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Accrol - Looking to invest in its own paper mill with fast payback

February 2021

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • ACRL
  • Price:
  • 61.5p
Accrol has delivered a strong H1, with sales -4%  at £62.3m but the comparisons are not meaningful as last year had seen panic buying of toilet roll during the first national lockdown. Helped by the move to higher value products, which I outlined last time, gross margin improved to 23.8% from 19.7%. As a consequence of this movement, adjusted EBITDA was +69% to £5.4m on an underlying basis.CEO Gareth Jenkins says H2 sales are looking “incredibly strong,” in part helped by the acquisition of LTC and now talks about a mid teen ebitda margin target. People costs have fallen with employee numbers down to 325 and a new IT system in the summer has led to improvements in areas like logistics. Most e ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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