Shares in Accrol Group Holdings PLC (LON:ACRL) soared in early trading Tuesday after the toilet tissue maker forecast a return to profitability in 2019.
In its results for the first half, the group said it had completed a “highly complex” turnaround and as a result estimated adjusted underlying earnings (EBITDA) for the full year would be around £1mln.
READ: Accrol shares down the pan as it announces FCA investigation
The company also said it had exited its lower margin Away From Home operations to focus on its core business, while net debt had been cut by £6.7mln to £22.6mln.
In the half-year period itself, the adjusted EBITDA loss had narrowed year-on-year to £1.1mln from £1.5mln while revenues had fallen to £57.6mln from £72.3mln.
Revenues from the group’s top 10 customers had increased by 11% to £52.5mln.
Dan Wright, chairman of Accrol, said that while he was pleased with the outcomes achieved internally to date, it was disappointing that the firm was “in effect, three months behind where we expected to be on the financial recovery”.
Accrol has faced a period of uncertainty while attempting to turn around the business, with an update earlier in January saying Brexit-induced weaknesses in sterling had dented its performance.
Investors also seemed to be paying little heed to a looming FCA investigation that was announced on Monday, which covers statements from 2017 including an October trading update that said earnings for the year ending 30 April 2018 would be significantly below market expectations, reversing a statement from the previous month that it was trading in line with revenue and profit expectations.
In a separate announcement, Accrol said its chief financial officer, Steve Townsley, had stepped down due to health reasons and would be replaced by Hannah Argo as interim CFO.
Accrol shares were up 23.9% at 14.2p.