Floated as recently as last June, Volution (FAN) is better known through ventilation brand names such as Vent-Axia. Having negotiated the costs attendant with flotation, the business is now starting to gain traction. Strong cash generation and lower finance costs as a result of a new £90m banking facility prompted the payment of a maiden dividend.
Sales growth was especially evident in the UK residential new-build sector, where revenue rose nearly 17 per cent, and further growth is likely to be generated from a range of product launches. For the ventilation business as a whole, organic growth of 5.3 per cent fell to 2.2 per cent in sterling terms, but jumped to 15 per cent if you include the acquisition of inVENTer in Germany, which contributed sales of £5.3m.
Volution also provides spare parts to original equipment manufacturer Torin-Sifan. Sales here slipped 2.5 per cent on a constant currency basis because the mild winter reduced spare-part sales for non-condensing boilers. As a result, operating profits dipped from £2.2m to £1.5m.
The balance sheet reflects the switch from private-equity to public ownership, with net debt falling from £183m prior to flotation to £31.4m. As a result, finance costs fell from £15m to just £1.3m.
Analysts at Liberum are forecasting full-year pre-tax profits of £27.2m and EPS of 10.7p (from £14m in 2014).
| VOLUTION (FAN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 145.25p | MARKET VALUE: | £291m | |
| TOUCH: | 145-146.5p | 12-MONTH HIGH: | 161p | LOW: 126p |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | na | |
| NET ASSET VALUE: | 69p* | NET DEBT: | 23% | |
| Half-year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 58.2 | -8.1 | -8.2 | nil |
| 2015 | 64.3 | 7.5 | 2.9 | 1.05 |
| % change | +11 | - | - | - |
Ex-div: 2 Apr Payment: 14 May *Includes intangible assets of £157m, or 79p a share | ||||
