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Accrol Group Holdings

What it does: Accrol produces toilet rolls, kitchen towels, and facial tissue products for major grocery retailers.

By Charlie Carman. Tissue manufacturer Accrol Group Holdings (LSE: ACRL) doesn’t exactly operate in a sexy sector on the face of it. However, a look at the firm’s finances makes this stock more glamorous than it might first appear.

Revenue growth exploded by 64% in the most recent half-year results. In addition, the business now has 21.5% of the market share based on sales volume. That’s a huge increase from the 5.6% share it had in 2017.

The Blackburn-based company has increased volumes across all product categories, but facial tissues (+50.2%) and wet wipes (+120%) have seen particularly impressive growth. Accrol is targeting further expansion opportunities in these areas.

One risk facing the firm is the 41% increase in net debt to £30.5m. However, the business has issued guidance that it’s already trading marginally ahead of expectations for FY23. If it can continue to deliver rapid growth, I think Accrol’s future looks bright.

Charlie Carman has no positions in Accrol Group Holdings.

Begbies Traynor Group 

What it does: Begbies Traynor provides professional services in fields including insolvency, asset sales and funding. 

By Royston Wild. Rising economic optimism has fuelled significant stock market gains in recent weeks. But improved investor confidence has seen many counter-cyclical shares plummet in value. 

Insolvency specialist Begbies Traynor Group (LSE:BEG) is one UK small-cap stock that’s sank since the start of 2023. In fact it’s down a hefty 10%. I believe that this reversal presents an excellent dip-buying opportunity. 

The number of companies in severe financial distress has ballooned and is tipped to keep rising. Last week business advisory firm FRP Advisory predicted that business volumes in the restructuring and administration market will grow this year.  

It said too that enquiries for its restructuring services “continues to rise.” I therefore think that heavy recent selling of Begbies Traynor shares is premature. 

Persistent inflation and increased borrowing costs are playing havoc with company balance sheets. With economists tipping a recession lasting well into 2024 conditions are likely to remain extremely difficult, too. And so businesses like Begbies Traynor could continue to generate robust earnings.

Royston Wild does not own shares in Begbies Traynor or FRP Advisory. 

Begbies Traynor

What it does: Begbies Traynor Group plc is a business recovery, financial advisory and property services consultancy company

By Paul Summers: Shares in insolvency specialist Begbies Traynor (LSE: BEG) have done fairly well over the last 12 months. That’s not really surprising considering the bleak forecasts that have been hitting the headlines.

I think there could be more gains to come. Back in December, the company said that it expected “continued growth” due to “higher levels of enquiries and increasing economic headwinds”.

Sure, the Bank of England now believes a UK recession will now be shorter and less severe than first thought. However, I reckon a lot of small businesses could still be in deep trouble. A Q3 update from Begbies is due before the end of the month.

The stock isn’t expensive either. I can grab a slice for 13 times forecast earnings. There’s a near-3% yield in the offing too.  

Having once been a holder, I’m tempted to buy back in.

Paul Summers does not own shares in Begbies Traynor.

Creo Medical

What it does: Creo Medical is a medical devices company that manufactures electrosurgical products used in endoscopic surgery.

By Ben McPoland. It’s been a stomach-churning 12 months for investors in Creo Medical (LSE: CREO) shares. After sliding 80%, the small-cap stock has shot up 65% in the last month. That’s due to a £28.5m fund raise. It may raise more money shortly via another share placement, which risks volatility in the stock.

However, the loss-making firm expects this cash will see it through to profitability, as adoption of its minimally-invasive surgical technology picks up worldwide. Its leading product is called Speedboat, which is a device attached to an endoscope. These are traditionally only used to diagnose diseases, not treat them. But Creo’s products can dissect, resect, coagulate and inject, all in a single device.

Last year, it signed a multi-year deal with med-tech giant Intuitive Surgical to optimise certain Creo products to be compatible with Intuitive’s robotic technology. This is a huge endorsement of Creo’s technology, and any future licensing revenue should be very high-margin.

At 31p a share, the long-term upside could be significant.

Ben McPoland owns shares in Creo Medical.

DX Group

What it does: DX Group is a delivery company that specialises in IDW (irregular dimensions and weight) packages and parcels.

By John Fieldsend. DX Group (LSE:DX.), with a current market cap of £169m, trades at around 28p. That’s a share price that is down around 78% from all-time highs. And despite the seemingly downward trend, the recent news has all been positive. 

Revenue has been increasing, with year-on-year growth in each of the last seven years taking total revenue from £287.9m in 2016 to £428.2m in 2022. Net earnings have been more of a problem as the company was unprofitable for some time, and this is likely the reason for the stuttering share price. However, the latest earnings showed a profit of £22.1m at an earnings-per-share of 2.9p.

Looking forward, the ongoing desertion of high streets in favour of online shopping is a strong tailwind for the company. A recession and the cost-of-living crisis may pose a problem, but overall, the company looks like a strong small-cap stock to me.

John Fieldsend does not own shares in DX Group.

Keystone Law

What it does: Keystone Law is an innovative UK legal firm that operates a scalable platform model.

By Edward Sheldon, CFA. Keystone Law’s (LSE: KEYS) share price has taken a big hit since the start of last year and I’m not convinced the fall is justified.

This is a company that has grown at an impressive rate in recent years as it has added lawyers to its platform. Between FY2019 and FY2022, revenues climbed more than 60%.

And recently, the small-cap stock advised that it delivered another strong performance for the six-month period ended 31 January, 2023.

Of course, the big risk here is a lengthy UK recession. This could have an impact on the company’s sales and profits as demand for legal services is correlated to economic growth.

After the large share price fall, however, I think the risk/reward proposition here is attractive. Currently, the stock’s price-to-earnings (P/E) ratio is in the low 20s. That seems very reasonable to me, given the company’s track record and long-term growth potential.

Edward Sheldon owns shares in Keystone Law.

Sanderson Design

What it does: Sanderson Design is a UK-based luxury interior furnishings company, specialising in wallpaper, fabrics and paints.

By Harshil Patel. Some of the best small-cap stocks often have turnaround potential. One such share that I’d buy in March is Sanderson Design (LSE:SDG). Just a few years ago, a new CEO arrived and set out a clear strategy to drive sales.

She streamlined the number of products and made the business much more efficient. The next step is to leverage Sanderson’s designs to maximise their value.

In addition to its own manufacturing capabilities, it also offers a licencing model. This part of the business is highly profitable.

The turnaround seems to be making progress. Its high-margin licencing business performed very strongly last year, with sales up by 23% to £6.4m.

It also recently announced a major licencing agreement for its Clarke & Clarke brand with FTSE 100 retailer Next. That sounds encouraging to me.

Sanderson is cash-generative and has a solid balance sheet. With a price-to-earnings ratio of just 9, I’d say it’s too cheap to ignore.

Harshil Patel does not own shares in Sanderson Design.

Superdry

What it does: Superdry is a clothing brand with both retail and wholesale operations, combining vintage Americana styling with Japanese graphic design elements.

By Christopher Ruane. The founder and chief executive of Superdry (LSE: SDRY) has been topping up his stake lately. The shares have risks but look like a bargain to me, and I continue to hold them in my own portfolio.

The risks were highlighted by the company’s move last year to refinance some debt with high-interest loans. That suggests the retailer may have struggled to persuade mainstream lenders about its business prospects. Without the right financing in place, the seasonal cash flows common in the retail sector can kill a company.

But with a price-to-earnings ratio in the mid single digits, I see that risk as already priced in. Superdry has an iconic brand and revenues are growing, albeit modestly. I think the company could continue to grow in 2023 and see its current share price as cheap for such a well-known apparel brand. Apparently the firm’s boss feels the same way, given his recent purchase.

Christopher Ruane owns shares in Superdry.

UPGS Global Sourcing

What it does: UPGS owns and distributes a wide range of consumer products under homeware brands such as Salter and Beldray.

By Roland Head. UPGS Global Sourcing (LSE: UPGS) may not be a familiar name, but the small-cap stock’s products are a common sight in UK homes.

Growth was strong during the pandemic but slowed last year, as retailers cleared overstocking. However, UPGS’s outsourced production model means that the company doesn’t have too much cash tied up in stock.

Management are hoping to emulate the group’s UK success in other European markets, including Germany. Progress so far looks promising to me, but I can also see a risk that the group’s brand-driven UK strategy might not work so well in less familiar markets.

This business has generated attractive returns in the past, and February’s trading update confirmed results for the year to 31 July should be in line with forecasts. That prices the stock on nine time forecast earnings, with a 5% dividend yield.

I see UPGS as a decent buy at this level.

Roland Head does not own shares in UPGS Global Sourcing.

The post Best British small-cap stocks to buy for March appeared first on The Motley Fool UK.

Accrol Holdings

Buying shares in companies that make supermarket own-brand goods could be a good idea today. Toilet and kitchen roll manufacturer Accrol Holdings (LSE:ACRL) is one such business on my investing shortlist.

People are increasingly switching down from more expensive brands as the cost-of-living crisis endures. Kantar Worldpanel notes that “sales of these lines are up by 13.2% this month, well ahead of branded products at 4.6%”. It added that this is “a trend that shows little sign of stopping”.

Accrol’s revenues soared 64% in the six months to October as shoppers tightened their purse strings. And I believe the small-cap share is more than just a good stock to buy in the current climate. Value retail is tipped for further strong long-term growth as consumers become savvier with their cash.

Rising costs pose a danger to the firm’s bottom line. But the prospect of booming volumes still makes this an attractive investment, in my book.

City Pub Group

The pub industry suffered a tough 2022 as Covid-19 turbulence remained and consumers cut back on spending. Revenues at businesses such as City Pub Group (LSE:CPC) could remain under pressure as the cost-of-living crisis endures too.

Yet recent strong trading suggests the business could continue to defy the broader slowdown. Sales at the business — which operates 44 premium pubs in South England and Wales — rose 25% in the first four weeks of 2023, beating expectations.

City Pub has two big weapons in its arsenal. Its estate is largely located across more affluent parts of the country. It is also focused on selling food and drink at the higher end of the market. The kind of customers it attracts are therefore less likely to cut back on nights out during economic downturns.

As an investor, I’m also attracted by it strong balance sheet. This should give it the firepower to execute more growth-boosting acquisitions.

Van Elle Holdings

The UK will have to rev up housebuilding activity in the coming decades. The government has set a target of 300,000 new homes a year to meet the needs of a growing domestic population.

This is why I think Van Elle Holdings (LSE:VANL) could be a great stock for long-term investors like me to own. The business is a ground engineering contractor that carries out piling work and installs foundations at residential sites.

I also like this penny stock because of its expertise in critical infrastructure including roads, rail, utilities and flood prevention. Spending in these areas remain stable during economic upturns and downturns, giving the penny stock excellent earnings visibility.

Van Elle has terrific momentum today and reported record first-half revenue in the period to October. Sure, a failure of its systems is a constant risk that could damage future business wins. But, on balance, I think it could prove an outstanding buy.

The post 3 top penny stocks I’m considering buying in March! appeared first on The Motley Fool UK.

One AIM-listed share that has attracted my attention recently is Accrol Group Holdings (LSE: ACRL). This firm manufactures toilet rolls, kitchen towels, and facial tissue products for major grocery retailers, such as Tesco and Aldi. As I write, the Accrol share price is below 32p.

Granted, it’s hardly the most exciting sector to invest in. But, I think the potential profits on offer make this penny stock a more enticing investment prospect than it might first appear. Here’s why.

Rapid growth

The Lancashire-based company’s most recent financial results for half year 2022/23 show tremendous promise.

Accrol’s revenue grew by 64% to hit £121.1m, which translates into a 19% uplift in its gross profit to £21.7m. In addition, the company’s also making progress in terms of claiming market share. In 2017, the firm occupied 5.6% of the UK tissue market. Today, that figure has ballooned to 21.5%.

In the medium-term, the group has ambitions to build a sustainable paper mill which improves the outlook for the company’s efficiency and routes to market.

What’s more, the business has also signalled the possibility of adding value for shareholders in the form of dividends or share buybacks. The possibility of generating passive income from buying Accrol shares boosts the penny stock’s investment appeal in my view.

Risks

Despite excellent headline figures, there are some causes for concern in Accrol’s latest results. First, an 18% gross margin represents a 6.7% year-on-year fall. This suggests the company has made slow progress in turning higher gross profits into net earnings.

Second, the group’s net debt levels increased by 41% compared to the previous half year. At £30.5m today, the debt burden is a little high for my liking. However, the company did face challenges from supply chain disruption and strikes at UK ports. These risks remain, but there’s a good chance trading conditions could begin to normalise as the year progresses.

Third, the inflationary environment continues to act as a headwind. Rising input costs make for a difficult market environment. If high inflation persists, this would likely limit the company’s growth prospects. Equally, if inflation falls substantially, the outlook for Accrol shares should improve.

Should I buy this penny stock?

If I had some spare cash, I’d invest in Accrol shares today. Overall, I believe the company has promising growth prospects and its success in capturing significant market share over a short period is particularly impressive.

The group expects its gross margins will improve this year as the time lag impact on price increases filters its way through into the firm’s results. If it achieves this goal, the case for investing in the company would become even more compelling in my view.

When the time comes to rebalance my portfolio, Accrol shares will be right at the top of my shopping list of penny stocks to buy.

The post 1 penny stock under 32p that I’d buy today appeared first on The Motley Fool UK.

Here are two income-producing AIM stocks that have caught my attention. I’ll be looking to add them to my own investment portfolio if I have spare cash to invest.

Accrol Group Holdings

Tissue manufacturer Accrol Group Holdings (LSE:ACRL) only carries a 1.2% dividend yield for this financial year. But City analysts are expecting shareholder payouts to grow strongly over the medium term as earnings recover.

Supply chain problems and elevated costs have smacked profits here in recent times. And they could remain an issue for the business going forwards.

But I believe the pace at which sales of its own-label products is growing still makes it a top buy. It announced a “substantial growth in volume, revenue, and profit” between May and October as the cost-of-living crisis drew shoppers away from more expensive toilet tissue brands.

Accrol’s market share leapt two percentage points year on year, to 21.5%. And I don’t believe the business is a flash in the pan. I think profits here could keep marching higher as the value retail market grows.

Analysts at IGD expect discount retail in the UK to grow 23.9% between 2022 and 2027. The steady expansion of low-cost chains like Aldi and Lidl — allied with shoppers increasingly demanding more for their money — provides Accrol with excellent revenues opportunities.

One final thing. At current prices, the company trades on a price-to-earnings growth (PEG) ratio of below 1 for each of the next three fiscal years. Such readings indicate a stock is undervalued.

Vertu Motors

Buying retail shares can be dangerous for investors as Britain’s economy struggles. The outlook is especially daunting for sellers of big-ticket items like cars.

Still, it’s my opinion that this tough landscape is baked into Vertu Motors’ (LSE:VTU) rock-bottom valuation. Today, the business trades on a forward price-to-earnings (P/E) ratio of 7.4 times.

It’s also true that the company’s extensive used-car network could help protect it from broader pressures on consumers’ wallets. Sales of its pre-owned vehicles might rise as people switch down from more expensive new models.

As a long-term investor, I believe purchasing Vertu could be a good way to capitalise on the electric vehicle (EV) boom too. This is because purchasers of these cutting-edge cars are more likely to visit a showroom for advice before buying. Vertu has 188 franchised outlets on its books following the acquisition of Helston Motors in December.

Like Accrol, Vertu is tipped to also grow dividends over the next few years. This pushes a healthy yield of 3% for the current 12-month period steadily higher.

The post 2 cheap, dividend-paying AIM shares I’d buy to hold for 10 years! appeared first on The Motley Fool UK.

I don’t plan to stop seeking low-cost UK shares like these, however. There are plenty of rock-solid penny stocks out there to buy if one knows where to look. Here are three I think could deliver excellent returns for me in the near term and beyond.

Steppe Cement

Price: 36.5p per share
Market cap: £83.2m

Urbanisation rates in emerging markets like Kazakhstan are rising strongly. It’s a phenomenon that building materials supplier Steppe Cement is exploiting to full effect. Sales and profits at this penny stock leapt 13% and 53% respectively in US dollar terms last year.

The Kazakh construction sector is strongly growing thanks to financial incentives and favourable policies at government level. The consequent boost to housing and infrastructure building helped domestic cement demand rise almost a quarter (23%) year-on-year in 2021.

I’d buy Steppe Cement shares to capitalise on this theme. That’s even though political unrest in Kazakhstan creates some uncertainty looking ahead.

European Metals Holdings

Price: 42p per share
Market cap: £84.2m

I’ve been searching for top lithium stocks to buy as electric vehicle (EV) sales balloon. The silvery metal is a critical material in batteries that propel low-carbon cars around. And prices of the material are tipped to explode towards the end of the 2020s as supply shortages emerge.

All of this makes European Metals Holdings (LSE: EMH), which owns the huge Cinovec lithium project located in western Czechia, a stock I’m considering buying. This resource contains an estimated 7.39m tonnes of lithium carbonate equivalent and neighbours some of the world’s largest automakers.

I’m aware that problems in developing Cinovec could have an adverse impact on the company’s share price. But all things considered, I think European Metals has masses of investment potential.

Accrol Group

Price: 25p cents per share
Market cap: £79.7m

Trading at toilet tissue and kitchen roll manufacturer Accrol Group (LSE: ACRL) has been heavy-going over the past year. Soaring energy costs, raw material shortages and logistics problems have combined to toxic effect and prompted the release of multiple profit warnings.

Inflationary pressures remain a danger going forwards, of course. But I’m hoping that the penny stock has finally turned a corner. Most recent financials in mid-May showed the successful recovery of all input cost rises in a possible sign of things to come.

I also believe sales could balloon at Accrol as the cost of living crisis worsens. The business specialises in producing cheaper own-brand products, the sort that become more popular when shopping budgets come under pressure.

But Accrol is more than just a decent stock to own for these tough times. Market share growth has returned at the business more recently. And I’m tipping it to continue improving as the value retail boom of the past decade rolls on and savvy shoppers demand more bang for their buck.

The post 3 top penny stocks to buy today! appeared first on The Motley Fool UK.

Roll with it

Toilet and kitchen roll manufacturer Accrol Holdings (LSE: ACRL) could face a rough ride as rising paper costs hit profits. But it’s my opinion that falling consumer spending power could supercharge demand for its lower-cost private label products and, by extension, profits.

Real wages in the UK are falling at their fastest rate since 2014 because of rocketing inflation, recent data shows. Consumers will have to shop more smartly to make ends meet, which bodes well for Accrol. But the penny stock is not just a great buy for today. The importance of good value to consumers has been rising steadily for more than a decade now.

And Accrol has remained busy on the acquisition front to exploit this opportunity. Recent major acquisitions include Leicester Tissue Company and John Dale.

Penny stock nobility

I’d also consider buying Lords Group (LSE: LORD) following recent share price weakness. Like Accrol, this building materials supplier has also been busy with M&A action to increase its scale. Since the start of 2022 alone, it has spent more than £26.8m to bring builders’ merchant AW Lumb and roofing specialist Advance Roofing Supplies under its wing.

This will give Lords Group better geographic and product coverage and therefore better chances to capitalise on the the booming Repairs, Maintenance and Improvement (RMI) market in the UK. The penny stock has designs on driving revenues to £500m by 2024 (it clocked up sales of £179m in the first six months of 2021, latest financials showed).

Shortages of raw materials are a problem that could push up costs and result in empty shelves at its depots. However, the company’s exciting growth plans still make this an attractive UK share for me right now.

Off to market

In usual times, stocks that have exposure to the housing market are in danger when economic conditions worsen. This is hardly a surprise as a weakening buyer affordability and consumer confidence hits homes demand. So with runaway inflation hurting the domestic economy shares like OnTheMarket (LSE: OTMP) might be considered risky ones to own.

But the reality is that home sales continue to impress despite the worsening economic outlook. A mix of historically-low interest rates and fierce competition among mortgage providers means that borrowing conditions remain extremely favourable. Ongoing government support through Help to Buy also means that market activity remains strong, causing British house prices to continue to rise at breakneck pace.

OnTheMarket allows homebuyers to search for properties through its online platform. And in late 2021, it unveiled a website and brand revamp to help it better take on industry giants like Zoopla and Rightmove. Strong market conditions prompted the penny stock to increase profits expectations in recent months. And I fully expect trading here to remain impressive for the foreseeable future.

The post 3 penny stocks to buy after recent share price falls! appeared first on The Motley Fool UK.

Poised to rebound?

The Accrol Group Holdings (LSE: ACRL) share price has sharply unravelled over the past year. The toilet and kitchen roll manufacturer’s lost 63% of its value in that time as rising input costs have smacked earnings and profit warnings have materialised.

But could now be a good time for long-term investors like me to invest? The problem of soaring input costs could continue well into 2022. However, the pace at which City analysts think earnings might rebound in the near future still makes it an attractive dip-buy, at least to me.

The number crunchers expect full-year earnings to drop 89% in the outgoing financial year (to April 2022). But they’re expecting profits to  rebound almost 500% in the period starting in May as costs normalise and sales to hospitality rebound. This leaves Accrol trading on a rock-bottom forward price-to-earnings growth (PEG) ratio of around 0.1

I like Accrol because its private label products sell much more cheaply than major brands like Andrex and Charmin. Thus it’s well placed to capitalise on the rising importance of value in the minds of modern consumers. The penny stock’s products can be found in most major supermarkets and discount retail chains, giving Accrol a massive opportunity to ride this retail trend.

Another penny stock I’d dip-buy

Foresight Sustainable Forestry Company (LSE: FSF) is a UK share you probably haven’t heard of. It only began trading on the London Stock Exchange in November and didn’t exactly get off to a flyer. It slumped in its first week of trading and, although recovering closer to its IPO price of 100p, it remains at a discount at 91p.

I think this stock could play an important role in Britain’s green economy, even though that disappointing IPO echoed the scepticism that still surrounds timber stocks. Foresight Sustainable Forestry Company raised £130m with its flotation, missing its target by a cool £70m.

It has two important roles to fulfil as the battle against climate change intensifies. It will help plant the trees needed to help the UK meet its net zero targets (the government plans to plant 75,000 acres of trees each year). And the timber it eventually produces will help service a growing market for sustainable building products. The trust reckons demand for timber products worldwide will quadruple between 2012 and 2050.

Investing in newly-created companies like this can be considered risky. After all, there aren’t stacks of trading reports available to help inform my investment decision. However, from what I’ve seen, I think this company has plenty of potential to deliver solid returns. I’ll do some more research here with a view to investing some of my own cash.

The post Buy the dip! 2 penny stocks I’d snap up in March appeared first on The Motley Fool UK.

With this in mind, I’ve been screening for penny stocks that have high earnings growth forecasts. Here are two I’m considering buying in my portfolio.

The first high growth penny stock

Accrol (LSE: ACRL) is the first penny stock I’ve been researching. It’s a manufacturer of soft tissue paper that is used in various products such as toilet roll and kitchen paper. It came up on my stock screen as the earnings per share (EPS) forecast for next year is an impressive 44%.

There’s been a turnaround situation at Accrol since the current CEO joined in 2017. The company reduced headcount and the number of products it offered, and also streamlined its supply chain. The gross margin has been rising since 2019 when it was 14.7%. It reached 27.7% in its fiscal year 2021 (the 12 months to 31 April 2021). This, to me, shows that the turnaround is working. The share price has responded too, and has risen from around 7p in 2018, to a 35p at time of writing.

However, in a trading update for the full fiscal year 2022, Accrol said it’s been impacted by rising costs for its raw materials. The company has also seen additional distribution costs related to a shortage of HGV drivers, and this has reduced its achievable revenue growth for this fiscal year. These are key risks to consider before buying Accrol shares as I don’t see the end of the current global supply chain issues just yet.

I’m not sure there’s a strong economic moat in the business either. This might weaken profits in the future if competitors are able to undercut prices of Accrol’s products. So on balance, I’m going to sit this one out for now.

A stock to buy

The next penny stock is EKF Diagnostics (LSE: EKF), a medical diagnostics company. It manufactures point-of-care testing equipment for common infectious diseases, and products for use in a laboratory. The company has also been manufacturing and distributing Covid test kits during the pandemic.

I came across EKF Diagnostic on my screen as its EPS is forecast to grow by almost 55%. Indeed, in the company’s half-year report, net profit grew by a huge 122%. The outlook statement was even better, because management said the core business is trading well. They said that the full-year results will be “comfortably ahead of already materially upgraded management expectations”.

This says to me that EPS growth may even be larger than the current forecast of 55%. Therefore, there could be significant upside in the share price from here.

I have to keep in mind that EKF Diagnostics has benefitted from the increased need for testing due to Covid. This revenue stream should decline when the virus is under control. Nevertheless, the board said the business is capable of double-digit profit growth over the next three to four years. This is beyond any Covid-related revenue.

Gross and operating margins have been increasing in recent years, too. This is a sign of pricing power in the business, in my view. I’m strongly considering this penny stock for my portfolio.

The post Are any of these high growth penny stocks a buy? appeared first on The Motley Fool UK.

Accrol Group has been battered by rising input costs in recent times. And today it noted that “pressures on the group’s raw material supply chains have been considerable with further tightening in recent weeks.” The penny stock said that rising energy costs, material shortages and general inflationary pressures have impacted pulp and parent reel production costs.

Furthermore, it said that a shortage of HGV drivers has pushed costs even higher while also restricting revenue growth.

Accrol warns on profits

Accrol said that while “these cost increases are successfully being passed on… there will be a time lag in passing on the full impact.” As a consequence the business reckons earnings for the full year to April 2022 will be lower than expected.

Revenues are now expected to rise 25% year-on-year, it said. And adjusted EBITDA is predicted to advance around 20%. Passing on of these higher costs, combined with operational efficiencies, will result in EBITDA margins similar to last year’s levels of 11.4%.

In other news Accrol noted that demand for discount goods in the UK hygiene sector “continues to see slow but steady improvement”. It added that its liquidity and cash flow position remains “robust.” Adjusted net debt is tipped to remain in line with market expectations.

The post Accrol Group’s share price crashes on profit warning! appeared first on The Motley Fool UK.

This particular UK share allows e-tailers to provide personal shopping experiences to their customers using AI algorithms. And it’s doing a roaring trade as the virtual marketplace becomes more competitive and companies try to get an edge. Attraqt’s annual recurring revenue bookings ballooned 40% year-on-year in the six months to June.

Analysts at eMarketer think e-commerce market will continue soaring. They think it will account for 21.8% of all global retail sales in 2024, up from a predicted 19.5% this year. The sales opportunities for shares like Attraqt therefore look pretty compelling, at least in my view. Though I’m aware that this software share is loss-making. And any delays to moving into the black, whether through rising costs or disappointing revenues, could have a significant impact on the Attraqt share price.

Medical marvel

The cannabis market is another that’s tipped for big growth, over the next decade at least. Boffins at Fortune Business Insight think the market will be worth $97.4bn in five years. It should grow at a compound annual growth rate of 32.9% between 2018 and 2026. Kanabo Group (LSE: KNB), which makes cannabidiol-based products, could be well placed to exploit this boom.

As well as selling products such as oils, the business is betting big that its medical-grade VapePod vaporiser will make it big profits in the years ahead. The penny stock shipped its first batch of cartridges for the technology into the UK earlier this month. Lawmakers are becoming increasingly receptive to the use of cannabis to treat physical and psychological disorders. But the issue remains controversial and any U-turn by legislators would have a devastating effect on Kanabo’s operations.

A penny stock on a roll

Consumers are demanding more and more bang for their buck. The rise of discount supermarkets Aldi and Lidl over the past decade is the most obvious illustration of the booming demand for value. It’s a theme that is playing into the hands of facial tissue, and toilet and kitchen rolls, manufacturer Accrol Group Holdings (LSE: ACRL).

This stock manufactures private label products that are sold by almost every major British supermarket. And it is grabbing market share at an impressive rate. Accrol grew its share of the market to 15.9% in the last fiscal year (to April 2021) from 12% two years earlier.

I’m tipping Accrol’s sales to continue chugging steadily higher. However, it’s important for me to remember that rising raw material costs could have significant consequences for the company’s bottom line.

The post 3 penny stocks to buy in September appeared first on The Motley Fool UK.