TIDMFAN
RNS Number : 8607N
Volution Group plc
31 October 2016
Monday 31 October 2016
Volution Group plc
Annual Report and Accounts 2016 and Notice of Annual General
Meeting
Volution Group plc ("Volution" or the "Company", LSE: FAN), a
leading supplier of ventilation products to the residential and
commercial construction markets, announces that following the
release by Volution on 11 October 2016 of the Company's Preliminary
Results Announcement for the year ended 31 July 2016, it has today
posted and made available to shareholders on its website,
http://www.volutiongroupplc.com/ the documents listed below:
-- Annual Report and Accounts 2016
-- Notice of Annual General Meeting 2016
-- Form of Proxy for the Annual General Meeting 2016
Copies of these documents are also being submitted to the
National Storage Mechanism and will shortly be available for
inspection at: http://www.hemscott.com/nsm.do
The Company's Annual General Meeting will be held at 12.00 noon
on Friday 9 December 2016 at the offices of Norton Rose Fulbright
LLP, 3 More London Riverside, London SE1 2AQ.
A condensed set of financial statements and information on
important events that have occurred during the year ended 31 July
2016 and their impact on the financial statements, were included in
the Company's Preliminary Results Announcement made on 11 October
2016, which is available on the Company's website referred to
above. That information together with the information set out below
in the appendices to this announcement (which is extracted from the
Annual Report and Accounts 2016), constitute the material required
by Disclosure & Transparency Rule 6.3.5(2)(b) which is required
to be communicated to the media in full unedited text through a
Regulatory Information Service. This announcement is not a
substitute for reading the full Annual Report and Accounts
2016.
- ends -
Enquiries:
Volution Group plc
Michael Anscombe, Company Secretary +44 (0) 1293 441662
Note to Editors:
Volution Group plc (LSE: FAN) is a leading supplier of
ventilation products to the residential and commercial construction
markets in the UK and northern Europe.
The Group sold approximately 22 million ventilation products and
accessories in the twelve months ended 31 July 2016. The Volution
Group operates through two divisions: the Ventilation Group and the
OEM (Torin-Sifan) division. The Ventilation Group consists of 11
key brands - Vent-Axia, Manrose, Diffusion, National Ventilation,
Airtech, Fresh, PAX, Welair, inVENTer, Brüggemann and Ventilair,
focused primarily on the UK, Nordic and central European
ventilation markets. The Ventilation Group principally supplies
ventilation products for residential and commercial ventilation
applications. The OEM (Torin-Sifan) division, supplies motors, fans
and blowers to OEMs of heating and ventilation products for both
residential and commercial construction applications in Europe.
For more information, please go to:
http://www.volutiongroupplc.com/
Appendices
Appendix A: Directors' Responsibility Statement
The following Directors' Responsibility Statement is extracted
from page 80 of the Annual Report and Accounts 2016 and is repeated
in this announcement solely for the purpose of complying with DTR
6.3.5 (2) (b). The statement relates to the full Annual Report and
Accounts 2016 and not the extracted information contained in this
announcement:
The Directors are responsible for preparing the Annual Report
and the Group and parent company financial statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare Group and parent
company financial statements for each financial year. Under that
law they are required to prepare the Group financial statements in
accordance with IFRS as adopted by the EU and applicable law and
have elected to prepare the parent company financial statements in
accordance with IFRS as adopted by the EU.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and parent company and of
their profit or loss for that period. In preparing each of the
Group and parent company financial statements, the Directors are
required to:
-- select suitable accounting policies and then
apply them consistently;
-- make judgements and estimates that are reasonable
and prudent;
-- state whether the Group and parent company
financial statements have been prepared in
accordance with IFRS as adopted by the EU;
and
-- prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the Group and the parent company
will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent
company's transactions and disclose with reasonable accuracy at any
time the financial position of the parent company and enable them
to ensure that its financial statements comply with the Companies
Act 2006. They have general responsibility for taking such steps as
are reasonably open to them to safeguard the assets of the Group
and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a strategic report, directors' report,
directors' remuneration report and corporate governance statement
that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the UK governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Group and the undertakings included in the consolidation
taken as a whole; and
-- the Strategic Report and the Directors' Report include a fair
review of the development and performance of the business and the
position of the issuer and the undertakings included in the
consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face; and
-- the Annual Report, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Company's performance, business model
and strategy.
By order of the Board
Ronnie George
Chief Executive Officer
11 October 2016
Ian Dew
Chief Financial Officer
11 October 2016
Appendix B: Principal Risks and Uncertainties
The following is extracted from pages 30 to 35 of the Annual
Report and Accounts 2016 and is repeated in this announcement
solely for the purpose of complying with DTR 6.3.5 (2) (b). The
information relates to the full Annual Report and Accounts 2016 and
not the extracted information contained in this announcement:
The Board is committed to protecting and enhancing the Group's
reputation and assets, while safeguarding the interests of
shareholders. It has overall responsibility for the Group's system
of risk management and internal control.
The Group's businesses are affected by a number of risks and
uncertainties. These may be impacted by internal and external
factors, some of which we cannot control. Many of the risks are
similar to those found by comparable companies in terms of scale
and operations.
The risks and uncertainties facing the Group have also been
considered in the context of the result of the UK referendum on EU
membership. Whilst it is too early to judge the impact of the
result on the UK economy we consider that the principal risks
affecting the Group are unchanged. The Board will, however,
continue to closely monitor market conditions and will react
accordingly.
Our approach
Risk management and maintenance of appropriate systems of
control to manage risk are the responsibilities of the Board and
are integral to the ability of the Group to deliver on its
strategic priorities. The Board has developed a framework of risk
management which is used to establish the culture of effective risk
management throughout the business by identifying and monitoring
the material risks, setting risk appetite and determining the
overall risk tolerance of the Group. This framework of risk
management has been enhanced this year and additional processes
have been developed which will assist the Board to monitor and
assess the principal risks throughout the year.
The Group's risk management systems are monitored by the Audit
Committee, under delegation from the Board. The Audit Committee is
responsible for overseeing the effectiveness of the internal
control environment of the Group.
During the financial year ended 31 July 2015, the Board
appointed BDO LLP to act in the capacity of internal auditor and
provide independent assurance that the Group's risk management,
governance and internal control processes are operating
effectively. BDO continued to act in this capacity throughout the
financial year ended 31 July 2016.
Identifying and monitoring material risks
Material risks are identified through a detailed analysis of
individual processes and procedures (bottom-up approach) and a
consideration of the strategy and operating environment of the
Group (top-down approach).
The risk evaluation process begins in the operating businesses
with a biannual exercise undertaken by management to identify and
document the significant strategic, operational, financial and
accounting risks facing the businesses. This process ensures risks
are identified and monitored and management controls are embedded
in the businesses operations.
The risk assessments from each of the operating businesses are
then considered by Group management which evaluates the principal
risks of the Group with reference to the Group's strategy and
operating environment for review by the Board.
Our principal risks and uncertainties
The UK Corporate Governance Code 2014 (the Code) states that the
Board is responsible for determining the nature and extent of the
principal risks it is willing to take in achieving its strategic
objectives and that it should maintain sound risk management and
internal control systems. In accordance with provision C.2.1 of the
Code, the Directors confirm that they have carried out a robust
assessment of the principal risks facing the Group, including those
which would threaten the business model, future performance,
solvency or liquidity.
Set out in this section of the Strategic Report are the
principal risks and uncertainties which could affect the Group and
which have been determined by the Board, based on the robust risk
evaluation process described above, to have the potential to have
the greatest impact on the Group's future viability. These risks
are similar to those reported last year, although with some
movement on the relative ranking of these risks. For each risk
there is a description of the possible impact of the risk to the
Group, should it occur, together with strategic consequences and
the mitigation and control processes in place to manage the risk.
This list is likely to change over time as different risks take on
larger or smaller significance.
Risk Impact Strategic Likelihood Potential Change Mitigation
consequence impact
------------------- ------------------- ------------------- ----------- ---------- --------- -------------------
Economic Demand for Our ability Possible High Stable Geographic
risk. our products to achieve spread from
serving our ambition our international
A decline the residential for continuing acquisition
in general and commercial organic strategy helps
economic RMI and growth to mitigate
activity new-build would the impact
and/or markets be adversely of local
a specific would decline. affected. fluctuations
decline This would in economic
in activity result in activity.
in the a reduction
construction in revenue New product
industry, and profitability. development,
including, the breadth
but not of our product
exclusively, portfolio
an economic and the strength
decline and specialisation
caused of our sales
by the forces should
result allow us to
of the outperform
UK referendum against a
on general decline.
EU membership.
We are heavily
exposed to
the RMI market
which is more
resilient
to the effects
of general
economic decline.
Our business
is not capital
intensive
and our
operational
flexibility
allows us
to react quickly
to the impact
of a decline
in volume.
------------------- ------------------- ------------------- ----------- ---------- --------- -------------------
Acquisitions. Revenue Our strategic Possible Medium Stable The ventilation
and profitability ambition industry in
We may would not to grow Europe is
fail to grow in by acquisition fragmented
identify line with may be with many
suitable management's compromised. opportunities
acquisition ambitions to court
targets and investor acquisition
at an expectations. targets.
acceptable
price Failure Senior management
or we to properly has a clear
may fail integrate understanding
to consummate a business of potential
or properly may distract targets in
integrate senior management the industry
the acquisition. from other and a track
priorities record of
and adversely eight acquisitions
affect revenue over the past
and profitability. four years.
Financial Management
performance is experienced
could be in integrating
impacted new businesses
by failure into the Group.
to integrate
acquisitions
and therefore
not secure
possible
synergies.
------------------- ------------------- ------------------- ----------- ---------- --------- -------------------
Innovation. Scarce development Our organic Possible Low Stable Our product
resource growth innovation
We may may be misdirected ambitions is driven
fail to and costs depend by a deep
innovate incurred in part understanding
commercially unnecessarily. upon our of the ventilation
or technically ability market and
viable Failure to innovate its economic
products to innovate new and and regulatory
to maintain may result improved drivers. The
and develop in an ageing products Group starts
our product product to meet with a clear
leadership portfolio and create marketing
position. which falls market brief before
behind that needs. embarking
of our In the on product
competition. medium development.
term,
failure
to innovate
may result
in a decline
in sales
and profitability.
------------------- ------------------- ------------------- ----------- ---------- --------- -------------------
Foreign The commerciality Our ambition Likely Low Stable Significant
exchange of transactions to grow transactional
risk. denominated internationally risks are
in currencies through hedged by
The exchange other than acquisition using forward
rates the functional exposes currency contracts
between currency us to to fix exchange
currencies of our businesses increasing rates for
that we and/or the levels the ensuing
use may perceived of translational financial
move adversely. performance foreign year.
of foreign exchange Revaluation
subsidiaries risk. of foreign
in our Sterling currency
denominated denominated
consolidated assets and
financial liabilities
statements, is partially
may be adversely hedged by
affected corresponding
by changes foreign currency
in exchange bank debt.
rates.
------------------- ------------------- ------------------- ----------- ---------- --------- -------------------
Supply Sales and Organic Unlikely Medium Reducing We establish
chain profitability growth long term
and raw may be reduced may be relationships
materials. during the reduced. with key suppliers
period of to promote
Raw materials constraint. Our product continuity
or components development of supply
may become Prices for efforts and where
difficult the input may be possible we
to source material redirected have alternative
because may increase to find sources
of material and our alternative identified.
scarcity costs may materials
or disruption increase. and components.
of supply.
------------------- ------------------- ------------------- ----------- ---------- --------- -------------------
IT Systems. Failure We could Possible Medium Stable Disaster recovery
of our IT temporarily and data backup
We may and communication lose sales processes
be adversely systems and market are in place,
affected could affect share operated
by a breakdown any or all and could diligently
in our of our business potentially and tested
IT systems processes damage regularly.
or a failure and have our reputation
to properly significant for customer A significant
implement impact on service. Enterprise
any new our ability Resource Planning
systems. to trade, system upgrade
collect is underway
cash and managed by
make payments. a team of
experienced
senior employees
from the business.
A disaster
failover site
has being
implemented
to cover this
upgrade.
We undertake
cyber security
testing.
------------------- ------------------- ------------------- ----------- ---------- --------- -------------------
Customers. Any deterioration Our organic Unlikely Medium Reducing We have strong
in our growth brands, recognised
A significant relationship ambitions and valued
amount with a significant would by our end
of our customer be adversely users and
revenue could have affected. this gives
is derived an adverse us continued
from a significant traction through
small effect on our distribution
number our revenue channels and
of customers to that with consultants
and from customer. and specifiers.
our relationships
with heating We have a
and ventilation very wide
consultants. range of
We may ventilation
fail to and ancillary
maintain products that
these enhance our
relationships. brand proposition
and make us
a convenient
"one-stop-shop"
supplier.
We continue
to develop
new and existing
products to
support our
product portfolio
and brand
reputation.
We provide
an excellent
level of customer
service.
------------------- ------------------- ------------------- ----------- ---------- --------- -------------------
Legal The shift Our organic Possible Low Stable We participate
and Regulatory towards growth in trade bodies
environment. higher value ambitions that help
added and may be to influence
Changes more energy adversely the regulatory
in laws efficient affected. environment
or regulation products in which we
relating may not We may operate and
to the develop need to as a consequence
carbon as anticipated review we are also
efficiency resulting our acquisition well placed
of buildings in lower criteria to understand
or the sales and to reflect future trends
efficiency profit growth. the dynamics in our industry.
of electrical of a new
products If our products regulatory We are active
may change. are not environment. in new product
compliant development
and we fail We may and have the
to develop have to resource to
new products redirect react to and
in a timely our new anticipate
manner we product necessary
may lose development changes in
revenue activity. the specification
and market of our products.
share to
our competitors.
------------------- ------------------- ------------------- ----------- ---------- --------- -------------------
People. Skilled Our Possible Low Stable Regular employee
and experienced competitiveness appraisals
Our continuing employees and growth allow two
success may decide potential, way feedback
depends to leave both organic on performance
on retaining the Group, and inorganic, and ambition.
key personnel potentially could
and attracting moving to be adversely A Management
skilled a competitor. affected. Development
individuals. Any aspect Programme
of the business was initiated
could be in 2013 (with
impacted the latest
with resultant launched in
reduction 2016) to provide
in prospects, key employees
sales and with the skills
profitability. needed to
grow within
the business
and to enhance
their contribution
to the business.
The Group
aims to reward
and incentivise
employees
competitively.
------------------- ------------------- ------------------- ----------- ---------- --------- -------------------
Appendix C: Related Party Transactions
The following description of related party transactions
involving the Company and its subsidiaries during the financial
year ended 31 July 2016 is extracted from page 128 of the Annual
Report and Accounts 2016 and is repeated in this announcement
solely for the purpose of complying with DTR 6.3.5 (2)(b):
Transactions between Volution Group plc and its subsidiaries,
and transactions between subsidiaries, are eliminated on
consolidation and are not disclosed in this note. A breakdown of
transactions between the Group and its related parties is disclosed
below.
No related party loan note balances exist at 31 July 2016 or 31
July 2015.
There were no material transactions or balances between the
Company and its key management personnel or members of their close
family. At the end of the period, key management personnel did not
owe the Company any amounts. Other disclosures on Directors'
remuneration required by the Companies Act 2006 and those specified
for the audit by the Directors' Remuneration Report Regulations
2013 are included in the Directors' Remuneration Report.
Other transactions with related parties include the
following:
-- The Group incurred costs of GBP295,000 (2015: GBP295,000)
from Peter Hill, Tony Reading, Paul Hollingworth and Adrian Barden
for their services as Non-Executive Directors.
-- Non-Executive Director Paul Hollingworth is also a
non-executive director of Electrocomponents plc. During the year,
the Group sold goods to Electrocomponents plc amounting to
GBP223,000 (2015: GBP253,000). At the year end, amounts owing by
Electrocomponents plc were GBP12,000 (2015: GBP44,000). During the
year the Group purchased goods from Electrocomponents plc amounting
to GBP85,000 (2015: GBP79,000). At the year end, amounts owed to
Electrocomponents plc were GBP16,000 (2015: GBP15,000).
Compensation of key management personnel
2016 2015
GBP000 GBP000
----------------------------- ------ ------
Short-term employee benefits 2,292 2,134
----------------------------- ------ ------
Key management personnel is defined as the CEO, CFO and the nine
individuals that report directly to the CEO.
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACSUARRRNUAROAA
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October 31, 2016 06:05 ET (10:05 GMT)
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