Full-year revenue, earnings rise for Volution

10th Oct 2024 07:19

(Sharecast News) - Volution Group, a designer and manufacturer of air quality systems, reported full-year revenue of £347.6m in its preliminary results on Thursday, a 6% increase, with adjusted operating profit rising 11.7% year-on-year to £78m.

The FTSE 250 company said its adjusted profit before tax for the 12 months ended 31 July grew 8.7%, reaching £70.7m, while adjusted basic earnings per share rose 8.5% to 28p.

Its statutory figures showed operating profit up 23.2% to £70.4m, and statutory profit before tax increasing 15.9% to £56.6m.

Statutory basic earnings per share grew 13.7% to 21.6p.

The company's dividends totalled 9p per share, a 12.5% rise on the prior year.

Its performance was bolstered by organic growth of 1.5%, alongside inorganic contributions of 6.5%, though foreign exchange impacts reduced growth by 2%.

The adjusted operating profit margin improved by 1.2 percentage points to 22.5%, driven by the UK market and efficiency improvements.

Cash flow remained strong, with a 107% conversion rate, exceeding the 90% target.

Operationally, Volution saw 17.1% growth in UK residential markets, driven by regulatory changes and strong demand in public refurbishment and new build sectors.

New product launches contributed significantly, particularly in Australia and France.

The company also completed the acquisition of DVS in New Zealand, and had agreed to acquire Fantech Group in Australasia for AUD 280m (£143.98m), its largest acquisition to date, expected to close by the end of 2024.

"Volution has delivered another strong set of results and made further good progress against our strategic and financial priorities in the year that we celebrated our 10th year as a listed company," said chief executive officer Ronnie George.

"I am incredibly proud of how, during this time, we have moved from being a largely UK centric ventilation leader to having a broad-based presence across the UK, continental European and Australasian ventilation markets.

"The further enhanced operating profit margin delivered in the year, against continuing challenging markets, is a testament to our scale, diversification, and strong cohesion between the local operating areas, as well as our group-wide technical, procurement and product management functions."

George said the firm continued to be equally focused on converting profitability into cash, adding that he was "delighted" to see another year of "excellent" cash conversion well above its 90% target.

"The new financial year has started as anticipated, with both revenue and adjusted operating profit ahead of the same period last year.

"Also, in an exciting post year-end development, we have announced an agreement to acquire Fantech's ventilation activities in Australia and New Zealand, which would represent our largest acquisition to date by some considerable distance.

"This, along with the momentum we have across many parts of the business, provides the board with confidence of another year of good progress across the group."

At 0835 BST, shares in Volution Group were down 5.5% at 578.37p.

Reporting by Josh White for Sharecast.com.