What are the significant developments announced by Accsys Technologies towards doubling the production capacity?

Source: Pavel Vaschenkov, Shutterstock

Summary

  • Accsys Technologies PLC had expected revenue to remain more than €98 million during FY21.
  • The construction of the Tricoya®Hull UK Plant is in the final stage of completion.
  • AXS would aim to double up the production capacity by the next year.

Accsys Technologies PLC (LON: AXS) is the LSE listed industrial stock. It is listed on the FTSE AIM All-Share Index.  AXS’s shares have generated a return of approximately 96.16% in the last 12 months.

The Company expects to announce full-year FY21 results ending 31 March 2021 in late June 2021.

Company Overview

Accsys Technologies PLC is a chemical technology Company engaged in the development of transformational technologies based on the acetylation of solid wood and wood elements to use in construction materials. Moreover, it is focused on the sale of the two products – Accoya and Tricoya through its subsidiaries.

 (Source: Company presentation)

Key Industry Trends

According to the recent report from Grand View Research, the Global wood adhesives industry is expected to grow at a CAGR of 4.7% and reach USD 6.34 billion by 2025. Moreover, the industry can be significantly boosted by the rising demand from engineered wood panel manufacturer.

Pre-closing FY21 Trading Update (for the twelve months ended 31 March 2021, as of 16 April 2021)

  • The Accoya® revenue had shown an increase of around 10% to€91 million during FY21, with around 21% revenue growth delivered during H2 FY21.
  • Overall, the Group revenue remained more than €98 million during FY21.
  • Furthermore, the sales volume went up by 4% to approximately 60,466 cubic meters.
  • On the profitability front, the Company had witnessed further progress due to an improved manufacturing margin.
  • The Company had managed to reduce the net debt from €16.3 million as of 30 September 2020 to €12.5 million as of 31 March 2021, driven by strong operating cash flow.

Recent Developments to enhance production capacity 

Tricoya® Hull UK Plant – The Tricoya® wood elements were anticipated to start generating revenue from July 2021 onwards. However, several headwinds such as the Covid-19 pandemic and recent engineering changes had caused a significant delay in the final stage of construction. Thus, the plant would be fully operational by H2 FY22. 

Accoya® Arnhem Plant Fourth Reactor -   The Company had made substantial progress of the existing Accoya® plant at Arnhem, the Netherlands. The project would be operational by Q4 FY22, and it would further enhance the capacity of the plant at Arnhem by 20,000 cubic meters, taking annual production capacity to 80,000 cubic meters.

Accoya® USA Plant: JV progress - The Company has a 60% equity interest in the US joint venture with Eastman at 40%. 

Share Price Performance Analysis of Accsys Technologies PLC

(Source: Refinitiv, Thomson Reuters)

AXS’s shares were trading at GBX 150.00 and were up by close to 4.90% as of 16 April 2021 at 08:24 AM GMT. AXS's 52-week Low and High were GBX 70.00 and GBX 168.00, respectively. Accsys Technologies PLC had a market capitalization of around £241.73 million.

Business Outlook

AXS had witnessed an accelerated recovery during the second half of FY21. Moreover, the trading performance during the first quarter of FY21 was adversely impacted by the Covid-19 pandemic. The Company had delivered strong FY21 illustrating underlying demand for sustainable products and agility of the business. AXS is well-positioned to deliver accelerated financial progress strengthen by a clear ESG strategy. Moreover, the products support the global trend of decarbonization. AXS had also announced various developments towards increasing the production capacity. Overall, the Company intends to increase the production capacity to 200,000 cubic meters per annum by 2025.


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