Tissue maker confident as new financial year begins strongly

Accrol, the AIM-listed Blackburn-based tissue and toilet roll maker, said it is well positioned for the future, after announcing results for the year to April 30, 2022, today.

Revenues increased from £136.6m in 2021 to £159.5m this year, while the pre-tax loss of £2.5m was a reduction on the previous year’s £3.1m loss.

The group has achieved amended and extended banking arrangements to August 2024, providing 25% additional headroom, which demonstrate continued confidence in the group’s operating performance and support the board’s growth ambitions, it said.

Accrol said its market share by volume increased to 19.5%, compared with 18.9% in previous year, compared with a flat overall UK market

New customers have been secured through increasing product diversity – notably Amazon, Unitas (circa 30,000 convenience stores), Spar, Ocado and Sainsbury’s.

The group said it has entered financial year 2023 with pricing fully aligned with higher input costs

The private label sector is strengthening further post year end. Accrol volumes increased by 28% versus private label growth of 10% in the first quarter of 2023, while the overall market has remained flat.

Private label volumes are now higher than pre-pandemic levels and the group’s market share is growing at an unprecedented rate against the traditional brands.

Group revenue was up 76% in the first quarter of the current fiscal year, compared with Q1 in 2022, driven by price increases (48%) and volume growth (28%).

Accrol’s revenue and EBITDA are on track to increase in line with market expectations for 2023 (+31% and +68% respectively), and the group said it is well positioned to benefit from the rapid rise in demand for best value tissue products.

While cognisant of the ongoing macro inflationary dynamics, Accrol said its strong market position, well invested manufacturing facilities and available capacity, give the board confidence for 2023 and beyond.

Chief executive, Gareth Jenkins, said: “Our goal, over the last four years, has been to create an innovative, sustainable and market-leading business, which I believe we have finally achieved. This has been delivered through the hard work and dedication of our team and never have their skills and commitment been more clearly demonstrated than in the year under review.

“Accrol is unrecognisable from the business which floated in 2016. It is resilient, agile, and strong.

“The cost of living crisis being faced by UK consumers is driving demand for great value products across the board. The demand for private label tissue, which started to rebound in FY22, has accelerated rapidly since our financial year end.

“Private label comprised 50% of total UK sales volumes in FY22, and this has continued to grow since the start of May 2022 with private label now holding a 54% market share. Accrol volumes currently comprise over 32% of this private label market.”

He added: “The index linked pricing agreements we have put in place over the last 12 months, combined with the quality of our products, the efficiency of our operations and the capacity we have built into the business, have ensured Accrol is best placed in its market to capitalise on the opportunities.

“While remaining conscious of the very significant ongoing macro uncertainties, we look forward to FY23 and beyond with continued confidence.”