Successful expansion of its established Accoya facility at Arnhem should pave the way for Accsys Technologies (LON:ACCS) to become EBITDA positive at the group level during FY19. A dedicated Tricoya facility (construction underway, first production expected from mid-2019) provides another clear platform for further profit growth. As this becomes more apparent, we believe it will be a catalyst for positive share price performance.
Laying growth foundations in FY18
Accsys made significant progress in executing its well-flagged expansion strategy in FY18. This included a 50% increase in its Arnhem Accoya capacity (now ramping up) and getting site development for its first Tricoya facility in Hull underway. Arnhem has effectively operated at capacity for the last 12 months and expansion means that broadly based and growing Accoya customer demand internationally can be serviced. It has also processed wood for Tricoya market development; there are now two significant licence partners who will provide the baseload demand for the new dedicated facility when it comes on stream. Headline financials showed an increased trading loss – we note a much reduced EBITDA loss in H2 however – and moved into a modest net debt position (€3.8m) in FY18, as expected. Strategic progress made far outweighs this near-term performance, in our view.
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