Just 16 months since it IPO'd, the Company has suspended trading of its shares, pending discussions with its lenders.
Companies: Accrol Group Holdings plc
Surprising news from the Accrol camp today with the release of a disconcerting trading update outlining the difficulties the toilet paper company is facing.
Accrol (AIM: ACRL), who IPO'd in June last year, has suspended trading of its shares this morning "pending clarification of its financial circumstances."
The Lancashire-based soft tissue manufacturer said it is facing a number of challenges, including increasing input costs, delays in materialisation from product price hikes, and higher than anticipated operational change costs.
These woes have been further reinforced by a Health and Safety incident in May 2016, which...
"May now result in a more significant fine being imposed by the Health and Safety Executive (HSE) than was previously anticipated...Any resulting fine may have a material impact on the Company's cash position."
Management went on to say that this will impact their full-year performance, noting:
"The Board now anticipates that earnings will be significantly below existing market forecasts for the current financial year, and as a consequence net debt will be correspondingly higher at year end."
The Group's corporate broker Liberum released a note on the situation, clearly frustrated by the news:
"In a very disappointing and rather unforeseen set of circumstances, we are putting our forecasts and recommendation under review."
Yesterday's closing share price of 132p represents a 20% increase from its IPO price in June 2016 but is below the all-time high of 165p in May this year. Prior to the suspension of trading, ACRL traded at a PE ratio of 10x, well below the industry average of 19x, and had a market cap of £129m.
