Accrol Group Holdings PLC (LON:ACRL) almost wiped away its losses as the toilet paper and tissue manufacturer outperformed the market in terms of sales.
The hoarding of toilet paper, which was such a big feature of the early weeks of the coronavirus outbreak, provided only a £3mln benefit for the Blackburn, Lancashire-based group as the business operates primarily on a just-in-time-basis and the majority of extra demand for during this unprecedented period was satisfied by the brand manufacturers, who hold higher levels of stock.
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The AIM-listed company said the panic-buying period and vastly increased promotional activity from the brands reduced the market share of private label brands, for which it is a supplier to several major supermarket and discounter chains, for the first time in a decade.
However, Accrol grew revenues from its core business toilet paper, kitchen roll and facial tissues by 14.5% to £133.6mln in the year to April 30, 2020, compared to sector growth of 7.7%.
Underlying profits (EBITDA) grew tenfold to £10.6mln as profit margins improved as the business continued to expand into higher-quality and higher-value products.
At the statutory level, losses before tax fell to £1.9mln from £14mln.
The group did not propose a final dividend but said that a payout is “likely in the medium term” if its financial performance continues to improve on its current and expected trajectory.
Accrol said the short-term rise in demand for toilet tissue from the lockdown “has unwound” and as consumer activity has normalised, sales have returned to pre-lockdown levels in the past quarter.