Accsys Technologies ends year in strong position

Wood products company Accsys updated the market on its end-of-year guidance and key strategic projects for the 12 months ended 31 March on Wednesday.

The AIM-traded firm said that according to its unaudited figures, it saw 6% growth in sales volumes for its high-performance sustainable wood product Accoya during the year, reaching 63,344 cubic metres.

Accsys also reported growth of 64% over first-half sales volumes, reaching 39,387 cubic metres in the second half, exceeding its targeted 50% increase.

The company said it expected to deliver EBITDA “moderately ahead” of its previous guidance of doubling underlying EBITDA year-on-year, marking a “significant milestone” in its financial performance.

In addition, Accsys said it had reduced its net debt to €44m as at 31 March, representing an €8m decrease compared to the end of December.

The board put that down to growing EBITDA, as well as a focus on working capital management, including a reduction in inventory levels.

Looking at its strategic growth projects the Accsys board said it was continuing to conduct its review of the Tricoya plant in Hull, assessing its economics and capabilities.

“All funding options remain under evaluation, as outlined in previous company announcements, which include discussions with potential third-party partners,” the directors said in their statement.

“The board continues to believe that the market potential of Tricoya is significant, and will consider all relevant commercial factors in deciding whether or not to proceed with the Hull plant and if so, on what basis.

“The maintenance costs at the plant remain within the board's expectations, and are funded by internally-generated cash flow.”

At the Accoya United States joint venture, meanwhile, Accsys said it was still making “good progress” with the construction of the 43,000 square metre Accoya plant in Kingsport, Tennessee with its joint venture partner Eastman.

“However, mechanical completion has experienced some delay and cost inflation and as a result, commercial operations are now expected to commence in mid-2024.

“Progress to date includes the completion of ground works, ongoing steelwork and main warehouse construction, installation of the reactors on site, placement of multiple large sub-contracts and procurement of more than 80% of major equipment.

“Both joint venture partners continue to be fully engaged in delivering this strategically important project.”

Finally, at the Accoya Arnhem plant, Accsys said growth in sales volumes reflected increased capacity from reactors one to three after returning to full production following the completion of reactor four in September, new production from that reactor, and some unwinding of higher inventory levels.

“Fourth quarter production was the highest ever delivered at the plant,” the board confirmed.

Accsys said it would announce its preliminary results for the 2023 financial year on 27 June.

At 1204 BST, shares in Accsys Technologies were up 3.08% at 67p.

Reporting by Josh White for Sharecast.com.