Volution climbs after strong Nordics performance
Volution Group increase interim profits and revenue after a strong performance from its Nordics division.
The ventilation products supplier achieved profit before tax of £10.2m for the six-month period ended 31 January, marginally up from the £10.1m recorded over the same period the year before, as revenue jumped by 16% to £114.8m.
The revenue increase was driven by a "good" level of sales in the Nordics, Central Europe and the UK's Residential and Commercial businesses, though this was partially offset by decline from the UK Export business.
Ronnie George, chief executive of Volution, said: "I am pleased to announce these results which are underpinned by strong growth, in line with our strategy, as a result of the four acquisitions completed in FY 2018, and our much improved run-rate of organic growth compared to the second half of FY 2018."
Oy Pamon and Air Connection were acquired in July 2018 and helped to drive sales from the Nordics division, while Simx was acquired in Australasia and AirFan B.V. in Europe.
Post period end, Volution also acquired Ventair, a market leading residential ventilation product supplier in Australia, for an initial cash consideration of AU$19.2m.
Meanwhile, the company also reported that its facility in Reading is now complete, with production levels returning to normal by the end of the period.
On the outlook, Volution said: "Notwithstanding the ongoing uncertainty over the arrangements for the UK to leave the EU, we are now significantly more geographically diverse, and our increasing investment in innovation and new product introductions will provide the support required to make good progress in line with our strategy in the second half of the financial year. The board currently anticipates full year earnings to be in line with expectations."
Analysts at broker Liberum said the revenue growth seen in the UK is "likely to continue into the second half and beyond" as product output improves with the completion of the Reading facility.
"The group’s operational and financial performance in 2018 was impacted by the delayed ramp-up of the new Reading facility, which supplies product to the group’s UK RMI segment. Management has said in today's statement that production improved significantly in the six months to January 2019; that the project is now complete and that production is now at normal levels."
Volution Group's shares were up 5.88% at 173.10p at 1330 GMT.