# Accrol Group expects revenue to grow by 17% in 2022

- Link: https://www.directorstalkinterviews.com/accrol-group-expects-revenue-to-grow-by-17-in-2022/4121042802
- Published: 2022-01-12T07:18:38+00:00
- Author: Giles

**Accrol Group Holdings plc** ([LON:ACRL](https://www.directorstalkinterviews.com/company/accrol-group-holdings/acrl.l)),
the UK’s leading independent tissue converter, today provided the following trading
update for the current financial year ending 30 April 2022 (“FY22**“**).

In the period since the Company’s last trading update of 20 October 2021, the Group
has experienced further inflationary pressure on input costs including pulp prices,
supply chain costs and most significantly energy costs.  In light of these cost 
increases, the Group has implemented further cost efficiencies and has engaged with
all its customers successfully securing substantial price increases, over and above
those secured in mid-2021 and, as a result, the Board was confident of meeting its
revised expectations for FY22.

However, unavoidable surcharges to parent reel prices, relating to exceptional energy
price increases, have very recently been levied on the Company, which will significantly
impact margins. The management team has experience of successfully managing inflationary
pressures and the Board is confident that this is a timing issue and that further
cost increases, including these recent surcharges, will continue to be passed on
successfully to Accrol’s customers. The underlying business is in good shape and
the Board remains confident in the medium-term prospects for the Group.

Despite continued supply chain disruption, particularly at ports, around the world
and specifically in the UK, the business continues to manage customer supply well,
having secured and maintained additional stocks in paper and finished goods.

In FY22, revenue is now expected to grow by 17% to c.£160m (FY21: £136.6m), generating
adjusted EBITDA^(1) of c.£9.0m (FY21: £15.6m) with margin recovery anticipated in
FY23.

Accrol Group continues to operate well within its existing banking covenants and
has more than sufficient liquidity to meet its existing and future needs.

In light of the above and the short-term but inherent volatility of earnings experienced
in the current year, the Board has concluded that it is now appropriate for Accrol
to conduct a full strategic review of its business. Such review will be designed
to capitalise on the evident strength of the business’ market position, its balance
sheet, and its solvency, underpinned by significant banking support, to ensure that
the shareholder value is optimised.

A further update will be provided with the Groups H1 2022 results, which will be
announced on 18^(th) January 2022.

_^(1 )Adjusted EBITDA is defined as profit before finance costs, tax, depreciation,
amortisation, separately disclosed items and share based payments_

Accrol Group Holdings plc is a leading tissue converter and supplier of toilet tissues,
kitchen rolls, facial tissues, and wet wipes to many of the UK’s leading discounters
and grocery retailers across the UK. Following the recent acquisitions of LTC in
Leicester and JD in Flint, North Wales, the Group now operates from six manufacturing
sites, including four in Lancashire, which generate revenues totalling c.16% of 
the £2.1bn UK retail tissue market.

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