Shares of Blackburn-based tissue maker Accrol Group rose about 4% on Tuesday after it said it had carried out a “successful and rapid turnaround” of the business.
Announcing results for the year to April 30, Accrol said it was now “operationally efficient” following a troubled year.
Accrol is currently being investigated by the UK’s Financial Conduct Authority (FCA).
Accrol said revenue for the year fell to £119.1 million from £139.7 million “as the group strategically exited the Away From Home market and other low margin contracts.”
Loss before tax decreased by £10.1 million to £14 million.
Accrol CEO Gareth Jenkins said: “The heavy lifting of the turnaround is now behind us and the ongoing challenge of maintaining consistent delivery of low cost, quality product to our customers remains.
“We are now able to instil continuous improvement disciplines into an operation that is fit for purpose.
“As the new financial year progresses, we will continue to be innovative in our approach to winning new business and take steps to bring our low cost, high service brand-killer approach to different products and markets.
“We keep a watchful eye on the strength of the pound and will take the steps necessary to mitigate the risks of continued currency weakness, but that should not distract us from profitably meeting our customers’ needs.
“The business has now been reset.
“There is a huge opportunity for the group in the rapidly growing personal hygiene value market and, whilst there is more to do, the board has real confidence that the foundations have been laid for a successful future.”
On the FCA investigation, Accrol said: “As previously announced … the FCA is investigating the period from 10 June 2016 to 30 September 2018.
“The group continues to co-operate fully with this investigation and anticipates further expenditure on advisory services relating to this matter in FY20.”
In his outlook, Accrol executive chairman Dan Wright said: “The group’s exposure to the thriving discount retail segment is stronger than it has ever been, and we are growing our presence amongst the major grocery retailers.
“The consumer shift away from more expensive established brands to best value products is accelerating and the group remains well positioned to capitalise on this trend.
“Our capabilities support our strategic brand-killer ambitions in the luxury private label tissue market and beyond.
“As we move towards H2 FY20, our attention is focused on helping more customers deliver the best value for price paid on tissue products.
“Profitable growth is our priority, as we match production capacity to significant market demand and our stakeholders’ growth expectations …
“Our confidence and ability to invest in new capacity reflects how far the business has progressed over the last 18 months, despite extremely challenging input cost headwinds.
“Although these headwinds are ongoing, the group remains on track to meet market expectations in FY20 and the board looks to the future with confidence.”