Accrol ready for growth after “rapid turnaround”

Accrol issues profit warning

Blackburn-based tissue business Accrol Group has posted a rise in underlying sales and has declared it is ready for growth following the delivery of a rapid turnaround plan.

For the year to April 30 2019, the listed business report underlying revenue of £116.7m compared to £115.3m in the previous year.

Its adjusted EBITDA rose from a loss of £5.8m to a profit of £1m. Losses before tax fell from £24.1m to £14m. Revenue fell from £139.7m to £119.1m.

Announcing the results, the business said: “Accrol is now profitable, cash generative and fit for purpose.”

It added: “The scale and pace of change implemented in the business in FY19 to effect a successful and rapid turnaround were extraordinary.

“Accrol is now a simpler, stronger and more operationally efficient business than it has ever been.

“Monthly profitability has been restored, despite input cost headwinds of £10.8m, the group is cash generative and net debt is reducing.

“With a highly experienced senior leadership team in place and the group’s primary market growing rapidly, the re-engineered business is ready to capitalise on this opportunity.”

The business is more operationally efficient and fit for purpose than it has ever been.

The Accrol board has “approved in principle” investment in further machine capacity and will continue to “optimise production” through automation.

Executive chairman Dan Wright said: “The new board and management team of Accrol delivered a complex and comprehensive turnaround plan in FY19, simplifying and strengthening the business to improve efficiency and optimise operational performance. 

“Following the conclusion of this restructuring, I am pleased to say that I believe the business is more operationally efficient and fit for purpose than it has ever been.

“By the end of the year, we achieved our stated objective to return the group to monthly profitability and I am pleased to report that the reengineered business is showing resilience in the face of strengthening FX headwinds.

“The group is beginning to secure enhanced credit terms from its key suppliers and capitalising on this initiative is a core element of our continued working capital management and improving debt profile.

He added: “The group has delivered improving levels of monthly profitability since the year end.  As such, we are on track to meet market expectations in FY20 and the board is confident that the group will exit FY20 at an accelerating monthly run rate.”

Chief executive Gareth Jenkins added: “The heavy lifting of the turnaround is now behind us and the on-going 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.”

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