Accrol reports jump in annual earnings shortly after AIM IPO

Accrol Group, a maker of toilet rolls and tissue paper, on Friday reported its first set of annual results since floating on the London Stock Exchange’s AIM market on 10 June.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 22% to £15m in the year to 30 April 2016, up from £12.3m the previous year. Adjusted margins rose to 28.1% from 26.0%.

Revenue rose 17% to £118m from £101m, with the company’s 35% market share of the discount retail sector accounting for 69% of revenues. Revenue on its supplies to discount stores rose 6% after contract wins during the year. Its revenue on contributions to the multiple retail sector, representing 9% of group revenue, was flat.

Toilet tissue revenues showed the highest year-on-year growth of 35.5% or £14.0m. The products accounted for 44% of overall revenues, compared to 38% in the prior year, reflecting investment last year in two toilet tissue converting lines.

"I am delighted to report a strong first set of results following our listing on AIM in June,” said chief executive Steve Crossley. “Fiscal year 2016 has been a very successful year for Accrol and our focus on supplying Private Label products to both discounters and multiples has generated 17% revenue growth.”

Net cash generated during the year was £1.7m, which supported a £1.1m decrease in net debt.

Looking ahead on the possible effect of Brexit on business, the company said: “In the event that there is a period of reduced consumer expenditure following the UK's decision to leave the European Union, it is possible that the move towards non-discretionary Economy and Private Label products will accelerate.

“If this happens, we believe we are well positioned to benefit as over 50% of our sales are generated from the discount segment and we are primarily focussed on supplying Private Label products to both discount and multiple retailers.”