Shares suspended in Lancashire tissue company

Lord Shuttleworth, Lord-Lieutenant of Lancashire, with former Accrol CEO Stephen Crossley in Leyland
Lord Shuttleworth, Lord-Lieutenant of Lancashire, with former Accrol CEO Stephen Crossley in Leyland

Lancashire-based toilet tissue maker Accrol has halted trading on the AIM market and issued a profit warning after being hammered by rising costs.

The group said earnings would be “significantly below” its forecasts for the current financial year as tough trading conditions tore into the business.

Accrol, which hired chief executive Gareth Jenkins last month, is facing rising manufacturing and expansion costs and a prospective fine linked to a “health and safety incident”.

The Blackburn-headquartered firm has a major plant at Leyland.

In a statement, the company said it would review its dividend for the current financial year.

It added: “Whilst the revenue expectations for FY18 remain broadly in line with market expectations, the board has reviewed its expectations of the group’s performance.

“Based on current market conditions, the board now anticipates that earnings will be significantly below existing market forecasts for the current financial year, and as a consequence net debt will be correspondingly higher at year end.”

While the group expects trading for the 2018 financial year to suffer, the challenging conditions will have less of an impact in 2019.

The Blackburn-based firm halted trading on the London Stock Exchange’s junior AIM market at 7.30am on Thursday.

Accrol manufactures toilet paper, kitchen rolls and facial tissues.

Accrol said earlier this year it was consolidating its position as the leading supplier of tissue products to the discount sector.

It had continued to invest in its growth plans with the opening of a new 168,000sq ft manufacturing facility in Leyland, in January 2017.

That increased production capacity to 143,000 tonnes per annum.