OREANDA-NEWS. Accrol Group Holdings plc, a leading independent tissue converter, today announces its intention to apply for admission of its issued and to be issued ordinary shares to trading on the AIM market of the London Stock Exchange ("Admission") together with an associated fundraising. Dealings are expected to commence on AIM on 10 June 2016.  Zeus Capital Limited ("Zeus Capital") is acting as Nominated Adviser and Sole Broker to the Company.

Accrol imports industrial sized paper reels ("Parent Reels") from around the world and converts them into toilet, kitchen, facial and other tissue products at the Company's 350,000 sq. ft. manufacturing, storage and distribution facility in Blackburn, Lancashire. Accrol currently manufactures approximately 16 million units per week and supplies some of the UK's largest retailers.

Accrol started converting operations in 1993 and has grown to become the leading supplier of tissue products to the UK discount market, supplying both that market and some of the UK's largest retailers.  Accrol has a 35 per cent. market share of the discount market and 7 per cent. of the overall UK tissue market. The Company's exposure to retailers operating in the discount market sector ("Discounters") has driven continuous financial growth over the last seven years and the directors and proposed directors of the Company ("Directors" and "Proposed Directors" respectively) believe the business is well positioned to continue to benefit from growth in the discount market and the market for private label products (being goods produced under a customer's own brand or under a non-branded or less well-known brand name ("Private Label")).

The Company has sought to increase manufacturing capacity ahead of growth throughout its development and this is reflected in 15 converting lines having been installed from 2004 to February 2016, with a combined maximum production capacity of approximately 118,000 tonnes per annum.  The Company has committed c.?18.2 million of capital expenditure in the last three years and has recently purchased two additional converting lines, with c.25,000 tonnes per annum capacity, taking total capacity to c.143,000 tonnes per annum.

Highlights

·     Leading independent tissue converter, manufacturing toilet rolls, kitchen rolls, facial tissues and away from home ("AFH") products to UK retailers, manufacturing approximately 17 million units a week

·     Discount market growing at 10% per annum

·     Proven business model and strategic plan to deliver future growth and returns

·     Comparable quality at lower cost to peers

·     Experienced management team

·     Sales CAGR of c.16.2% over the last three years and EBITDA CAGR of c.13.7%, with strong cash generation

·     Expected dividend yield of 6%

·     IPO proceeds will be used to refinance the business and provide platform for further growth

·     Over 60% of Accrol's converting lines less than five years old

Peter Cheung, Chairman of Accrol, commented: "We are delighted by the level of interest and support we have received from high quality institutional investors. We are a very well invested company with an attractive and progressive dividend policy and we look forward to creating value for all of our shareholders in this new and exciting stage in Accrol's development."

Majid Hussain, the outgoing CEO of Accrol, added: "My father, Jawid Hussain, started this business in 1993 and the family has built it into the successful company it is today. NorthEdge's investment in 2014 provided the business with the funding to expand its offering and operations further and we believe that now is the right time for the business to IPO to provide a platform to support further contract wins with new customers. The Hussain family will be stepping back from their day to day roles in order to hand over to the new executive team and will remain with the Company as consultants to facilitate a managed transition."

Steve Crossley, proposed Chief Executive Officer, said: "I am delighted to be joining Accrol at such an exciting time in its development.  The Company has developed very strong relationships with its suppliers and customers and has invested significantly for continued growth.  I look forward to working with the team at Accrol to continue to build on its success."