Private label growth fuels Accrol confidence

Blackburn based paper products manufacturer Accrol says it is looking forward to the next 12 months with confidence fuelled by accelerating growth in private label growth.

The AIM listed company has unveiled its annual results for the year to April 30, 2022, showing an increase in revenues from £136.6m in 2021 to £159.5m this year.

The figures also show that Accrol’s pre-tax loss of £2.5m was a reduction on the previous year’s £3.1m loss.

The group also said amended and extended banking arrangements to August 2024, providing 25 per cent additional headroom, demonstrated continued confidence in its operating performance and supported the board’s growth ambitions.

Last month Accrol announced it was expanding its operation near Leyland with the construction of a new 68,000 sq ft unit.

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

A number of new high-profile customers had been secured through increasing product diversity, including Amazon, Spar, Ocado, Sainsbury’s and Unitas, which operates around 30,000 convenience stores.

The group said it had entered the new financial year with pricing fully aligned with higher input costs and that accelerating growth in private label volumes post year end were “fuelling confidence”.

Volumes increased by 28 per cent versus private label growth of 10 per cent in the first quarter of the new financial year, while the overall market has remained flat.

The group says private label volumes are now higher than pre-pandemic levels with market share growing at an “unprecedented rate” against the traditional brands.

Gareth Jenkins, Accrol chief executive, pictured, 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 per cent 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 per cent market share. Accrol volumes currently comprise over 32 per cent of this private label market.

“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.”

Accrol’s revenue and EBITDA on track to increase in line with market expectations.