Volution (FAN) pushed adjusted operating profits ahead by 4.1 per cent to £37.1m in the year to July 2018, but headline profits were lower after taking into account nearly £5m in reorganisation costs. These related to the creation of a new assembling facility in Reading, which experienced some disruption during the transition away from two old facilities in Slough and Reading. The good news is that the new facility is up and running and should run more efficiently that the previous two factories.
Organic growth of 13.1 per cent in the UK new-build sector helped to offset a more challenging repair, maintenance and improvement market (RMI), where revenue fell 10.6 per cent from the previous year. Operating margins were lower, partly reflecting the four acquisitions of businesses with lower rates of profitability, alongside foreign exchange cost input inflation. However, the increase has been passed on through higher prices, and with cost inflation expected to level off, margins should recover.
Subject to revision, analysts at Peel Hunt are forecasting adjusted pre-tax profits for the year to July 2019 of £40.8m and EPS of 15.9p (from £36.7m and 14.5p in FY2018).
VOLUTION (FAN) | ||||
ORD PRICE: | 190p | MARKET VALUE: | £ 377m | |
TOUCH: | 187-190p | 12-MONTH HIGH: | 224p | LOW: 185p |
DIVIDEND YIELD: | 2.3% | PE RATIO: | 28 | |
NET ASSET VALUE: | 83p* | NET DEBT: | 47% |
Year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2014 | 121 | -15.5 | -14.0 | nil |
2015 | 130 | 15.5 | 5.9 | 3.3 |
2016 | 155 | 18.4 | 7.8 | 3.8 |
2017 | 185 | 17.9 | 7.0 | 4.15 |
2018 | 206 | 16.7 | 6.7 | 4.44 |
% change | +11 | -6 | -4 | +7 |
Ex-div: | 22 Nov | |||
Payment: | 18 Dec | |||
*Includes intangible assets of £217m, or 109p a share |