Building on Accsys's established international presence the current significant investment phase (€80m+ capex) should be the catalyst for accelerated business growth. We expect Accsys Technologies (LON:ACCS) to move into a group EBITDA positive position from FY19 with the significant profit potential to be progressively delivered thereafter. Our DCF analysis suggests that the share price is solidly underpinned at current levels with upside from enhanced commercial development of proprietary technology.
Expansion strategy to drive sustained profitability
FY17 was a watershed year for Accsys that included, at the period end, the announcement of a fully funded expansion strategy and €80m+ capex. New capacity at the existing Accoya® (solid wood) facility is now on stream and standalone Tricoya® (wood elements) production is to be established for the first time by FY20. The business model has demonstrated healthy manufacturing gross margins and Accoya profitability, although in FY18 this was partly obscured by mix effects and other development costs. The prospect of larger commercial scale should bring group profitability more clearly into view.
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