Accsys’s fall in revenue leaves it struggling to see wood for the trees

Sustainable timer maker Accsys blamed “recessionary forces” as being behind a fall in revenue and profit in its preliminary full year results.

The Aim-listed firm, which makes high-performance, weather-proof sustainable wood building materials, saw its revenue drop by 16 per cent from €162m (£136.7m) to €136.2m (£114.7m) in the year ended 31 March 2024.

Gross profit also fell, with the Anglo-Dutch wood retailer making €40.9m (£34.51m) in the reporting period, compared with  €55.2m (£46.3) in the previous year; a fall of 26 per cent.

Adjusted earnings before interest, tax, deprecation, and amortisation (EBITDA) dipped by €18.1m (£15.9m) from €22.9m (£19.3m) in the year ended March 2023 to just €4.8m (£4.1m) the following year. This was not helped by the fact that sales volume in its patented accoya timber fell by 11 per cent.

The reporting period was difficult for many in the construction industry, which found itself at the sharp end of recent inflationary pressures due to upward pressure on both material and labour costs.

Jelena Arsic van Os, Executive Chair of Accsys, said: “Fiscal 2024 has been challenging with recessionary forces impacting demand in the construction and building materials market.

“We took decisive steps to counter these challenges and delivered a more resilient fourth quarter, with our full year results coming in ahead of updated market expectations.

“We have streamlined the business, begun to remove complexity, driven operational efficiencies, and invested in sales and marketing. These transformational measures make Accsys a leaner, more agile organisation with a greater focus on profitable and sustainable growth.”

The firm was muted about its short-term outlook, saying that fiscal 2025 would continue to be “transformative”, as its new Kingsport plant in the US becomes fully operational. The market headwinds in the building materials and construction industry are not expected to subside until “the end of the calendar year”, it said.

It committed to delivering 10,000m³  of production volume by the end of FY2027.

Van Os added: “In the coming year we expect to take advantage of having two Accoya production plants. With our increased production flexibility and capacity, we will continue to invest and professionalise our commercial activities, particularly in North America.

“As inflation steadies and the construction market recovers, we are in a strong position to capitalise on demand and drive growth.”