Shareholders in Volution (FAN) were the beneficiaries of a decent full-year dividend hike, after the ventilation products supplier recorded adjusted operating cash flow of £35.9m, representing a 15 per cent year-on-year increase. Revenue was 16 per cent to the good at current currencies, reflecting encouraging performances from both acquired assets and existing businesses. The integration process constricted underlying margins, although management views this in the context of Volution typically having market-leading operating margins – in other words, acquired businesses generally have to up their game in this regard.
There was organic growth across the group, with the exception of the UK Residential RMI (public repair, maintenance and improvement) business. This suffered a 9.2 per cent organic decline, against the backdrop of decreasing expenditure on public housing improvements. But AirTech – acquired in 2016 – buoyed sales here, resulting in 10 per cent reported growth. The acquisition of Breathing Buildings (December 2016) should bolster its commercial position with particular reference to the education sector. Meanwhile, VoltAir – acquired in May 2017 – complements the group’s Nordic operations.
Analysts at Liberum forecast pre-tax profit of £36.5m and EPS of 14.4p for the year to 31 July 2018 (from £34.6m and 13.6p in 2017).
| VOLUTION GROUP (FAN) | ||||
| ORD PRICE: | 201p | MARKET VALUE: | £400m | |
| TOUCH: | 200-201p | 12-MONTH HIGH: | 204p | LOW: 142p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 80.5p* | NET DEBT: | 23.1% | |
| Year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 102 | -4.2 | -2.3 | nil |
| 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 |
| % change | +20 | -3 | -10 | +9 |
