Accrol Group upbeat about the future after transformation

Accrol
Accrol
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Lancashire-based soft tissue manufacturer the Accrol Group remains upbeat about its future prospects as it emerges from a transformation period.

Accrol, which has sites in Blackburn and Leyland, has issued a trading update, ahead of its Half Year results for the six months ended 30 October 2018 (“HY1 19”), which will be issued onJanuary 22.

It says that, whilst the group was currently trading in line with expectations, performance in the full year to 30 April 2019 (“FY19”) remained sensitive to external macro-economic variables, namely foreign exchange volatility and increasingly high paper costs.

The group said: “Whilst the Group has been transformed operationally in 2018, addressing internal cost issues and customer margins to mitigate the significant impact of adverse headwinds, the continued weakening of Sterling against USD since September 2018 and increasing tissue prices have impacted profitability considerably.

“The negative impact of rising input costs and foreign exchange on the Group’s profitability in H1 FY19 amounted to around£5m. Should the current USD exchange rate and high tissue prices prevail, the Board estimates a further impact on input costs in H2 FY19 of around £3.5m.”

The directors believe that Group revenue in 2019 will increase by around eight per cent, broadly in line with market forecasts, to around £126m

Gareth Jenkins, chief executive officer, said he was confident about the coming year.

He said: “We are building a more robust business which is increasingly resilient and agile under adverse macro conditions.

“We are confident that we can create a solid business which delivers acceptable levels of return even under difficult macro conditions and additional upside for shareholders given fair winds.”