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I’m with you as I’d hoped this would recover some of the nosedive. I guess the market are waiting on the board who appear a little too quiet for my liking. The downgrade on profit from 35 to 25% is easily factored into the current sp. However, I’m hoping the board have been honest…In my experience, if you’re offloading bad news, get it all out there, then you can start to build on the good. If they announce another shift the market will make them pay.
It would be good for an update to steady things before sharing further good news. I’m new to this sector but figured they were describing supply chain issues that could and would be corrected. I’m a little nervous that my £10k has been misplaced on an impulse buy!
was thinking of buying some more shares but not too sure at the moment the sp just keeps going down not sure when it will hit the bottom
I was in for £10k last week as it strikes me that this is massively overdone. Downgrading forecast from 35 to 25% profit is a no brainier if the mills come online and supply chains correct. It’s not as though they’re making a product that’s fashion based…we all wipe…!
Bought a few more 38p this morning. Think price is low IMAO , and Interesting two large buys
yesterday afternoon. DYOR
sales expected to grow 25% rather than 35%. This translates into £170m for the current year; Management said these costs are being “successfully passed on” but there is an inevitable time lag before price increases come through. Accordingly, ebitda margins are expected to be in line with last year’s 11.5%
Our enthusiasm for Accrol is based on a positive view of the management team and their strategy. CEO Gareth Jenkins has many years experience in the industry and has run large businesses within DS Smith. He has also assembled an experienced team around him with an aim to grow the company significantly
https://twitter.com/surprised_trade/status/1450779698913554432
broker note target price 80p
flushing out those who feel this is not cheap down here etc. still holding all mine (shares !) as to me sp has been taken down considerably..broker notes both suggest much greater upside from these levels with fair value between 61p and 80p...as ever in these situations, that many companies are experiencing now, the initial drop is somewhat overdone...toilet paper is not a hobby and therefore is still in everyday demand ( great post Mr casual lol) and with the bod's experience and own paper mill upcoming it appears the sp could indeed recover over coming days/weeks as the business is in shape from all accounts to build from here
Liberum broker note..20.10.21
...Accrol remains fundamentally strong after significant progress in FY’21 The business remains in excellent operational shape with scalable foundations for growth and a strong market position across UK retail. Acquisitions of LTC and John Dale in FY’21 have provided the company with further scale, complementary new customers, synergies in distribution costs, spare capacity and entry into the complimentary adjacent category of fully flushable wet wipes. Accrol completed the full automation of the Blackburn tissue plant in FY’21, with robotisation replacing all manual finished goods movements. The four converting lines at the LTC plant are already fully automated. With a small element of automation to be completed in Leyland in FY’22E, as a new machine arrives, the Group will have three fully automated greenfield sites to achieve the lowest possible operational cost base in the UK. The group has no further significant capital requirements for the Tissue Converting division.
Accrol’s has made significant advancement on its plan to develop its own paper mill. It has finalised the specifications and costs of the machine and the building and is currently running a selection process for the mill’s location. This machine will be a UK leader in efficiency, quality and carbon neutrality. The machine, once completed, will fulfil half of the business’s current tissue requirements. The company is mindful of the current energy costs and their impact on the feasibility of the mill investment, and it will look to secure a long-term energy supply contract, as well as explore options for on-site energy generation before committing to the investment in the mill. No additional funding is expected to be required from shareholders to deliver this investment.
Valuation appears cheap at 7x CY’22E EV/EBITDA Target Price to 80p to reflect lowered forecasts.
This is a luxury that our new population are not familiar with ie :- Right hand to eat with, Left hand to wipe the Bum, The great replacement will at least fix the Toilet Paper shortage.
ACRL highlighted in the Times today.....
Accrol said: “In line with the wider market, pressures on the group’s raw material supply chains have been considerable, with further tightening in recent weeks.”
The news sent shares in Accrol down by more than 13 per cent, or 6p, to 39p last night, their lowest level since April last year. While the group’s supply chain has shown significant resilience and supply shortages have been managed, considerable cost increases had to be absorbed in the short term,
Accrol said yesterday that it was now “targeting only higher-value business” and was “avoiding long-term, fixed-price agreements” to ensure that “revenue growth is of good quality”. It said that “short-term external challenges facing the business have no effect on the ongoing execution of the group’s strategy . . . The business remains in excellent operational shape.
Liberum, which acts as a broker on behalf of Accrol, said that while the tissue maker had “seen very substantial cost increases over the last six months”, the business was “in a structurally much stronger position to deal with these pressures than at any time in the past” and that the shares offered strong value.
Tom Fraine and Clive Black, of Shore Capital, said: “We believe the business is doing the right things in terms of mix, cost-control and price recovery in markets where transparent supply constraints are proving challenging for all to manage.” They said that beyond the present pressures there was a “well-invested and resilient everyday business with bright prospects”.
https://www.thetimes.co.uk/article/accrol-feels-pain-of-rising-costs-and-driver-shortage-37p3xm78v
Thanks Mandello. lol essentials, shares buy keep in the draw for future. Gareth Jenkins plenty of experience, will build it up ,would not surprise if take over target in future. there where rumours a while ago over by a big hitter.
Causal, comments like that lead me to think you must be one of those "ANALysts". Gerrit? ??
@causal - Who needs a broker's note and @surprised analysis when you summed up the reason to hold / buy in a mere few words : )
My favourite post on the BB to date
Good time to top up here, everyone has to wipe there Asses, covid or not.
https://twitter.com/surprised_trade/status/1450779698913554432
second broker note out
Second broker, Liberum, note out -
Accrol remains fundamentally strong after significant progress in FY’21
The business remains in excellent operational shape with scalable foundations for growth and a strong market position across UK retail. Acquisitions of LTC and John Dale in FY’21 have provided the company with further scale, complementary new customers, synergies in distribution costs, spare capacity and entry into the complimentary adjacent category of fully flushable wet wipes. Accrol completed the full automation of the Blackburn tissue plant in FY’21, with robotisation replacing all manual finished goods movements. The four converting lines at the LTC plant are already fully automated. With a small element of automation to be completed in Leyland in FY’22E, as a new machine arrives, the Group will have three fully automated greenfield sites to achieve the lowest possible operational cost base in the UK. The group has no further significant capital requirements for the Tissue Converting division. Accrol’s has made significant advancement on its plan to develop its own paper mill. It has finalised the specifications and costs of the machine and the building and is currently running a selection process for the mill’s location. This machine will be a UK leader in efficiency, quality and carbon neutrality. The machine, once completed, will fulfil half of the business’s current tissue requirements. The company is mindful of the current energy costs and their impact on the feasibility of the mill investment, and it will look to secure a long-term energy supply contract, as well as explore options for on-site energy generation before committing to the investment in the mill. No additional funding is expected to be required from shareholders to deliver this investment.
Valuation appears cheap at 7x CY’22E EV/EBITDA
Our Target Price 80p (from 95p) to reflect lowered forecasts.
Btroker note out ....
Impact on forecasts: As a result of this update, we now anticipate FY22E revenues to grow by c.25% YOY
We expect profitability to be significantly H2 weighted given the immediate cost pressures versus the time lag
Investment view:
Accrol trades on a FY22E PE of 16.5x falling to 10.9x in FY23E. A rerating of Accrol to 15.0x-16.0x FY23E PE (in line with listed peer average) implies a valuation of 61.0p – 66.1p, implying upside of 38% to 47% versus last nights close.
Intrinsic value
Based on the average FY2 P/E of the Group’s listed peers, a rerating of Accrol to 15.0x – 16.0x FY23E P/E implies a valuation of 61.0p – 66.1p, equating to upside of 38% to 47%. We believe the Group in its current form can generate revenue of c.£250m and EBITDA in excess of £35.0m over the medium term. Profitability could be boosted further through the development of its planned paper mill, with an update on its status expected at Interim Results. We believe the addition of a paper mill would drive gross margin towards 33%, with EBITDA margins at c.18%. On this basis the Group would be capable of delivering EBITDA in the region of £45.0m, implying significant uplift versus current levels and driving a material improvement in shareholder value.
https://*********************/companies/uk/household-goods/accrol-group-holdings-plc/research/zeus-capital/accrol-group-holdings-plc-acrl-ln-trading-update/92fa8f66-49ba-41ec-be24-c135d0a75b6a/bbece8f1-36a0-495c-9093-f3cae5555a26
Sorry folks - I'm new here and interested. Why the massive fall today?
plenty of other shares trading at cheap, BOO ASOS to name few.
I'm selling out and bought more BOO
Still great growth potential with 2021 buys of wet wipes, john dale purchase north wales, and tissue plant I'm buying at 11p
Lol,..I'll let the first whippings land and see how it feels after the first hard blows....the initial wounds are likely to heal up in a day or two...
Well that's all the bad news out the way I guess the only way is up from now on but this Accrol doing the hard way since coming to the market lol
Yup. She's really, really good at it. Afraid I'm a client too....
Well the money I paid to a dominatrix to humiliate and punish me was well worth it. What did she do, you ask? Well she told me to invest in AIM and buy a pair of crocs.
Wow, they've really kitchen-sinked all the bad news in one RNS, with tightening supply & inflationary pressures. Market hates it.
https://twitter.com/surprised_trade/status/1438433304856956931
small top up to initial holding on that drop at 49.90p ;-)