Accrol Group Holdings - Trading Update
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Accrol Group Holdings plc
("Accrol", the "Group" or the "Company")
For the full year ended 30 April 2020
Accrol (AIM: ACRL), the UK's leading independent tissue converter, announces the following trading update ahead of its Final Results for the year ended 30 April 2020 ("FY20" or the "Period").
The Group continued to perform well in the final quarter, achieving accelerating monthly exit run-rates in line with the Board's expectations. Accordingly, the results for FY20 are expected to be in line with market expectations.
Total revenues in FY20 were c.£133.8 million with core revenues increasing during the Period by 13.7% to £132.7 million (FY19: £116.7 million), compared with overall market growth of circa 8%. Net debt1 continued to reduce ahead of market expectations, ending the Period at £17.9 million, compared with £24.8 million at 31 October 2019 and £27.1 million at 30 April 2019.
The Group initiated a rapid and early response to the global spread of COVID-19, implementing a management strategy throughout the business to protect the health and wellbeing of its people:
All at risk employees were self-isolated at home from 20 February 2020;
Social distancing was implemented for factory-based employees;
Increased cleansing facilities and protocols were established across all sites; and
All office-based staff 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. There has been no requirement to furlough employees.
With margins significantly recovered and core revenues at record levels in FY20, the Group has entered the new financial year in a stronger position than ever before and is well positioned to continue delivering sustainable profitable growth.
Further improvements to quality and service have been made in recent months. The Board is confident that this will help Accrol secure higher-value business over the longer term. In addition, the Group's rapid response to the unprecedented consumer demand experienced in March, as lockdown measures tightened, has reinforced its strengthening relationships across its UK retail customer base. Whilst some increases in input costs are expected in the near term, as a result of the COVID-19 pandemic, the Board is confident that the Group's new business model is robust and structured to enable the swift management of fluctuating prices.
Overall, the Company is in a much-improved financial position with considerable headroom on its banking covenants. The reduction in net debt is expected to continue and remain comfortably below 2x net debt to EBITDA in the full year ending 30 April 2021 ("FY21").
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. 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 FY21.
The announcement of the Group's FY20 results is scheduled for early September 2020, assuming no delay to the audit process resulting from the COVID-19 situation.