12th Sep 2022 11:43
(Alliance News) - Accsys Technologies PLC took a hit to its share price on Monday, as it gave a disappointing update on its new plant in Hull.
The London-based wood building products manufacturer reported delays to the Tricoya factory that it is building alongside its consortium partners in Tricoya UK Ltd.
Tricoya is a kind of high-performance modified wood timber.
Since Accsys's last update in June, construction issues at the plant have continued, and it is now "unlikely" commercial operation will occur before the end of 2022. In addition, the total capital cost for the project has been driven higher than project figure of between EUR94 million and EUR103 million.
Shares in Accsys were down 15% to 76.05 pence each in London on Monday.
"TUK is also assessing the potential impact of higher gas prices on the plant's profitability, noting the continuing volatility in European gas markets," Accsys said.
Accsys has reduced the level of activity on site to cut back on costs, but continues to try to progress key construction and commissioning lines.
It is continuing discussions with the consortium over funding for the additional costs and has agreed a further bridging loan of up to EUR8 million. Any loan utilisations require Accsys approval, it noted.
Accsys also noted "stable" revenue for its sustainable Accoya wood in the first five months of the financial year beginning April 1. It recorded EUR39 million in revenue, broadly flat year-on-year, with higher average sales prices offsetting lower volumes.
Customer demand for Accoya continues to be in excess of production capacity, it said. Its fourth reactor expansion at the Accoya plant in Arnhern is progressing well, with defective equipment successfully remediated.
The expansion increases the production capacity of the plant by 33% to 80,000 cubic metres per year.
"Accsys continues to expect to increase the R4 production levels to full capacity within two years...We expect the additional capacity to help address the pent-up demand for Accoya and our strong customer order book," the company said.
By Elizabeth Winter; [email protected]
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