Liberum raises target price on Volution

Analysts at Liberum raised their target price on ventilation products supplier Volution from 377.0p to 520.0p on Thursday, citing ongoing momentum.

Liberum stated Volution had reported "strong trading" through the second half of the year, with revenue for the full year now projected to exceed £270.0m - around 7% better than it had expected.

The bank also said that Volution had kept its margins at around 21% in the second half, which it thinks shows that the group had passed on cost pressures, such as rising input costs and higher inbound freight charges, and had also managed the challenge of materials availability.

"Volution has guided that it expects revenue to exceed £270m for the year to July 2021 and to record EPS of 20.5p. We have upgraded our 2021 estimates accordingly, by 8% at the EPS level. We have carried this upgrade into 2022 and beyond as the base is stronger," said Liberum.

Liberum added that Volution, a corporate client of the bank, expects to close the 2021 financial year with a leverage of 1.0x, which gives it the capacity to continue to pursue acquisitions.