Accrol Gp Share News (ACRL)

(ShareCast News) - Investors in Accrol Group were feeling flush after the toilet and kitchen paper manufacturer declared a maiden interim dividend thanks to its hedging against Brexit currency effects and a contract with Lidl that adds to its growing roll call of larger retailers.As it continues its strategy of organic growth through discounters and supplying private label products to large retailers, revenue increased 8.8% to £63.9m for the six months ended 31 October, which resulted in a 5.6% increase in profit to £18.2m.Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose 1.5% to £7.1m, while the adjusted gross margin improved by 1.1 percentage points to 28.4% due to significant currency hedging before and after June's EU referendum and strong negotiations on parent reel pricing.The company declared a maiden interim dividend of 2p per share.Net debt narrowed to £19.9m from £23.1m at flotation, when the company raised £63.5m.To mitigate against adverse movements in the dollar and euro exchange rates, the company entered into forward currency contracts either side of the EU referendum, which limited the decrease in the average pound to dollar exchange rate from the 15% to 6%.It also negotiated pricing for parent reels - the large reels of tissue paper from which smaller rolls are produced - as a similar level to the first half of 2016 exit run rate, which delivered a 7% reduction in parent reel pricing from first half of 2016 to the first half of 2017.The company, which floated on AIM in June 2016, increased its shares of the discount market sector to 50% during the period while it won supply contracts with Booker, Pound Stretcher and Lidl, which is expected to generate more than £10m in sales a year.Accrol is building a new 168,000 square feet manufacturing facility at Leyland, Lancashire, which is expected to open at the end of January.Chief executive Steve Crossley, said: "Our strong first half performance demonstrates the success of our strategy of organic growth through discounters and increasing market share through the supply of private label products to some of the UK's largest retailers."We have continued to win new business, including a contract with Lidl ... increased our market share in the discount sector to circa 50% and have made significant progress with our strategic plan of making operational improvements and increasing capacity to ensure we can best meet the growing demand for our products."He added that Accrol remains confident in the outlook for the year.Shares in Accrol Group Holdings were up 0.77% to 127.48p at 1104 GMT.