19th Mar 2018 12:40
LONDON (Alliance News) - Volution Group PLC on Monday reported "another set of good results" in the first half of its financial year, as revenue and pretax profit both rose.
The ventilation product supplier also announced the acquisition of a New Zealand company and said it has added a Marks & Spencer Group PLC director to its board.
Volution shares were up 1.3% at 201.00 pence per share on Monday.
The company posted pretax profit of GBP10.1 million for the six months to the end of January, up 15% compared with GBP8.8 million for the same period a year earlier, on revenue of GBP98.7 million, up 12% from GBP88.5 million.
Volution said it delivered "the highest level" of organic revenue growth of 5.1% at constant currency, thanks to "good" sales performance in the Nordics, Central Europe and most of the UK, as well as in its OEM division, which refers to original equipment manufacturing or the production of products on behalf of third-party brands.
Nordic sales rose 27% to GBP19.2 million from GBP15.5 million in the prior year, partly as a result of the GBP6.5 million acquisition of Swedish company VoltAir System in May 2017.
Sales in central Europe grew 7.1% to GBP14.3 million from GBP13.3 mllion a year before, supported by a "much" better performance and introduction of new products in Germany.
UK export sales showed "very strong" growth to GBP6.7 million, up 42% from GBP4.7 million, benefiting from "unusually large" export contract to Japan, the company said.
Volution's OEM segment saw revenue rise to GBP11.3 million from GBP10.8 million, as sales in Electrically Commutated technology products increased.
The interim dividend was declared at 1.46 pence, a 8.1% increase on the previous year's 1.35p.
Volution Chief Executive Officer Ronnie George said: "Volution has again delivered a good set of results with organic growth achieved in each of our geographic sectors. As well as the continuing organic growth in the Nordics and Central Europe, our growth in the UK was significantly stronger than the prior year."
Early in 2017, the company said that it intended to move the UK fan assembly and injection moulding from the current two facilities in Reading and Slough to the new building in Suttons Business Park in Reading. The project got underway at the beginning of January 2018. Despite some commissioning delays, the projected is still expected to be completed by July.
"The investment in our new UK injection moulding and fan assembly facility will be completed by the end of the financial year and will underpin our growth ambitions for the future," George added.
Also Monday, Volution said it bought Simx Ltd, an Auckland, New Zealand-based supplier of primarily residential ventilation products, for NZD72.0 million, or about GBP37.8 million, in cash, funded from existing cash and banking facilities.
For the financial year ended June 2017, Simx reported revenue of about GBP19.2 million and pretax profit of around GBP2.4 million.
Volution said it expects the acquisition to be immediately earnings enhancing in the year ending July 31 and will be reported under Volution's Ventilation Group division.
The company also said that Simx's three executive directors and sharesholders, and non-executive director stepped down from their roles on completion of the transaction and have left the business.
Volution appointed Sinx General Manager Ian Borley as managing director and said that Group Product & Marketing Director Lee Nurse will assist with the integration of Simx into Volution.
"We are delighted to have reached agreement to acquire Simx, a trading partner of Volution for over 20 years and one of the first overseas partners that I met when I joined Volution in 2008," said George. "In that time, it has developed into the leading residential ventilation product provider in the New Zealand market. This acquisition is consistent with our stated strategy of making selective value enhancing acquisitions in new markets where a business has a leading market position. We are excited about further developing Simx, in particular, by introducing more energy efficient and aesthetically more attractive products to their portfolio, and we believe the acquisition will deliver an attractive return for our shareholders."
Volution said it expects to make further progress in the full year and the acquisition of Simx will help underpin forward growth.
Volution also said it has appointed Amanda Mellor, a former head of Investor Relations at Marks & Spencer as an independent non-executive director with immediate effect. The group said that Mellor will join its audit, remuneration and nomination committees on appointment.
The company said Mellor currently serves as M&S's group secretary and head of corporate governance.
Related Shares:
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