Accrol announces maiden divi
LANCASHIRE toilet roll company Accrol Group Holdings has announced its first half year dividend of 2p a share, on the back of rising revenues and profits.
Revenue increased 8.8% to £63.9m for the half year results to the end of October 2016, while gross profit increased 5.6% to £18.2m.
The Blackburn-based company manufactures around 16 million toilet rolls each week and supplies the likes of Tesco, Aldi, Morrisons, Bookers and Wilkinsons.
In November it confirmed a £10m contract with Lidl, pushing its share of the discount sector to around 50%.
In September, the company annouced that it is to open a new manufacturing plant in Leyland, creating 80 jobs and increasing total capacity to 143,000 tonnes a year.
The 168,000 sq ft plant will start production in January 2017 and initially house two high-speed tissue converting lines, as well as providing finished goods warehousing space.
Accrol said the new facility has the space to add two further converting lines if required and that the investment will support its continued growth with both the discounters and the major multiples in the UK.
Accrol continues to follow its hedging policy to mitigate adverse movements in sterling against the dollar and euro, which has resulted in a 1.1% improvement in adjusted gross margin to 28.4%.
Steve Crossley, Accrol’s chief executive, said: “Our strong first half performance demonstrates the success of our strategy of organic growth through discounters and increasing market share through the supply of private label products to some of the UK’s largest retailers.
“We have continued to win new business, including a contract with Lidl which is expected to generate more than the £10m sales per year previously announced, increased our market share in the discount sector to circa 50% and have made significant progress with our strategic plan of making operational improvements and increasing capacity to ensure we can best meet the growing demand for our products. We remain confident in the outlook for the full year.”
The company floated on the AIM in June, raising £63.5m and giving it a market capitalisation of £93m, in a move which saw private equity firm NorthEdge Capital achieve its first exit, but retain a 15% stake.
Net debt has been reduced by £3.2m from £23.1m at flotation to £19.9m.
