Accrol Group Holdings plc (LON:ACRL) was the subject of conversation when DirectorsTalk caught up with Fund Manager Gervais Williams. We asked, having seemed to have navigated recent supply chain disruptions and pricing pressure well. How do you see them?
“It’s interesting, if anything actually I think they had a tougher period perhaps 9 months ago when they had problems with their logistics, their contractor that delivers the toilet paper to the customers – mainly supermarkets in the UK – were struggling to recruit drivers and their delivery standards went down. Because their delivery standards weren’t so good, that led to them to having some real margin pressure and they weren’t able to get the cost increases through.
What’s happened more recently is they’ve resolved those problems, service levels have moved back up to where they were previously and they’ve got quite a large production capacity in the UK. We are now seeing real interest in particular in own brand products.
In terms of the share price, it’s been quite weak actually over the last 12 months but most particularly, from our point of view, the ability to generate cash going forward is still very attractive and that’s why it’s retained in the portfolio even though the share price has been disappointing over the last 12 months.”
Accrol Group Holdings (LON: ACRL) is the market leader in the fastest growing segment of UK consumer soft tissue market, Private Label (also knows as own label). Private Label comprises 50% of the total UK consumer soft tissue market, which is worth £2.1bn (retail sales).
