Accrol Gp Share News (ACRL)

(Sharecast News) - Tissue products company Accrol said on Wednesday that it continued to perform "well" in its final quarter, achieving accelerating monthly exit run-rates in line with its expectations.
The AIM-traded firm said that as a result, the results for the year ended 30 April were expected to be in line with market expectations.

Total revenues in the year were around ?133.8m, with core revenues increasing during the period by 13.7% to ?132.7m, which compared well with overall market growth of about 8%.

Net debt reduced ahead of market expectations, ending the period at ?17.9m, compared with ?24.8m on 31 October and ?27.1m on 30 April 2019.

Looking at the impact of the Covid-19 coronavirus pandemic, the group said it initiated a "rapid and early" response to the spread of the virus, implementing a management strategy throughout the business to protect the health and wellbeing of its people.

It said all at-risk employees were self-isolated at home from 20 February, with social distancing implemented for factory-based employees and increased cleansing facilities and protocols established across all of its sites.

All office-based staff, meanwhile, were moved to working from home at lockdown.

"The board is pleased to report that this strategy is working well and that strong levels of productivity have been maintained throughout the lockdown restrictions," the board said in its statement.

"There has been no requirement to furlough employees."

Looking ahead, Accrol said that with margins "significantly recovered" and core revenues at record levels in the 2020 financial year, the group had entered the new financial year in a stronger position than before, and was well positioned to continue delivering sustainable profitable growth.

It said further improvements to quality and service had been made in recent months, meaning the board was confident that would help Accrol secure higher-value business over the longer term.

In addition, it said its response to the unprecedented consumer demand experienced in March, as lockdown measures tightened, had reinforced its strengthening relationships across its UK retail customer base.

Whilst some increases in input costs were expected in the near term as a result of the Covid-19 pandemic, the board said it was confident that the group's new business model was "robust", and structured to enable the swift management of fluctuating prices.

Overall, the company said it was in a much-improved financial position, with considerable headroom on its banking covenants.

The reduction in net debt was expected to continue and remain comfortably below 2x net debt-to-EBITDA in the full year ending 30 April 2021.

"The board views the future with increasing confidence but remains mindful of the uncertainty and challenges which the Covid-19 pandemic continues to place on organisations globally," the directors said in their statement.

"What is clear however, is that demand for the group's new range of higher-value products, combined with further improved quality and consistently high level of service, put the company in a strong position as it enters the 2021 financial year."

Accrol said the announcement of its 2020 results was scheduled for early September, assuming no delay to the audit process resulting from the Covid-19 crisis.

At 1544 BST, shares in Accrol Group were down 7.14% at 39p.