Accrol (ACRL) , a UK-based independent tissue converter, released its full year results for the year ended 30 April 2023, detailing strong growth in both revenue and profit, driven by increasing market share and volumes.
Revenues increased 52% to £241.9m, driven by 7.7% volume growth and successful price increases, reflecting strong customer relationships and cost recovery. Market share increased from 19.5% in FY22 to 21.5% at the end of the latest reporting period.
Adjusted EBITDA rose by 71% to £15.6m, whilst operating profits increased to £2.4m. Profitability grew through price increases and market share gains.
The group's adjusted net debt improved in the period to £26.8m (FY22: £27.5m) representing 1.7x leverage. Accrol anticipates further reduction to less than 1.0x in FY24 through strong cash generation.
Accrol’s wet wipes business, John Dale, has seen 169% growth since it was acquired in 2021. John Dale saw a 57% increase in revenue in the period. This growth was mirrored by its Oceans brand - which makes plastic free toilet paper - with revenue up 45% year on year.
The cost-of-living crisis underpinned demand for Accrol’s value products, and the company said it is confident in further growth in FY24, building on its market-leading position. Accrol’s margins are back to pre-pandemic levels, with this margin recovery quicker than expected. As such, FY24 EBITDA is expected to be ahead of the board's prior expectations.
Gareth Jenkins, Chief Executive Officer of Accrol, said: "The Group has performed strongly in a challenging year, gaining further market share through its great value product range, broad retailer base, and new routes to market and is in an enviable position to take advantage of the changing dynamics in consumer spending, which are particularly evident in the tissue market.”
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Accrol is a leading tissue converter and supplier of toilet tissues, kitchen rolls, facial tissues, and wet wipes to many of the UK's leading discounters and grocery retailers across the UK. Accrol is well placed in the UK soft tissue market - worth £1.6bn - with private label products comprising around 50%. Accrol is the leading supplier to the private label market, which is growing at over 8% year on year.
The rapid growth of private label products is being driven by suppliers like Accrol producing the best quality for price point paid. This rings particularly true as the cost-of-living crisis persists, with recent research from the Data & Marketing Association concluding that 48% of consumers say they are ready to ‘abandon’ their favourite brand if prices rise further.
As FY24 begins, the company expects volume growth to outpace the private label sector. Despite expected price reductions on the shelf, Accrol's margins are improving faster due to recent investments and a better revenue mix, leading to FY24 EBITDA surpassing prior board expectations.
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