Volution Group plc (LON:FAN), a leading international designer and manufacturer of energy efficient indoor air quality solutions, has announced an update on trading covering the four months which ended 30 November 2023.
Trading update
Revenue for the four months which ended 30 November 2023 was c. £121 million, up 8.0% versus the prior year. Organic growth at constant currency was 2.9% and inorganic growth was 7.7%. The foreign exchange translation impact was 2.6% adverse.
All three geographic regions grew earnings in the period with the strongest performance coming from our UK residential activities. Both public and private refurbishment in the UK has been supported by greater customer awareness of indoor air quality, and resolution of mould and condensation issues. Across the Group over two-thirds of revenue is derived from the refurbishment market. Despite the significant reduction in new build completions, this market benefits from regulatory drivers moving demand towards higher value energy efficient ventilation solutions.
Similar energy efficiency supportive trends have assisted us in other markets, notably decentralised heat recovery in the Netherlands and the move towards low energy consuming ceiling fans in Australia. Where our exposure is more weighted towards new build activity, notably in Germany and in our OEM activity, we have experienced weaker performance as higher interest and mortgage rates have led to subdued demand.
Gross and operating profit margins have improved compared to FY23 due to strong pricing discipline, an ongoing focus on our operational excellence programme, including material value engineering initiatives, and the introduction of new products.
Volution’s recent acquisitions in France, Slovenia and New Zealand are progressing well.
Full year outlook ahead of expectations
Whilst new build market conditions remain challenging, our refurbishment activities continue to benefit from strong regulatory drivers and consumer focus on eliminating the damaging health impacts of mould and condensation in buildings. Volution’s strong start to the financial year, together with the tailwind from the three acquisitions completed in the calendar year, gives the Board confidence in delivering earnings ahead of the current range of market expectations for the financial year1.
1. The Board believes current market forecasts for the year ending 31 July 2024 to be adjusted earnings per share in the range of 25.3p to 26.3p
