TIDMFAN
RNS Number : 2108T
Volution Group plc
21 July 2022
Embargoed until 7:00am
Thursday 21 July 2022
Volution Group plc
Pre-close Trading Update for the Financial Year ending 31 July
2022
Earnings at top end of market expectations with strong sales
growth and 21% margins maintained
Volution Group plc ("Volution" or "the Group" or "the Company",
LSE: FAN), a leading international designer and manufacturer of
energy efficient indoor air quality solutions, today releases a
scheduled Pre-close Trading Update for the financial year ending 31
July 2022.
Highlights
The Group expects to deliver another strong performance in the
financial year, as we continue to benefit from our diverse
geographic and end market sector exposure, our acute focus on
customer service, agile supply chain management and the long-term
underpin from local regulatory drivers in our markets.
-- Full year adjusted Earnings Per Share (EPS) expected to be at
the top end of the range of market expectations(1.)
-- Revenue is expected to grow to approximately GBP308m, c.13%
ahead of the prior year, with organic revenue growth at constant
currency (cc) expected to be over 7%.
-- Group operating margins of c.21% maintained as our strong
trade brands implemented early and decisive pricing
initiatives.
-- Ongoing proactive inventory and supply chain management has
enabled us to continue to provide good levels of customer service
across the Group.
-- Acquisition in September 2021 of Energy Recovery Industries
("ERI"), a leading producer of heat exchangers for heat recovery
ventilation products, completed and performing well.
-- Excellent progress with our "Product, Planet, People"
sustainability initiatives, increasing the proportion of our
revenue from low carbon products and recycled plastics content in
our own production.
-- Cash generation in the second half of the year is expected to
be good following the first half in which we invested in additional
inventory to mitigate supply chain challenges. We expect leverage
(excluding leases) to be c.0.9x adjusted EBITDA at the year
end.
Organic revenue growth in all three geographic regions
UK revenue is expected to grow by over 6% (cc) compared to the
prior year. Our second half, and notably our recent performance in
May and June, has been strong in social housing refurbishment and
new build residential systems, with the latter benefitting from the
recent changes to Part F and L within the UK building regulations
which provide further structural tailwinds for future demand.
Commercial revenue has been relatively slower during the second
half, however the outlook is improved as we have secured a sizeable
c.GBP2m project order for a flagship new London commercial office
with supplies commencing later this calendar year . Ongoing strong
demand for our energy efficient range of EC3 motorised impellers,
where we have invested to increase capacity, has driven good
revenue growth in our OEM business.
We expect revenue in Continental Europe to close the year
approximately 30% ahead of the prior year on a constant currency
basis. Germany is currently delivering excellent revenue growth
with our leading range of decentralised heat recovery products well
supported by local regulations, whilst in Denmark we have delivered
good revenue growth for centralised heat recovery systems for
residential applications. ERI is delivering strong revenue growth
over the prior year, and our previously announced EUR2.6m capital
investment to expand production capacity is well underway and we
expect to complete the project later in the next calendar year.
Australasia is expected to deliver constant currency revenue
growth of approximately 10%. In New Zealand our revenue for the
year is expected to be slightly behind the strong prior year
comparators in which we enjoyed the benefit of both "post Covid"
residential refurbishment demand and the benefit of the
implementation of the Healthy Homes legislation which prescribed
the need for ventilation in private rental properties. In
Australia, we continue to gain market share and grow strongly with
July expected to be significantly ahead of the prior year, all
supported by continued enhancement of the product range and
activity from our winning a key retail account in the prior
year.
Ronnie George, Chief Executive Officer of Volution,
commented:
"Volution expects to deliver another year of strong revenue
growth. Our early action to invest in additional inventory to
support good levels of customer service, our pricing initiatives,
and the agility of our commercial teams in maintaining operating
margins will deliver a strong set of results.
I am particularly proud of progress with our sustainability
initiatives and the Group wide engagement of our colleagues in
spearheading our low carbon revenue growth and significant increase
in the use of recycled materials in our production facilities.
Whilst we are mindful of the wider macroeconomic backdrop,
Volution continues to benefit from a diverse geographic and varied
end market sector exposure, as well as increasing regulatory
drivers for our energy efficient indoor air quality solutions,
which provides us with confidence in making further progress in the
year ahead."
Full year results
The Group expects to announce its preliminary results for the
year ending 31 July 2022 on Thursday, 6 October 2022.
Notes:
1. The Board believes current market forecasts for adjusted
earnings per share to be in the range of 22.9-23.8 pence per
share.
-ends-
For further information:
Volution Group plc
Ronnie George, Chief Executive
Officer +44 (0) 1293 441501
Andy O'Brien, Chief Financial
Officer +44 (0) 1293 441536
+44 (0) 207 353
Tulchan Communications 4200
James Macey White
Martin Pengelley
Volution Group plc Legal Entity Identifier:
213800EPT84EQCDHO768.
Note to Editors:
Volution Group plc (LSE: FAN) is a leading international
designer and manufacturer of energy efficient indoor air quality
solutions. Volution Group comprises 19 key brands across three
regions:
UK: Vent-Axia, Manrose, Diffusion, National Ventilation,
Airtech, Breathing Buildings, Torin-Sifan.
Continental Europe: Fresh, PAX, VoltAir, Kair, Air Connection,
Rtek, inVENTer, Ventilair, ClimaRad, ERI Corporation.
Australasia: Simx, Ventair, Manrose.
For more information, please go to: www.volutiongroupplc.com
Cautionary statement regarding forward-looking statements
This announcement may contain forward-looking statements which
are made in good faith and are based on current expectations or
beliefs, as well as assumptions, about future events. You can
sometimes, but not always, identify these statements by the use of
a date in the future or use of forward-looking terminology,
including the terms "aims", "ambition", "will", "anticipates",
"aspire", "believes", "continue", "could", "estimates", "expects",
"projects", "intends", "plans", "should", "may", "assumes",
"seeks", "should" or "would" and other similar words or, in each
case, their negative or other variations. By their nature,
forward-looking statements are inherently predictive and
speculative and involve risk and uncertainty because they relate to
events and depend on circumstances that will occur in the future
and are not historical facts. By their nature forward-looking
statements involve risk and uncertainties because they related to
events or uncertainties and depend on circumstances that may or may
not occur in the future and/or are beyond the Group's control
and/or rely on assumptions that may or may not transpire to be
correct. You should not place undue reliance on these
forward-looking statements, which are not a guarantee of future
performance and are subject to factors that could cause our actual
results to differ materially from those expressed or implied by
these statements. The statements contained herein speak only as at
the date of this announcement and the Company undertakes no
obligation to update any forward-looking statements contained in
this announcement, whether as a result of new information, future
events or otherwise, except as required by law.
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