Accrol Full Year 2023 Results: Revenues up 52 percent

Accrol, the UK's leading independent tissue converter, announces the following trading update ahead of its Final Results for the year ended 30 April 2023 ("FY23" or the "Period"), which are scheduled to be released in late September 2023.

The board is pleased to report that the group's results for FY23 are expected to be at least in line with current market expectations.

Since the Interim Results on 24 January 2023, the Group has continued to perform strongly, gaining further market share through its great value product range, broad retailer base, and new routes to market. The Group has successfully navigated and mitigated the well-reported and substantial inflationary pressures on a broad range of input costs through further process efficiencies and by engaging constructively with its customers to pass-on these additional costs.

FY23 highlights

Adjusted EBITDA* expected to be at least in line with market expectations
Revenues ahead of market expectations at £241.8m (FY22: £159.5m) - up 52 percent
Adjusted net debt at 30 April 2023 lower than last year at £26.8m (FY22: £27.5m) - c.1.7x EBITDA (FY22: 3.0x) and is expected to reduce to less than 1.0x in FY24 through strong cash generation
Group volumes increased by 7.7 percent, compared to an overall flat tissue market with market share increasing to 21.5 percent (19.5 percent FY22)
Strong ESG progress with significant and tangible advances in all targeted areas
Gross margins continued to improve throughout the year with increased volumes in higher value products - the strong growth in the water industry approved flushable wet wipe business is especially pleasing

*Adjusted EBITDA is defined as profit before finance costs, tax, depreciation, amortisation, separately disclosed items and share based payments.

Outlook

The Group is well positioned as it enters FY24 with margins expected to improve back towards pre-pandemic levels at a faster rate than previously reported as the Group benefits from the significant investments made over the last few years and the improving revenue mix.

Prices are expected to soften in the year ahead, while volumes are expected to grow ahead of the overall private label sector.

With all major capital investments now completed, the Group expects adjusted net debt to reduce to less than 1.0x in FY24.

The business has a further 20 percent of production capacity to support continued volume growth going forward.

Paper Mill

The Group's preparation for its investment in a paper mill is progressing and we remain on track for the mill to be operational and positively impacting the business in the second half of 2025. Further updates will be provided in due course. As previously announced, the funding of this investment will come from existing cash reserves.

Gareth Jenkins, CEO of Accrol, said: "Accrol is significantly well invested and fully automated. With our enviable customer base, broadening revenue streams, spare capacity and excellent levels of customer service, the Group is very well placed to take further advantage of the changing dynamics in consumer spending, which is particularly evident in the tissue market.

"We are pleased with the outcome for FY23 and look forward to the year ahead and beyond with increasing confidence."

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