- Sales driven by healthy underlying demand
- Current financial year off to a good start
- Shares gain 15% to top mid-cap risers
Ventilation firm Volution (FAN), the maker of Vent-Axia and other air-conditioning brands, was the top FTSE 250 gainer was a rise of 15% to 353p in early trading after it posted results which comfortably beat market estimates.
The group also sounded an upbeat note on current trading, with the chief executive Ronnie George saying the new financial year had ‘started well’.
GROWING DEMAND
Sales for the year to July grew 12.9% to £308 million driven by a mix of organic growth and acquisitions offset by slight currency headwinds.
Underlying growth was strong across all three of the company’s business regions - the UK, continental Europe and Australasia - with overseas sales now accounting for over 60% of total revenue.
Operating profits rose 13.9% to £64.9 million, equivalent to a margin on sales of 21.1% against 20.9% the previous year, thanks to effective supply chain management and passing on price rises.
The strategic decision taken a year ago to invest in higher than normal levels of inventory of components and finished goods meant the firm was able to maintain its service levels during a difficult period, cementing its position with customers.
WIND AT ITS BACK
While bearing in mind the challenging macroeconomic environment, the firm believes the regulatory, air quality and energy efficiency agenda throughout Europe has ‘never been more supportive’ for its business.
In addition, the energy crisis has focused customers' minds on the importance of heat recovery ventilation, which now accounts for over 30% of group revenue.
The €20 million acquisition of ERI (Energy Recovery Industries) in September 2021 has given the firm a market-leading position in energy-efficient heat exchangers, which are a crucial component in heat recovery devices.
‘The desire to reduce heating bills, a tightening of regulations relating to carbon reduction in buildings, as well as heightened awareness of the importance of air quality to health, continues to drive demand for our innovative solutions’, commented George.
