Industrial Fan
Volution shares up 10% after full year beat / Image source: Adobe
  • Full year sales and profit ahead of market expectations
  • Confident outlook despite economic headwinds
  • Dividend increased 9.6%

Shares in Volution (FAN) topped the FTSE 250 leaderboard on Thursday, surging 10% to 370p after the ventilation products maker reported full year sales and profits ahead of market expectations.

The shares have gained 23% over the last year but remain around a third below the high achieved in September 2021.

Looking forward, CEO Ronnie George said: ‘Whilst we are mindful of the impact of higher interest rates on consumer confidence and new build construction, the regulatory changes in our local markets continue to drive demand for our innovative and well-positioned low carbon product technologies.’

A RESILIENT YEAR DESPITE HEADWINDS

Revenue for the year to 31 July increased 6.6% to £328 million, which was slightly above consensus forecasts of £326 million. Organic growth contributed 4.6% with the balance coming from two acquisitions made in the year and one completed in the prior year.

Despite inflationary headwinds the company delivered 6.8% growth in pre-tax profit to £65.1 million, around 5% higher than the market expected.

Diploma jumps 12% to record high after Peerless acquisition

Operating margins increased slightly driven by ‘good price discipline, robust cost control and good factory efficiency.’

The business generated strong operating cash, up 50% to £75.7 million leaving the group with net debt to EBITDA (earnings before interest, tax, depreciation, and amortisation) of 0.8 times after spending £30 million on acquisitions.

The proposed dividend for the year increased by 9.6% to 8p per share reflecting ‘strong performance and confidence in year ahead’.

EXPERT VIEW

Berenberg analyst Robert Chantry said: ‘We view this as another really good year of delivery at the company, which continues to demonstrate some of the trends seen in our more European-industrials-focused products businesses, such as diversification, strong margins and consistent delivery.

‘Looking into FY 2024, as with the rest of the European building products space, end construction markets remain subdued.

‘However, we feel the backdrop of regulatory drivers, strong service and broad product availability should help Volution avoid the worst and take market share.’

LEARN MORE ABOUT VOLUTION

Find out how to deal online from £1.50 in a SIPP, ISA or Dealing account. AJ Bell logo

Issue Date: 05 Oct 2023