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Sunday share tips: Accrol, Pets at Home

Sun 13 December 2020 18:57 | A A A

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(Sharecast News) - The Mail on Sunday's Midas column tipped shares of kitchen and toilet roll maker Accrol to readers, predicting a "considerable" increase in the stock price as its chief rolls out his plans.

Sales had levelled off after jumping by 40% in Spring, but the firm, which supplies the likes of Tesco, Morrisons and Waitrose, remained focused on growth.

Its chief executive officer, Gareth Jenkins, was brought onboard to right the ship in 2017 and had since slimmed the product range, cut costs and reduced headcount.

On the flipside, nobody at Accrol now earns less than the living wage and Jenkins has gone to lengths to make sure that all staff feel valued and can progress within the firm.

And during the previous month, Accrol made its first acquisition under Jenkins snapping up rival loo roll maker LTC.

The key thing to keep in mind here is that loo rolls are an essential - even if unglamorous - item.

Furthermore, Accrol and LTC's combined market share is just 22% and set to grow further.

Eventually, it may also purchase a paper mill.

Accrol's products are also well-known for their quality and the outfit has invested heavily in ensuring that its operations are environmentally sustainable.

Analysts see its profits surging 80% over the year to April, before more than doubling in 2022.

"Accrol operates in an essential and growing market. Jenkins is ambitious and the business has strong potential. At 52p, the shares are a buy."

The Sunday Times's Sabah Meddings made the case for buying shares of Pets at Home, calling attention to the boom in pet ownership during the pandemic.

She also highlighted the designation by government of the firm's services as "essential", which had allowed the company to whether the downturn.

Pets at Home had also invested in online retail and had developed a smaller store format for inside the M25, where its presence remained low.

Company boss, , had also streamlined the business, hiving off the pet hospitals unit for £100m while acquiring a telemedicines company for £15m.

"Pets at Home is no bargain, but it is in a healthy market and has scampered up to the competition online. Buy."

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