Volution sees strong growth across its markets

The FTSE 250 company said organic growth was 5.5% at constant exchange rates, delivered through a combination of both volume and price increases, while all three geographic regions grew organically.

It said the UK delivered organic revenue growth of 3.8% at constant currency, with strong growth in residential markets and good growth in its original equipment manufacturer (OEM) revenue stream “more-than-offsetting” weaker revenues in commercial.

In continental Europe, organic revenue growth was 6.4% at constant exchange rates, with the board saying both ClimaRad and ERI performed strongly.

Australasia saw organic constant currency growth of 8.5%, which the directors said was driven by continued market share gains in Australia, and good growth in New Zealand.

“Our excellent levels of customer service, focus on operational excellence, strong brands, attractive product portfolio and pricing power have all underpinned our ability to deliver on the group's operating margin target,” the board said in its statement.

“Given the economic environment it is pleasing that since the year end we have continued to see sales and profits track ahead of the same period last year.

“The group retains a strong balance sheet, with leverage at historically low levels, providing us with opportunity for potential earnings enhancing acquisitions.”

Volution also said it was seeing “strong regulatory initiatives” driven by the need to decarbonise buildings, drive improvements in air quality, and reduce damp and mould in residential homes.

In the UK, the ‘Future Homes Hub’ had been running a task group to help inform a planned formal consultation on the 2025 Future Homes Standard.

Additionally, the company noted a public consultation on the ‘Decent Home Standard for Private Rental Properties’, adding that the Secretary of State for Housing had written to council leaders and social housing providers calling for action on housing conditions, including mould and condensation.

In continental Europe, regulatory improvement from the Energy Performance of Buildings Directive was meanwhile driving sales of energy-efficient continuous ventilation systems, including heat recovery.

Australia saw recent changes to the National Construction Code build on existing provisions to further decrease health risks associated with condensation in new homes, the company added.

“I am immensely proud of the excellent customer service we are maintaining across all of our markets and the considerable focus from our valued colleagues in delivering 'healthy air, sustainably',” said chief executive officer Ronnie George.

“Although the wider macroeconomic backdrop remains uncertain, the regulatory, energy efficiency and indoor air quality drivers have never been stronger.”

George said the company was pleased with the start to its new financial year, and in its ability to achieve margin targets in the face of inflation.

“With our geographic and end-market diversity, our ongoing focus on operational excellence, and our cash generation, we are well positioned to continue to capitalise on the many structural growth opportunities in the months ahead.”

At 1037 GMT, shares in Volution Group were up 1.28% at 355p.

Reporting by Josh White for Sharecast.com.