A Balance Sheet question rather than a trading one

Accsys Technologies, which makes Accoya acetylated wood and Tricoya wood chips at plants in the Netherlands and, through a joint venture with Eastman Chemical, in Tennessee, has not published any regulatory news since its Annual General Meeting results in September. (LSE:AXS) With interim results scheduled for 24 November 2026, this article looks at the group's borrowings: how much it owes, on what terms, and how that position interacts with the softer start to the 2027 financial year.

The shares, listed on AIM and Euronext Amsterdam, closed at 55.0p in the 3 November session, according to the LSE delayed price captured shortly after midnight on 4 November.

Where Debt stood at the year end

The preliminary results for the year to 31 March 2026, published on 16 June, reported net debt of €41.4m, down from €42.6m a year earlier. (LSE:AXS) Cash was €17.4m and gross borrowings €56.0m. The leverage ratio, defined by the company as net debt divided by underlying EBITDA, improved to 1.96 times from 2.52 times, and from 4.35 times two years earlier. Excluding convertible Loan notes, leverage was 0.74 times.

In October 2025 the group refinanced with €55m of facilities provided equally by ABN AMRO and HSBC: a €20m term loan and a €35m revolving Credit facility, committed for three years to October 2028, with a lender-discretion option to extend by a year. (LSE:AXS) The directors concluded there was no material uncertainty over going concern, noting that their reverse stress test focused on covenants because Liquidity headroom was larger.

The convertible notes in detail

The gap between the two leverage figures reflects €21m of unsecured convertible loan notes issued in November 2023 as part of a Capital raise. (LSE:AXS) They carry a fixed 9.5% coupon over a six-year term. Underlying net finance costs rose by €0.8m to €6.4m in the 2026 financial year, mainly because of a higher accounting value for the embedded derivative in those notes.

Holders could choose to take interest accrued up to 23 May 2026 in cash or in shares at €0.8322 each. On 2 July Accsys said two holders, Teslin and De Engh, opted for shares in respect of €2.5m of interest, receiving 3,004,085 new shares, while three others chose cash. Total voting rights rose to 246,674,698. The company said the share election improved its net debt position. On our reading, that trade-off swapped some cash outflow for modest dilution of a little over 1%.

Why current trading matters for leverage

Because leverage is measured against EBITDA, Earnings matter as much as debt. The 21 September trading update reported group Revenue down 6% to €56.9m for the five months to August, with distributor destocking hitting all regions, especially North America. The board guided to full-year adjusted EBITDA of €21m to €23m, against FY26 adjusted EBITDA of €21.2m. Flat earnings would make further deleveraging more reliant on cash generation, Working Capital and capital spending than on profit growth. One FY27 target is a lower Leverage Ratio than the 4.35 times recorded in FY24, and in September the board said it remained on track for its Phase One targets.

Risks and dependencies

The main risks are a slower recovery in demand, higher borrowing costs if interest rates rise further, and inventory build absorbing cash. Covenant terms were not quantified in the material reviewed. The joint venture's US ramp-up and tariffs on imported lumber add further variables. The convertible notes' principal conversion and Redemption terms are set out in the November 2023 announcement, which was not reviewed.

What to look for on 24 November

The interim statement should update net debt, cash and leverage at 30 September, and show whether the stronger September trading flagged by management continued. Any comment on working capital and Capital Expenditure will indicate how much room the group retains to keep reducing debt.