Volution achieves a strong first half performance, driven by strong UK residential RMI demand

Volution Group

Volution Group plc (LON:FAN), a leading international designer and manufacturer of energy efficient indoor air quality solutions, has announced its unaudited interim financial results for the six months ended 31 January 2023.


 6 months to31 January 20236 months to31 January 2022Movement
Revenue (£m)162.3149.6+8.5%
Adjusted operating profit (£m)34.231.9+7.1%
Adjusted operating margin (%)21.1%21.3%(0.2)pp
Adjusted profit before tax (£m)31.830.0+6.0%
Adjusted basic EPS (pence)12.411.7+6.0%
Reported operating profit (£m)27.823.3+19.6%
Reported profit before tax (£m)22.621.4+5.6%
Reported basic EPS (pence)8.68.2+4.9%
Adjusted operating cash flow (£m)30.616.2+88.1%
Net debt (£m)179.2104.0(24.8)
Interim dividend per share (p)2.502.30+8.7%

1 H1 2023 includes lease liabilities of £23.3 million (H1 2022: £24.8 million).

The Group uses some alternative performance measures to manage and assess the underlying performance of the business. These measures include adjusted operating profit, adjusted profit before tax, adjusted EPS, adjusted operating cash flow and net debt. A definition of all the adjusted and non-GAAP measures is set out in the glossary of terms in note 16 to the condensed consolidated financial statements. A reconciliation to reported measures is set out in note 2 to the condensed consolidated financial statements.


·      Revenue up 8.5%; 7.3% organic growth (6.3% at constant currency (‘cc’)) and 1.2% inorganic growth (1.2% at cc). All three regions grew organically, delivered through both volume and price

·      Adjusted operating margin of 21.1% (H1 2022: 21.3%), above our long-term operating margin target as we successfully mitigated inflationary headwinds

·      Adjusted operating cash flow significantly up on prior year at £30.6 million as inventory levels normalised (H1 2022: £16.2 million), leading to a cash conversion of 88% (H1 2022: 50%)

·      Balance sheet remains strong (leverage ex-leases at 0.8x), providing significant headroom for earnings accretive acquisitions

·      Reported profit before tax up 5.6% to £22.6 million (H1 2022: £21.4 million), with higher operating profits partially offset by increased finance charges as a result of interest rate rises

·      Interim dividend up 8.7% to 2.50 pence per share (H1 2022: 2.30 pence)


·      Excellent levels of customer service underpinned by our group-wide optimisation of component inventory

·      Pricing discipline in all three geographical regions underpinned margin delivery

·      Improved Health & Safety performance, with significant reduction in accident frequency rate, at 0.15 per 100,000 hours worked (H1 2022: 0.25)

·      Good progress on a number of important new product development programs, with several new product launches anticipated during the second half of the year


·      Continued progress against our key sustainability targets:

o  76.4% of plastic used in own manufacturing facilities from recycled sources vs. target of 90% by end FY25 (H1 2022: 58.0%)

o  69.4% of revenue from low-carbon, energy saving products vs. target of 70% by end FY25 (H1 2022: 65.1%)

·      Heat recovery further increased to 32.2% of the total Group revenue

Commenting on the Group’s performance, Ronnie George, Chief Executive Officer, said:

“We delivered a strong first half performance across our three regions, driven in particular by strong UK residential RMI demand.  We have successfully managed inflationary headwinds and supply chain challenges through pricing discipline and inventory optimisation and in doing so maintained our operating margin at 21%. This strong result is testament to the hard work and commitment of our employees.”

“The importance of indoor air quality to our health and the need for energy efficient, low carbon buildings, are moving even further up the global agenda and increasingly supported by government policy and regulation, driving demand for Volution’s innovative ventilation and heat recovery systems.  This was evidenced in the first half by strong refurbishment demand, particularly in the UK, as homeowners and landlords focused on fixing mould and condensation issues, exacerbated by a reduction in heating use in response to the energy crisis.

“Looking ahead, although mindful of the cautious sentiment in some of our segments, residential RMI demand remains supportive, and inflationary pressures and supply chain challenges are easing. 

With our excellent levels of customer service, agile manufacturing, a well-developed M&A pipeline and strong balance sheet position, coupled with significant geographic revenue diversity, we are well placed to make further progress.”

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