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08 Jan 2019 | 09:07

Accrol Group warns on earnings amid weaker pound, rising tissue prices

Accrol Group warned Tuesday adjusted earnings would undershoot market expectations for the full year blaming a weaker pound and a rise in tissue prices.

The company forecasts adjusted earnings (EBITDA) in 2019 would be about £1m, well below the current market expectations of £4.6m.

Macro-economic headwinds potentially contributing a total of about £8.5m additional costs in 2019, would likely offset the operational improvements and sales price increases implemented, the company said.

The company's turnaround plan was expected to result in up to £8.0m of exceptional costs in the business during 2019.

The negative impact of rising input costs and foreign exchange on the group's profitability in first half of 2019 amounted to £5m. A further decline in sterling would continue to ramp up costs, the company warned.

'Should the current USD exchange rate and high tissue prices prevail, the Board estimates a further impact on input costs in H2 FY19 of c.£3.5m,' it said.

Group revenue in 2019 was expected to increase by about 8%, broadly in line with market forecasts to about £126m from a year earlier. 'The strategic plan for the Group remains on track, operationally, and the directors firmly believe Accrol Group will exit FY19 in a significantly stronger operational position,' said Gareth Jenkins, Chief Executive Officer of Accrol Group.

At 9:07am: (LON:ACRL) Accrol Group Hldgs Plc share price was -7.25p at 13.75p

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