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UK regulator investigates tissue maker Accrol over 2017 statements

UK regulator investigates tissue maker Accrol over 2017 statements
The logo of the new Financial Conduct Authority (FCA) is seen at the agency's headquarters in the Canary Wharf business district of London April 1, 2013. REUTERS/Chris Helgren   -   Copyright  Chris Helgren(Reuters)
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(Reuters) – British tissue products supplier Accrol Group Holdings <ACRL.L> said on Monday that the UK financial watchdog had started an investigation into the company relating to statements it made in 2017.

Accrol said the Financial Conduct Authority (FCA) was looking into some statements the company made to the market between April 1, 2017 and Nov. 20, 2017. It added that it was fully cooperating with the regulator.

In October 2017 the company issued a warning that its earnings for the year ending April 30, 2018 would be significantly below market forecasts, reversing a statement from the previous month that it was trading in line with revenue and profit expectations.

It also said that net debt would be higher at the end of the financial year than at the end of April 2017 and that it would review its annual dividend.

Accrol blamed the change in outlook on higher input costs, operational charges and a fine over a health and safety incident prior to the company’s listing in June 2016.

The company said at the time that its then new Chief Executive Gareth Jenkins, who took office in September 2017, would review Accrol’s operations to boost margins and overall financial performance.

A month later in November 2017, Accrol said it would look to raise 18 million pounds ($23 million) through a share placement, adding that it would break even or make a marginal adjusted core loss in the year to April 30, 2018 and would not propose a final dividend for that year.

The company’s shares lost two-thirds of their value when they resumed trade on Nov. 20, after being suspended since the profit warning in October.

Since then, Accrol’s shares have dropped by another 72 percent.

They were down 2.1 percent in light trading on Monday after news of the FCA investigation.

($1 = 0.7770 pounds)

(Reporting by Sangameswaran S and Arathy Nair in Bengaluru, editing by Louise Heavens and Susan Fenton)

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