Accrol, which supplies top supermarkets, has warned in a trading statement ahead of its half-year figures due on January 18, that prices have had to rise due to the ongoing gas price crisis which has seen many smaller energy suppliers go under and bills set to rise sharply for homeowners.
In the statement bosses of the largest independent supplier of private label toilet roll and kitchen towel in the UK, that they had renegotiated pricing with supermarkets and were implementing a strategic review in the light of the economic situation.
Bosses said: "Unavoidable surcharges to parent reel prices, relating to exceptional energy price increases, have very recently been levied on the Company, which will significantly impact margins.
"In the period since the Company's last trading update of 20 October 2021, the Group has experienced further inflationary pressure on input costs including pulp prices, supply chain costs and most significantly energy costs.
"In light of these cost increases, the Group has implemented further cost efficiencies and has engaged with all its customers successfully securing substantial price increases, over and above those secured in mid-2021."
But the Blackburn-based firm, which also has a factory in Leyland, said it had coped with the post-Brexit supply and transport disruption.
Bosses said: "Despite continued supply chain disruption, particularly at ports, around the world and specifically in the UK, the business continues to manage customer supply well, having secured and maintained additional stocks in paper and finished goods.
"The underlying business is in good shape and the board remains confident in the medium-term prospects for the group."
The company said that it expected revenue is now expected to grow revenue in the 2022 financial year by 17 per cent to £160m, compared with £136.6m the previous year.
Its EBITDA is expected to come in around £9m,a drop from £15.6m in 2021, but margin recovery was predicted by bosses during the fiscal year 2023.