Accrol plans to resume dividends, buy back shares

Shares of Blackburn-based toilet roll and tissue maker Accrol Group rose about 7% after it announced it intends to resume dividend payments “as soon as is practicable” and to request authority from shareholders to buy back its ordinary shares.

Accrol also unveiled the outcome of its strategic review, which includes decisions to build a sustainable paper mill, focus on its core toilet and kitchen towel business, grow its facial and wet wipe business, and “acquire selectively to strengthen and extend our product offering.”

Announcing its unaudited results for the six months ended October 31, 2022, Accrol said revenue in the period rose 64.3% to £121.1 million and adjusted profit before tax rose to £3.2 million from £500,000.

On current trading and outlook, Accrol reported strong volume performance in H2 to date, driven by continued strengthening of private label, and said it is on track to deliver revenue growth of 50% to £230 million and adjusted EBITDA marginally ahead of market expectations in FY23.

Accrol CEO Gareth Jenkins said: “The board is pleased to report that the group performed strongly in H1 FY23, delivering substantial growth in volume, revenue, and profit, as well as further strengthening its market position.

“The group continues to demonstrate its resilience against the challenges of input cost inflation, and we successfully leveraged our supply position with customers to recover all additional costs incurred in the period.

“The group delivered a notable 14% volume growth in the period, against an overall market which grew by just 1%.

“This was achieved by offering the consumer great value products which suit every budget. Our strengthened supply model and established relationships with the retailers will ensure that the group is well positioned to deliver strong results in difficult market conditions.

“As announced in our trading update on 21 November, adjusted net debt at 31 October 2022 was lower than anticipated at c.£30.5m.

“This was achieved despite a significant increase in tissue stocks, as the group continued to manage uncertainty in its supply chains and the effect of strikes at UK ports.

“This working capital position is unwinding, as we progress through H2 and trading conditions normalise.

“Adjusted net debt at the full year end remains on track with market forecasts, which were lowered at the time of the trading update to less than 1.5x EBITDA.

“The group has performed well in H2 to date and is on track to achieve revenue and adjusted EBITDA growth for the year ending 30 April 2023 (FY23) marginally ahead of expectations at £230m and £15.5m respectively.”