Interim Results 2016
18.03.16
Strong results in line with our expectations. Interim dividend up 14%.
Volution Group plc (“Volution” or “the Group” or “the Company”, LSE: FAN), a leading supplier of ventilation products to the residential and commercial construction market, today announces its unaudited interim financial results for the 6 months ended 31 January 2016.
| Highlights | 6 months to January 2016 | 6 months to January 2015 | Movement | Movement in Constant Currency |
| Revenue (£000) |
70,142 |
64,349 |
9.0% |
13.0% |
| Adjusted EBITDA (£000) |
16,525 |
15,038 |
9.9% |
13.4% |
| Adjusted operating profit (£000) |
15,207 |
13,990 |
8.7% |
12.2% |
| Adjusted profit before tax (£000) |
14,597 |
12,709 |
14.9% |
18.7% |
| Reported profit before tax (£000) |
8,040 |
7,499 |
7.2% |
13.7% |
| Basic and diluted EPS (p) |
3.64 |
2.94 |
23.8% |
32.2% |
| Adjusted basic and diluted EPS (p) |
5.73 |
4.98 |
15.1% |
19.9% |
| Adjusted operating cash flow (£000) |
11,439 |
11,809 |
(3.1%) |
|
| Interim dividend per share (p) |
1.20 |
1.05 |
14.3% |
|
| Net debt (£000) |
38,988 |
31,400 |
|
|
The Group uses some alternative performance measures to track and assess the underlying performance of the business. These measures include adjusted EBITDA, adjusted operating profit, adjusted profit before tax, adjusted basic and diluted EPS and adjusted operating cash flow. For a definition of all adjusted and non-GAAP measures, see the glossary of terms in note 20.
Overview
Financial highlights
- Strong results in line with our expectations.
- Revenue in the 6 months was £70.1 million, a 9.0% increase (13.0% at constant currency).
- Organic revenue declined by 1.1% (2.1% growth at constant currency) and revenue grew by 10.1% as a result of acquisitions (10.9% at constant currency).
- Ventilation Group revenue growth including acquisitions was 14.0% at constant currency.
- UK New Build Residential revenue growth was 7.1% with growth in order intake of more than 10%.
- UK RMI declined by 5.0% with destocking in some major Private RMI customers and a continuing difficult market for Public RMI.
- Revenue growth in the Nordics was an exceptionally strong 18.3% at constant currency.
- OEM (Torin-Sifan) results improved as revenue grew 8.0% at constant currency, despite an un-seasonally mild winter.
- Adjusted profit before tax increased by 14.9% to £14.6 million assisted by lower interest costs as a result of refinancing our bank facilities in February 2015.
- The Group’s reported profit before tax was £8.0 million (H1 2015: profit of £7.5 million).
- Continued strong adjusted operating cash flow.
- Interim dividend of 1.20 pence per share, up 14.3% compared to H1 2015.
Strategic highlights
- We saw an increase in sales of high end products such as quiet, silent and energy efficient fans and the launch of a range of app controlled fans in the Group.
- Three acquisitions completed in the first half year with all integration activity progressing as anticipated.
- Ventilair provides the Group with access to markets in both Belgium and the Netherlands with the sales in the first half of the year growing ahead of the first half of 2015, a period prior to our ownership.
- Welair, a small heat recovery manufacturer in Sweden provides the Nordic business with a wider product portfolio and greater exposure to the New Build markets.
- Energy Technique Plc and subsidiaries (trading as Diffusion) complements the Group’s leading position in the UK residential markets with a strong position in the niche market of fan coils for both commercial and residential heating and cooling of primarily new buildings.
- OEM (Torin-Sifan) revenue growth was assisted by growth in the EC sales category in both the heating and ventilation markets.
Commenting on the Group’s first half performance, Ronnie George, Chief Executive Officer, said:
“We have delivered results in line with our expectations and the level of our cash generation continues to support our ambition to also grow through acquisition. The Nordic revenue growth of 18.3% is the notable highlight of our first half and we are seeing good traction from our new acquisitions in Belgium, the Netherlands and most recently the UK.
New product launches in the first half of the year such as the new applications software controlled fan are good examples of where the Group is able to leverage product development across a number of different geographies. This product will soon be launched in Belgium and the Netherlands, having already been successfully launched in the Nordics and UK.”
Outlook
“We are confident of delivering against our full year expectations because of the breadth of our activities and the continuing successful integration of our acquisitions. Public RMI remains weak but there are early signs of improvement in Private RMI in the UK.”