Messy market return as loo roll maker falls 66pc

Loo roll maker Accrol failed to convince shareholders it had cleaned up the mess it made with its profits.

The company, which suspended trading in September after admitting earnings would be significantly below its forecasts, saw its shares plummet upon its re-entry to AIM yesterday.

Accrol makes tissue roll for discounters such as Lidl and Aldi and makes products for most of the major retailers – who put their own branding on the loo roll.

However, the firm fell into difficulty after a shortage of pulp – a material used to make tissue paper–made the cost of producing tissue paper higher than expected. It also claimed it had not been able to hike up prices to cover the costs. While supermarkets are dealing with increased pressure from inflation, many are trying to avoid passing on unnecessary costs to consumers and risk driving shoppers away.

The strategy has hit Accrol and its peers Sofidel and Essity which rely on their products being cheaper than premium brands such as Andrex.

The company was further hit by a fine linked to a health and safety incident shortly before its IPo last June, when an employee sliced off the tip of their finger while operating its machinery. Accrol admitted the fine could be significantly larger than the tens of thousands it had anticipated.

Yesterday chairman Peter Cheung said it had come up with a solution to its short-term funding problems. Part of the ‘solution’ involves raising £18m from shareholders through a share placing – £200,000 of which will be paid by directors. Shareholders were unconvinced, and shares plum- meted 66.3pc, or 87.5p, to 44.5p. The FTSE 100 finished up 0.12pc, or 8.78 points, to 7389.76 while the

FTSE 250 finished up 0.37pc, or 73.46 points, to 19,871.29.

Mobile payments platform Boku soared on its first day of trading. The company makes technology that allows users to pay for digital goods like apps and subscriptions via their mobile bills. It partners with Apple, Google, Microsoft, Facebook, Spotify and some 173 carriers as part of the service.

It raised £45m listing on the LSE’s junior market AIM, £30m of which will be passed back to existing investors. It said the remaining £15m will be reinvested in the company to help its growth.

Shares soared as high as 27pc in its first day of trading, before finishing up 24.6pc, to 73.5p, from its placing price of 59p.

Thomas Cook soared after HSBC upgraded its rating to ‘buy’. Analysts at the bank said the travel operator has managed to recover from the difficulties it encountered during the financial crisis and the terrorist attacks that crippled demand for trips to Greece and Turkey.

Investors will be looking closely for signs the turnaround is still on course when it reveals its final results tomorrow.

It is expected to report sales of £8.5bn, up from £7.8bn last year.

HSBC said Thomas has managed to stay relevant, despite the rise of internet bookings and it expects the next stage of growth in the industry to come from diversification into cruises, hotels and airlines.

The upgrade was enough to send shares up 5.1pc, or 5.7p, to 117p.

Private hospital firm Spire was the FTSE 250’s biggest casualty, after it revealed South African rival Mediclinic had scrapped a bid for the company.

Mediclinic, which already owns a 29.9pc stake in the firm, was considering a deal to buy the rest of the company but Spire rejected the bid that valued its shares at 315.5p each, saying the offer ‘undervalued’ the business and its prospects.

Shares fell 8.4pc, or 22.7p, to 247p as a result.