performance was significantly impacted by four major issues: An escalation in internal costs; input cost increases; an inability to agree timely price increases with customers; and adverse foreign exchange rate movements.
A new management team was appointed in August to help the firm turn its fortunes around.
However, it has had to undertake a series of measures to remedy the situation.
These included slashing its workforce by 43%, pulling out of an agreement on a Skelmersdale-based facility, resetting its banking covenants, and implementing a new IT system.
The group said these have helped achieve long-term pricing arrangements being re-negotiated, significant volume growth secured from two of the UK’s top four grocery retailers, additional sales to existing leading discount retailers, and market-leading product innovation, namely the first UK tissue converter to offer plastic-free packaging.
Chief executive Dan Wright said: “FY18 has been incredibly tough for the group, its shareholders and other stakeholders.
“However, the retrospective figures we are announcing today do not reflect the group’s current position.
“The new board and management team is creating a business which is stronger: streamlined, commercial and innovative.
“Whilst there is still more to do over the next six months, a great deal has been achieved post-year end and I look forward to reporting on the group’s financial progress at the half year end.”
Chairman Gareth Jenkins added: “We have ambitious plans to continue to grow profitably, which will be the result of delivering great value, quality products to the consumer.
“The business is in a strong position due to the breadth of retailers we supply and the changing dynamic of buying habits away from the previously dominant, big brands.
“The differentiated position with customers, built on our investment and innovation-led expertise, and the changing market dynamics reinforces our confidence in the long-term prospects for the group.”
Today’s statement declared that, despite the current headwinds faced by the business, the group’s performance in the first half of financial year 2019 is as the board expected and the directors believe that Accrol is on track to achieve market expectations for 2019.
Net debt as at August 31, 2018 was £25m.
Accrol operates from three sites, two in Blackburn and one in Leyland.
