Strong start to public life
​Accrol is a leading independent tissue converter. It manufacturers toilet rolls, kitchen rolls, facial tissues and AFH products to supply some of the UK's largest retailers.
A new contract today with an undisclosed major global retailer underpins our revenue forecasts, delivering an expected £10m plus full-year revenue contribution at the manufacturer's selling price. It should also enhance profitability as anticipated, as Accrol can deliver these implied volumes from its existing capacity.
In a period of market uncertainty this contract keeps the group on track to deliver forecast growth, and helps confirm its competitive positioning in key markets, toilet paper, kitchen rolls and facial tissues. Two months into the current financial year to 30 April 2017, management have stated it is comfortable with market forecasts and opportunities. The group is also significantly hedged against any adverse currency movements for the duration of that period.
We maintain our current year (2017E) forecasts ahead of results on 22 July, underpinned by the new contract. The group's planned progressive dividend policy would see combined dividends this financial year equivalent to a 5.6% yield, with the outlook for future growth underpinned by strong cash conversion and revenues generated from supply of resilient, non-discretionary consumer products.
Accrol Group Holdings is a holding company. Through its subsidiaries, Co. is a tissue converter manufacturing toilet rolls, kitchen rolls, facial tissues and away from home products (AFH). Co. supplies a range of independents, discounters and multiples as well as a variety of AFH customers throughout the U.K. Co. imports Parent Reels from around the world and converts them into finished goods at its manufacturing, storage and distribution facilities in Blackburn and Leyland, Lancashire.
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