AndyRB
27 Nov 2017
Placing I'm wondering if the placing will even take place why would any one pay 50p when they can buy in the market for 36p , and if it doesn't take place the company is toast . I see zero value for shareholders on the horizon.DYOR
PIE-EATER
26 Nov 2017
Re: Says it all Unfortunately I am not sure because the first thing you need to do is take out family and BoD holdings. Then, look at major investors...Miton Schroders etc probably hold half (or more) and they would no doubt be the first clamouring for action if it was an option....lets not forget they have been shafted BIG style. Then, PIs could piggy back comparatively cheaply.All IMVHOPE
Phillip Reid
25 Nov 2017
Re: Says it all P EI wonder if there is a case for class action by shareholders here?In a previous investment of mine, a largish group of shareholders are involved in a legal action against the company, or some of the directors of the company, we were previously invested in, with a financial institution likely to join the fray. Regards
PIE-EATER
24 Nov 2017
Re: Says it all Phillip,I think we would have all had a chance if it weren't for the deception at this companyBalances may be hit, pride may be hurt, but it is very difficult to legislate for deception like this. "Better" investors than we have been dupedPE
Phillip Reid
24 Nov 2017
Re: Says it all P EYour post 8.35 today has convinced me, and I am out. It really looks like a rocky ride for quite some time at least. I have been slicing lumps out my portfolio to raise cash to buy an apartment back in the UK, so Accrol had to go. Having bought in for growth and a decent divi, it looks like not much of either for a long time. This loss will help balance out some of the profits that I am taking elsewhere.Having said that, when I am back in the UK. I will definitely be making sure that I buy Andrex when the occasion arises. LOLRegardsPR - the traditional common investor (P I) behaviour here, buy at the top and sell (possibly) at the bottom. Doh!
PIE-EATER
24 Nov 2017
Re: Says it all People tend to love or hate Simon Thompson, and personally I am leaning more to the former camp. Like many people he gets things wrong, and the further down the market cap scale the greater the chance of this happening. So, when my previous post is read, and you look between the lines, it becomes more apparent just how bad the governance was, how poor the operational / cashflow planning was and how much there was in the way of smoke and mirrors (aka deception or withholding of information)ACRL is now in a grade 1 mess............and too big of one for the likes of even Mr Jenkins (whom I rate highly) to sort out quickly. Perhaps in 3 years time his reputation will have been enhanced and ACRL will have become a steady company. But I am not prepared to risk it and have sold all the holdings from our family accounts.Trust takes a long time to build up and is easily destroyed. Accrol have decimated it!GL to all those braver or with a better insight than me.PE
PIE-EATER
24 Nov 2017
Says it all Simon Thompson in the IC......says it allIt’s not often that a company announcement leaves me speechless, but that’s what Blackburn-based tissue maker Accrol (ACRL:40p) achieved this week.I advised buying the shares around the 100p mark when they listed on Aim (‘Clean up with Accrol’, 6 Jun 2016), and subsequently recommended running profits at 144p when the company issued an in-line trading update in September and appointed a new chief executive, Gareth Jenkins, from DS Smith, one of Europe’s leading packaging companies, where he had been managing director of the UK and Ireland packaging division (‘A trio of small-cap plays’, 18 Sep 2017).At the time, analyst Mike Allen at house broker Zeus Capital was predicting a rise in Accrol’s pre-tax profits from £13.5m to £14.6m on revenues up 15 per cent to £155m in the 12 months to the end of April 2018, after taking “more prudent gross margin assumptions” and noting that the challenging trading environment “has made passing on increased costs to customers more difficult”. EPS estimates of 12.5p covered last year’s payout of 6p a share more than two times, implying the shares were being priced on a modest 11.5 times earnings and offered a 4.2 per cent dividend yield. Debt was not an issue as net borrowings of £19m at the April 2017 year-end represented only 1.2 times historic cash profits of £16.1m.Despite the reassuring trading update in September, a month later the company issued a profit warning, noting that profits were being hit by input cost pressures resulting from a rise in parent reel prices; slower-than-anticipated product price increases; and a significant fine being imposed by the Health and Safety Executive (HSE) than was previously expected in relation to an incident that occurred prior to the IPO, and was not disclosed in the Admission document. To compound matters, the company’s cash position was being squeezed, prompting the suspension of the shares to enable its bankers, HSBC, and major shareholders to come to some arrangement. I covered the announcement at the time (‘Trading plays’, 9 Oct 2017).The full extent of the problems were disclosed this week when the company announced a proposed placing of 36m shares at 50p each to raise £18m, subject to shareholder approval at a general meeting on Friday 8 December, a fundraise that will increase the shares in issue by 38 per cent. However, what really shocked me was the update on the net debt position, which has ballooned to around £22m, even after factoring in the proceeds of the placing, a marked deterioration since April. Only a small part of the increase relates to the HSE fine which will be in the range of £550,000 to £2.9m, subject to a one-third discount for Accrol’s early guilty plea. Sentencing is expected on Wednesday 17 January 2018.Furthermore, instead of delivering cash profits of £17.5m in the year to the end of April 2018 as Mr Allen had predicted in early September, the board now expects “break-even or a marginal loss”. The directors point to the 13.7 per cent rise in pulp prices between January and October, a cost pressure acerbated by foreign currency movements, and one that has increased parent reel input costs. The problem I have with this is that these factors are hardly new; the company highlighted them at the time of the full-year results in the summer, and again in the September in-line trading update. Also, sterling has actually appreciated against the US dollar since both those announcements were made, and has risen against the euro since the September trading update too.The lack of visibility on Accrol’s earnings is another concern, as the directors go to pains to point out that the trading performance for both the 2018 and 2019 financial years is extremely sensitive to a number of key variables – parent reel pricing, the exchange rate between sterling and the US dollar, and the level of turnover – which could lead to a breach of the cash profit covenants on its credit facilit
stuffee
23 Nov 2017
Re: Was does the price say about the placing... Pie EWhen I first saw the headline of the 50p share issue and had heard favourable feed back on the new Chief Exec, Gareth Jenkins, I thought it might be worth a brief punt and indeed was concerned existing holders had been denied right to subscribe. However, on reading the Circular, I was alarmed at the risk.The Directors, advised by Zeus, could not even make the standard statement expressing view that Accrol had adequate working capital AFTER allowing for the £18m raised. I'm concerned Accrol should have raised more and it will attempt to come back for a second helping (if available) in a few months. It is of course still possible, Accrol will successfully implement the desired price increases ( all competitors must be in the same boat re paper raw material prices), profits will rapidly recover and we will all regret not loading up at 50p.I guess the Market has had the same reaction, initial support by institutions to tuck in at 50p, followed by doubt when reading the detail and hence the share price fall to 40p.
PIE-EATER
23 Nov 2017
Was does the price say about the placing? Just wondering what people think re the placing price and current price?Obviously some large shareholders and BoD members will have committed to 50p, but has the placing been fully covered?As things stand, these people stand to lose an immediate 15-20% which I can't think they would be happy about given the governance within this company.Yes it could be that buying now will give a profit c 8p if all goes swimmingly, but I for one see that as something of an increased risk.All thoughts welcome....thanks in advancePE
PIE-EATER
22 Nov 2017
Re: Questor says sell...AGM Would love to (especially as comparatively local - not London) but hold in nominee account so not easy and not entirely sure will be back from France / Belgium until very late previous night.I sincerely hope that any shareholders who do manage to attend give the "ruling family" and previous BoD a serious grilling to get to the bottom of all the facts.PE
Phillip Reid
22 Nov 2017
Re: Questor says sell Is anyone going to the general meeting on 8 December in Manchester?
Phillip Reid
22 Nov 2017
Re: Questor says sell There are unknowns as you say, but with a new factory and a new distribution depot and a massive fire at their main competitor's as reported by sharegardener below (albeit mainly pictures). I don't see the need to be concerned about not fulfilling orders. I know staff have been laid off, but one would imagine that would be due to more efficient production in new premises.The new CEO seems to be well spoken of and is putting his own money, albeit only 100,000 pounds, but not so insubstantial, into the business after being there for over 2 months and getting a grasp on just how things are, and should instill some confidence going forward. The new CEO should definitely be considered some sort of balance to any criticism of the previous managements competency.Also the longer it takes to determine any results from the H&S incident, the more time they have to accumulate earnings to establish a more stable situation. I think the present SP could be a reasonable buying opportunity. All IMHORegards
crassus
22 Nov 2017
Re: Questor says sell The emergency fund raising is a consequence of misjudging their costs and their ability to pass those on. This puts a big question mark over managements competency. As a customer do you want to stake everything on the same management's assurances that that is a one off and they will do better in future. If they are wrong then the worst case scenario is that the company goes into administration and the customer is left with empty shelves. It would be prudent to have a back up plan to avoid that.Also does this fund raising cover the potential costs from the H&S incident? If not a further fund raising could be necessary.
Phillip Reid
22 Nov 2017
Re: Questor says sell crassus'' If I was a customer I would be thinking about a contingency plan in the event that Accrol cannot fulfil my orders. ''I would imagine, having been in retail management and having had my own business that some customers would already have more than one supplier and why would Accrol not be able to fulfill (sic recte) orders?Regards
Ripley94
22 Nov 2017
Re: Questor says sell Last looked 16-07-17.Post link 24-06-16 mistake 22nd .. nothing post.Not looking to good .. an article today on share prophets.
