Currency in GBP
Last close As at 24/03/2023
GBP0.63
▲ −0.90 (−1.41%)
Market capitalisation
GBP140m
Research: Industrials
Accsys has a stated strategy to expand its total processing capacity from 60,000m3 currently to 200,000m3 by 2025. Reported progress at Arnhem – which we visited recently – and Hull with a new US facility also given the green light, represent significant waypoints on this plan which is very much on track. Given strong market demand, we see no reason to change our primary assumptions for FY22 or subsequent years at this stage.
Written by
Toby Thorrington
Accsys Technologies |
Capacity expansion on track |
Trading & US JV update |
General Industries |
4 March 2022 |
Share price performance
Business description
Next events
Analysts
Accsys Technologies is a research client of Edison Investment Research Limited |
Accsys has a stated strategy to expand its total processing capacity from 60,000m3 currently to 200,000m3 by 2025. Reported progress at Arnhem – which we visited recently – and Hull with a new US facility also given the green light, represent significant waypoints on this plan which is very much on track. Given strong market demand, we see no reason to change our primary assumptions for FY22 or subsequent years at this stage.
Year end |
Revenue (€m) |
EBITDA* |
PBT* |
EPS* |
P/E |
EV/EBITDA |
03/20 |
90.9 |
5.9 |
(2.2) |
(0.01) |
N/M |
43.0 |
03/21 |
99.8 |
9.3 |
1.1 |
0.01 |
N/M |
26.9 |
03/22e |
114.0 |
10.4 |
0.3 |
0.00 |
N/M |
35.9 |
03/23e |
151.3 |
27.6 |
12.3 |
0.04 |
40.4 |
12.1 |
03/24e |
193.2 |
41.3 |
23.4 |
0.08 |
22.2 |
7.5 |
Note: *EBITDA (pre IFRS 16 from FY21), PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Firm pricing driving FY22 revenues year to date
In FY22 trading to the end of January, volumes are currently tracking c 2% lower than the prior year – expansion at Arnhem has required some plant downtime in H2 – but revenue is up c 12%, with progressive price increases passing on higher input costs. The final quarter of the financial year is to be characterised by strong demand, Arnhem (three reactors) operating at full capacity and an additional price increase made in January. Updated guidance (now steering towards the lower end of the range) is in line with our existing FY22 €10.4m EBITDA estimate.
Capacity expansion progressing
A fourth Accoya reactor at Arnhem (adding c 20,000m3 capacity) together with new, larger wood handling equipment with enhanced capability is now in the final stages of completion ahead of starting operation in April. The new Tricoya facility at Hull is also on track against previous updates for commercial operation to begin in July. In addition, Accsys’s US JV with Eastman now has debt funding in place for the JV to proceed to full construction and operation of the first Accoya plant outside Europe. At a cost of $136m, with an expected two-year build phase and a three-year ramp to capacity, it replicates technology at Arnhem, initially with a two-reactor, 43,000m3 capacity. Engineering work is already underway, and orders have been placed for longer lead time equipment. As before, Accsys’s 60% share of the $66m equity portion is to come from funds raised in May 2021. The new JV debt arrangements at attractive rates are an additional, external endorsement of the new US facility.
Valuation: Higher capacity should drive valuation
We believe that the current share price can be justified by earnings and cash flows from the Arnhem/Accoya operations on a standalone basis. Further building capacity could create more value over the next few years. On our estimates (based on Arnhem and Hull profit contributions), Accsys is trading on FY24e P/E and EV/EBITDA multiples of 22.2x and 7.5x respectively.
Exhibit 1: Financial summary
€m |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
2022e |
2023e |
2024e |
||
March |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
46.077 |
52.769 |
56.529 |
60.911 |
75.153 |
90.909 |
99.803 |
113.960 |
151.339 |
193.223 |
Cost of Sales |
|
|
(33.842) |
(34.597) |
(42.175) |
(47.270) |
(56.517) |
(63.402) |
(66.715) |
(77.034) |
(95.887) |
(122.105) |
Gross Profit |
|
|
12.235 |
18.172 |
14.354 |
13.641 |
18.636 |
27.507 |
33.089 |
36.927 |
55.451 |
71.118 |
EBITDA* |
|
|
(1.275) |
2.384 |
(1.484) |
(3.500) |
0.903 |
5.880 |
9.291 |
10.383 |
27.608 |
41.300 |
Operating Profit (before GW and except.) |
|
(3.750) |
(0.288) |
(4.197) |
(6.577) |
(3.063) |
1.364 |
4.530 |
4.149 |
17.166 |
29.945 |
|
Intangible Amortisation |
|
|
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
Exceptionals |
|
|
(2.670) |
0.000 |
0.033 |
(1.650) |
(1.440) |
3.661 |
(0.797) |
0.080 |
0.000 |
0.000 |
Other |
|
|
(1.098) |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
(0.144) |
(0.246) |
(0.364) |
(2.014) |
Operating Profit |
|
|
(7.518) |
(0.288) |
(4.164) |
(8.227) |
(4.503) |
5.025 |
3.589 |
3.983 |
16.802 |
27.932 |
Net Interest |
|
|
(0.135) |
(0.178) |
(0.300) |
(2.174) |
(3.117) |
(3.517) |
(3.249) |
(3.596) |
(4.546) |
(4.546) |
Profit Before Tax (norm) |
|
|
(3.885) |
(0.466) |
(4.497) |
(8.751) |
(6.180) |
(2.153) |
1.137 |
0.307 |
12.256 |
23.386 |
Profit Before Tax (statutory) |
|
|
(7.653) |
(0.466) |
(4.463) |
(10.401) |
(7.620) |
1.508 |
0.340 |
0.387 |
12.256 |
23.386 |
Tax |
|
|
(0.607) |
(0.402) |
(0.666) |
0.251 |
0.782 |
(0.631) |
(1.251) |
(1.554) |
(4.053) |
(6.445) |
Profit After Tax (norm) |
|
|
(5.590) |
(0.868) |
(5.163) |
(8.500) |
(5.397) |
(2.784) |
(0.114) |
(1.247) |
8.202 |
16.941 |
Profit After Tax (statutory) |
|
|
(8.260) |
(0.868) |
(5.129) |
(10.150) |
(6.837) |
0.877 |
(0.911) |
(1.167) |
8.202 |
16.941 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Number of Shares Outstanding (m) |
|
88.5 |
89.6 |
90.4 |
111.2 |
116.3 |
132.7 |
164.9 |
189.3 |
192.4 |
192.4 |
|
EPS - normalised (€) |
|
|
(0.06) |
(0.01) |
(0.05) |
(0.07) |
(0.04) |
(0.01) |
0.01 |
0.00 |
0.04 |
0.08 |
EPS - statutory (€) |
|
|
(0.09) |
(0.01) |
(0.05) |
(0.08) |
(0.05) |
0.02 |
0.00 |
0.00 |
0.04 |
0.08 |
Dividend per share (€) |
|
|
0.0 |
0.0 |
0.0 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin (%) |
|
|
26.6 |
34.4 |
25.4 |
22.4 |
24.8 |
30.3 |
33.2 |
32.4 |
36.6 |
36.8 |
EBITDA Margin (%) |
|
|
-2.8 |
4.5 |
-2.6 |
-5.7 |
1.2 |
6.5 |
9.3 |
9.1 |
18.2 |
21.4 |
Operating Margin (before GW and except.) (%) |
|
-8.1 |
-0.5 |
-7.4 |
-10.8 |
-4.1 |
1.5 |
4.5 |
3.6 |
11.3 |
15.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE SHEET |
|
|
|
|
|
|
|
|
|
|
|
|
Fixed Assets |
|
|
29.562 |
31.252 |
32.520 |
71.488 |
116.062 |
137.645 |
155.607 |
216.184 |
219.679 |
216.160 |
Intangible Assets |
|
|
10.014 |
10.980 |
10.839 |
10.657 |
10.790 |
10.986 |
10.865 |
10.697 |
10.289 |
9.881 |
Tangible Assets |
|
|
19.548 |
20.272 |
21.681 |
60.831 |
105.272 |
126.659 |
144.416 |
174.097 |
178.145 |
175.280 |
Investments |
|
|
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.326 |
31.390 |
31.246 |
31.000 |
Current Assets |
|
|
24.066 |
22.590 |
61.268 |
63.505 |
36.524 |
69.761 |
72.491 |
38.392 |
49.819 |
78.100 |
Stocks |
|
|
7.894 |
8.345 |
11.796 |
13.125 |
14.008 |
16.932 |
12.262 |
16.159 |
16.113 |
20.519 |
Debtors |
|
|
3.912 |
4.967 |
7.402 |
9.178 |
12.198 |
9.236 |
10.726 |
13.621 |
19.297 |
25.891 |
Cash |
|
|
10.786 |
8.186 |
41.173 |
39.698 |
8.857 |
37.238 |
47.598 |
6.494 |
10.484 |
27.632 |
Current Liabilities |
|
|
(10.701) |
(9.842) |
(14.599) |
(21.414) |
(26.419) |
(23.961) |
(42.285) |
(42.355) |
(49.074) |
(56.897) |
Creditors |
|
|
(10.437) |
(9.488) |
(14.144) |
(18.029) |
(19.997) |
(18.696) |
(32.621) |
(26.086) |
(32.805) |
(40.628) |
Short term borrowings |
|
|
(0.264) |
(0.354) |
(0.455) |
(3.385) |
(6.422) |
(5.265) |
(9.664) |
(16.269) |
(16.269) |
(16.269) |
Long Term Liabilities |
|
|
(1.799) |
(1.947) |
(22.718) |
(40.084) |
(52.508) |
(56.310) |
(49.210) |
(41.165) |
(41.165) |
(41.165) |
Long term borrowings |
|
|
(1.799) |
(1.947) |
(22.718) |
(40.084) |
(52.508) |
(52.048) |
(44.626) |
(36.535) |
(36.535) |
(36.535) |
Other long-term liabilities |
|
|
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
(4.262) |
(4.584) |
(4.630) |
(4.630) |
(4.630) |
Net Assets |
|
|
41.128 |
42.053 |
56.471 |
73.495 |
73.659 |
127.135 |
136.603 |
171.056 |
179.258 |
196.199 |
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOW |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Cash Flow |
|
|
(3.873) |
0.452 |
(1.304) |
(1.756) |
(1.374) |
2.213 |
20.130 |
6.326 |
26.271 |
35.821 |
Net Interest |
|
|
(0.138) |
(0.186) |
(0.248) |
(0.671) |
(1.180) |
(2.250) |
(4.380) |
(3.596) |
(4.546) |
(4.546) |
Tax |
|
|
0.263 |
0.229 |
(0.745) |
(2.013) |
1.674 |
0.165 |
0.071 |
(1.554) |
(4.053) |
(6.445) |
Capex |
|
|
(1.108) |
(4.052) |
(2.608) |
(29.895) |
(48.915) |
(22.901) |
(12.356) |
(43.682) |
(12.682) |
(6.682) |
Acquisitions/disposals |
|
|
0.000 |
0.956 |
18.317 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
Financing |
|
|
0.461 |
0.124 |
0.050 |
26.728 |
6.619 |
52.658 |
8.395 |
3.590 |
0.000 |
0.000 |
Dividends |
|
|
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
Net Cash Flow |
|
|
(4.395) |
(2.477) |
13.462 |
(7.607) |
(43.176) |
29.885 |
11.860 |
(38.916) |
4.990 |
18.148 |
Opening net debt/(cash) |
|
|
(13.050) |
(8.723) |
(5.885) |
(18.000) |
3.771 |
50.073 |
20.075 |
6.692 |
46.310 |
42.320 |
Finance leases |
|
|
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
(1.308) |
(1.000) |
(1.000) |
(1.000) |
Other |
|
|
0.068 |
(0.361) |
(1.347) |
(14.164) |
(3.126) |
0.113 |
2.831 |
0.298 |
(0.000) |
0.000 |
Closing net debt/(cash) |
|
|
(8.723) |
(5.885) |
(18.000) |
3.771 |
50.073 |
20.075 |
6.692 |
46.310 |
42.320 |
25.172 |
IFRS 16 Leases |
|
|
|
|
|
|
|
5.121 |
5.532 |
5.738 |
5.738 |
5.738 |
Source: Company accounts, Edison Investment Research
|
|
Research: Consumer
Veganz has reduced its FY21 guidance for both revenues and EBITDA. Revenues were lower than expected owing to the Omicron variant, which affected consumer spending in Q4, typically a seasonally strong quarter. Supply chain disruption, particularly on the packaging side, was also unhelpful. The EBITDA loss of €9.8m is wider than anticipated, primarily due to a delay in the payment of state subsidies for the new production site. This was caused by the state subsidies being oversubscribed and receipt of payment is now expected in 2022. We note there is enough liquidity to absorb the costs and hence it is only a timing issue. Also, IPO and bond placement costs were higher than the company forecast. On an underlying basis, the EBITDA loss was €5.3m (excluding subsidies and one-offs).
Get access to the very latest content matched to your personal investment style.