06 October, 2017 NewsToilet roll maker Accrol was in talks with its bankers yesterday
Toilet roll maker Accrol was in talks with its bankers yesterday. This comes after the company suspended trading in its shares and warned that profits would be “significantly below market forecasts” in 2018.
The toilet roll tissue maker said it was facing “more challenging trading conditions” which “are having a significant effect on the trading performance”.
It stated that whilst revenues were expected to be roughly in line, earnings are expected to be “significantly below existing market forecasts” for 2018 with net debt “correspondingly higher” at year end.
Meanwhile, reports have stated that the company was discussing changing the terms of its overall bank convenants.
A particular shareholder stated that the company held a conference call yesterday, and stated that it expected the share suspension to be “a short-term blip”, with the shares trading again next week.
The company was one of the largest recent Aim listings, as it reduced their holdings, as did private equity bankers NorthEdge Capital.
The plan to seek a temporary suspension of the shares has been unveiled whilst Accrol launches a “wide-ranging review” of the overall business.
This news comes after the appointment of Gareth Jenkins, whom is a former executive with paper company DS Smith, who took the position of Accrol’s chief executive in September.
Accrol’s main customer is Lidl, though analysts have stated a domestic demand for the company’s own-label toilet paper has weakened. This is apparently due to the Brexit vote.
Robert Waldschmidt, a paper industry analyst from Liberum, has described Thursday’s news as “a very disappointing and rather unforseen set of circumstances”.
Liberum took up its position as joint corporate brokers in July.
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