Volution sees FY EPS at top end of market forecasts

Volution said on Thursday that full-year adjusted earnings per share were set to be at the top end of current market forecasts, as it hailed "continued good progress".

Current market forecasts are for EPS of 23.7p to 25.6p.

In an update for the year to the end of July, the company - which makes energy efficient indoor air quality solutions - said a strong UK performance had offset some weaker market areas.

Volution pointed to group organic revenue growth of around 5% on a constant currency basis, despite a "challenging" macro-economic backdrop in which rapidly rising interest rates have dented new build construction levels and consumer confidence.

It said the UK has delivered its highest rate of organic growth, with residential revenue performing particularly strongly. Public refurbishment RMI has benefited from increasing demand arising from the heightened awareness of health risks associated with mould and condensation, while private RMI demand has proved resilient, it said.

Meanwhile, Continental Europe softened in the second half of the year, with Germany in particular hit by a contraction of new build activity and the Nordics impacted by both new build weakness and some earlier, but now completed, destocking in the refurbishment market.

Revenue growth in Australasia has slowed this year after a number of years of very strong growth, the company said.

Chief executive Ronnie George said: "Volution has delivered another year of good progress against a backdrop of difficult end markets, again demonstrating the robustness of our business model and the benefit of the group's diverse geographic and end market positioning.

"Whilst higher interest rates, leading to higher mortgage rates, are dampening new build construction demand, RMI, which accounts for approximately 70% of group revenue, has proved resilient enabling us to deliver group organic growth of circa 5%.

"The group's structural growth drivers remain supportive and, although general end market sentiment is weaker, we continue to see high levels of interest in our wide range of low carbon ventilation solutions, driven by consumer awareness of the importance of indoor air quality, and the regulatory back drop focused on decarbonising buildings."