Profit warning at Accrol

By Ged Henderson

19 Mar 2018

Tissue maker Accrol profit warning

Troubled Lancashire-based tissue manufacturer Accrol has issued a profit warning as its new management team continues to battle “major issues” affecting the business.

In a statement today it revealed its adjusted EBITDA loss for year ending April 30 is now expected to be in the region of £5m.

Net debt, currently at £31m, is also expected to be higher at the year-end than previously expected, despite a £18m having been raised from shareholders in December.

As well as the profit warning, the statement also revealed that the group is likely to breach one of its banking covenants.

And it says it is in “constructive discussion” with its bank on headroom and resetting covenants.”

The business, which has its headquarters in Blackburn and operations in Leyland and Skelmersdale, is listed on the AIM.

The statement said the group’s trading performance has been “significantly impacted” by three major issues - an  escalation  in  internal  costs,  input  costs  and  adverse  foreign  exchange  hedging.

And it added: “The new management team believes firmly that the challenges facing the group are resolvable, given time and experienced handling.

“The successful resolution of these issues, however, will be a demanding task and one not without execution risk.”

The business also says the outlook for the year ending April 2019 remains “in line with market expectation”.

Accrol says the magnitude of the escalation in costs – around 50 per cent higher than at the end of the previous financial year has “only very recently become fully apparent to the board.”

It says it is making operational progress to address issues including the restructuring of logistics, with expected full year savings of more than £5m.

Discussions are also underway on a planned exit from underperforming areas of the business through disposal.

Work is also going on to rationalise the business’ manufacturing capacity and there is also on-going work to simplify its product portfolio.

Important volume increases have been agreed with several key customers and agreement, in principle, for a longer-term relationship with one major customer.

The statement said: “In recent weeks, the new leadership team has gained a much fuller understanding of the nature and scale of the issues that need to be addressed.” It added: “Resolving the cost issues will inevitably take time. The new management’s objective is to reverse at least half the recent cost growth by the end of this calendar year and progress is already being made.”

Enjoyed this? Read more from Ged Henderson

Latest news

1

Chiptech announces major innovation initiative at high-profile reception with the New Zealand Prime Minister in London. The Rt Hon Jonathan Reynolds, the Rt Hon Christopher Luxon and the Rt Hon Steve Reed (L-R Front Row) David Hammond, and Daniel Knowles

Chiptech announces major innovation initiative at high-profile reception with the New Zealand Prime Minister in London.

30 Apr 2025

2

Northstone secures full planning permission for 50 new homes in Edenfield Edenfield housing development

Northstone secures full planning permission for 50 new homes in Edenfield

29 Apr 2025

3

Ring Stones Maintenance and Construction celebrates completion of Dovestone Gardens Dovestone Gardens launch

Ring Stones Maintenance and Construction celebrates completion of Dovestone Gardens

29 Apr 2025

4

PHX Training welcomes new business leader to drive learner success Louise Kirby

PHX Training welcomes new business leader to drive learner success

29 Apr 2025

5

Lidl to invest half a billion pounds in its expansion as it eyes sites in Lancashire Lidl

Lidl to invest half a billion pounds in its expansion as it eyes sites in Lancashire

29 Apr 2025

Pc Prestonmacan Gif980x120 March
Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
LBV122 May/June Launch Event
121 Lancashire Business View Magazine Launch
Networking
21 May 2025

LBV122 May/June Launch Event

Lancaster and Morecambe College, Lancaster, LA1 2TY

08:30 - 10:30

Sub36 Networking
Networking
11 Jun 2025

Sub36 Networking

British Jewellery School, Scorton, PR3 1BA

15:00 - 17:00

Lancashire Net Zero Carbon Conference
Net Zero Carbon Social 1200px 2
Networking
18 Jun 2025

Lancashire Net Zero Carbon Conference

Crow Wood Hotel & Spa Resort, Burnley, BB12 0RT

08:30 - 13:00

Lancashire Built Environment Conference 2025
BEC 315 X 315 Px
Networking
25 Sep 2025

Lancashire Built Environment Conference 2025

Blackpool Football Club, Blackpool, FY1 6HX

08:30 - 13:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

RISE - The Academy for Female Leaders and Managers
WENDY BOWERS RISE Illustrstion copy.jpg.jpg
LBV Hub Seminars
02 Apr 2025 - 08 Oct 2025

RISE - The Academy for Female Leaders and Managers

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:00 - 15:30

Planning for the future + navigating Inheritance Tax changes
Planning for the future + navigating Inheritance Tax changes for website.png.png
LBV Hub Seminars
01 May 2025 - 01 May 2025

Planning for the future + navigating Inheritance Tax changes

Stanley House Hotel, Mellor, Blackburn, BB2 7NP, Blackburn, BB2 7NP

08:00 - 10:30

Advantage: AI – A Workshop for Business Leaders – May 2
EV-land-2025-05B.png.png
LBV Hub Seminars
02 May 2025 - 02 May 2025

Advantage: AI – A Workshop for Business Leaders – May 2

Door4 Office, Burnley Wharf, Manchester Road, Burnley, BB11 1JG

09:00 - 11:00

A night at the races
1.png.png
LBV Hub Dinners / Balls
02 May 2025 - 02 May 2025

A night at the races

Morecambe FC, Morecambe, LA4 4TB

19:00 - 23:59

Innovating business solutions through PhD Partnerships
30478 Skills Bootcamp open day setting.jpg.jpg
LBV Hub Networking
07 May 2025 - 07 May 2025

Innovating business solutions through PhD Partnerships

University of Central Lancashire, Preston , PR1 2HE

14:30 - 15:30

Celebrating 50 years of KTP
UCLanAerialCampus.jpg.jpg
LBV Hub Networking
07 May 2025 - 07 May 2025

Celebrating 50 years of KTP

University of Central Lancashire , Preston, PR1 2HE

16:00 - 18:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more Lbv121 Online Graphic
Subscribe now

Weekly news bulletin