Operational difficulties at its new Reading production plant dented half-year profits for the six months to January 2019 at ventilation specialist Volution (FAN). The good news is that these have been resolved and the group remains on course to meet full-year expectations.
At constant currency, adjusted operating profits grew by 12.4 per cent, although margins dipped from 18.5 per cent to 17.6 per cent, reflecting the difficulties at Reading and higher costs. These were partly offset by higher margins on UK residential new-build and repair, maintenance and improvement (RMI) business.
Profits also benefited from four acquisitions made last year, although these saw net debt more than double to £74.4m. A further purchase was made after the half year of Ventair, a residential ventilation supplier in Australia, which means that over half of total group revenue is now generated outside the UK.
Sales in the residential new-build sector grew by 17.5 per cent, underpinned by a broadening product range, while sales in the commercial sector were up 8.2 per cent supported by investment in new capacity. Two acquisitions in the Nordic area boosted sales by 29 per cent, although organic revenue growth was flat.
Analysts at Numis are forecasting adjusted pre-tax profits for the year to July 2019 of £40.6m and EPS of 16.1p, compared with £35.8m and 14.5p in the previous year.
| VOLUTION (FAN) | ||||
| ORD PRICE: | 167.5p | MARKET VALUE: | £332m | |
| TOUCH: | 167.5-171p | 12-MONTH HIGH: | 220p | LOW: 140p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 84p* | NET DEBT: | 44% | |
| Half-year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 99 | 10.1 | 4.2 | 1.46 |
| 2018 | 115 | 10.2 | 4.1 | 1.6 |
| % change | +16 | +1 | -2 | +10 |
| Ex-div: | 28 Mar | |||
| Payment: | 3 May | |||
| *Including intangible assets of £209m, or 105p a share | ||||
