Ventilation products specialist Volution (FAN) has been busy in the first half of the year to the end of January, making three acquisitions and refinancing its bank facilities. The standout feature on the trading side was an 18 per cent jump in revenue from its Nordic operation, at constant currencies, while an accelerated housebuilding programme in the UK lifted the newbuild order intake by more than 10 per cent.
However, the largest sector of the business - UK repair, maintenance and improvement products (RMI), which account for a quarter of group revenue - remained stubbornly in the doldrums, with revenue down by 5 per cent. Most of the decline came on the public sector side as a result of spending cuts, and Volution reckons there's unlikely to be much of a revival here for some time.
Growth in the Nordic region was helped by a Swedish local government initiative in the residential RMI sector, as well as the rollout of a new fan that was subsequently extended into Norway, Denmark and Finland. At the Torin-Stifan business, revenue grew by 8 per cent despite a mild winter, which reduced demand for boiler spares. Further government-led initiatives to reduce carbon emissions from buildings is expected to underpin demand for heat recovery systems, where Volution is the market leader.
Analysts at Numis Securities are forecasting pre-tax profit for the year to July 2016 of £30.4m and EPS of 11.9p (from £27.5m and 11p in FY2015).
| VOLUTION (FAN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 165p | MARKET VALUE: | £330m | |
| TOUCH: | 164.3-165.3p | 12-MONTH HIGH: | 204p | LOW: 138p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 73p* | NET DEBT: | 27% | |
| Half-year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 64.3 | 7.5 | 2.9 | 1.05 |
| 2016 | 70.1 | 8.0 | 3.6 | 1.2 |
| % change | +9 | +7 | +24 | +14 |
Ex-div: 31 Mar Payment: 5 May *Including intangible assets of £169m, or 85p a share | ||||
