The proposed placing will likely see shares issued at 50p less than 18 months since the Group IPO'd on AIM at 106p.
Companies: Accrol Group Holdings plc
After it suspended trading six weeks ago, toilet paper manufacturer Accrol (LON: ACRL) has announced this morning the suspension has been lifted and the Group is now seeking to raise £18m.
The proposed placing for the funds will likely see 36 million new shares issued at 50p per share, while directors in the Group will contribute £200,000.
The Blackburn loo roll manufacturer who is a major supplier to discount supermarket LIdl, listed on London's junior market mid-2016 at a price of 106p per share.
On October 5 the Group announced it would suspend trading pending discussion with its lenders as it sought a solution to its short-term funding problems.
Accrol has recently come under industry-wide cost pressures including a 40% price rise in pulp paper. The Group had little success passing these costs on to customers.
Commenting on the rocky period Chairman Peter Cheung said:
The past few weeks have been extremely challenging for Accrol and its shareholders, as we navigated our way through industry-wide issues and sought a solution to the Group's short-term funding problems. We believe that the business is through the worst and thank all our investors for their patience, during the period of suspension. The Board is very grateful to the Company's shareholders and its bank for supporting the business through this difficult period.
The update went on to say...
"Given the ongoing input cost pressures, the Board expects that the Group will break even or make a marginal loss in the year to 30 April 2018 at the adjusted EBITDA level. In view of this, the Board will not be proposing a final dividend for the current year."
Given the proposed new share issue price of 50p the stock is trading at 42p, down 68% against its closing price before suspension to trading 6 weeks ago. This represents a 60% price drop from its listing price and a 75% fall from its all-time of 165p in May '17.
The Group currently has a Market Cap of £122m and trades at a historic PE ratio of 13x.
