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Volution shrugs off Reading factory problems and weak public sector

Repair and maintenance activity was affected by the Reading disruption
Simx in New Zealand is the largest acquisition to date

Acquisitions helped fan and ducting specialist Volution Group PLC (LON:FAN) grow revenues in spite of delays commissioning a new factory in Reading.

Annual revenue to July rose to £206mln, with the four new companies contributing 8.4% of the 11.3% improvement.

READ: Volution expands Nordics footprint with acquisition of Finnish firm

Housing new build demand in the UK was strong, said Volution, while exports from the UK rose by almost 23%.

Repair and maintenance activity was affected by the Reading disruption, while public sector work declined by 10%.  

Ronnie George, chief executive, said: "The group made good progress with an 11.3% increase in revenue and the completion of four acquisitions.

“We completed our largest acquisition to date, Simx in New Zealand, widening Volution's capability in new, geographically distinct markets with the leading residential ventilation products supplier in the region.

“The two acquisitions in the Nordics, Oy Pamon in Finland and Air Connection in Denmark, will strengthen and enlarge our presence in that region.“

Liberum kept its earnings forecasts and price target of 240p unchanged despite the service and cost overrun problems at Reading, which will be taken as exceptional costs.

The 9% FCF [free cashflow] yield is too high, given the group’s strong record of cash generation and successful reinvestment, said the house broker.

Shares were unchanged at 199.5p.


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