Volution Group results strong for first post-IPO report

Caitlin Morrison
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Ronnie George shows David Cameron around Vent-Axia's plant in Crawley, East Sussex
Fan manufacturer Volution Group has reported an 18 per cent increase in revenue during 2014, from £102m to £121m. Of this total, the company’s ventilation segment posted revenue of £101m, up 23 per cent on last year.
The firm also reported a pre-tax loss of £15.5m, compared with a £4.2m loss in 2013. These are the first results Volution has posted since it listed in June 2014, and the company stated that the costs of the IPO had contributed to the increased loss.
Another factor impacting on profit was acquisition and integration costs. Volution purchased Swedish company Pax for £11.5m in August 2013, and InVENTer in Germany for £19.1m in April of this year.
According to the firm, the integration of Pax has been successful and Volution now has “a leading position in the Swedish market for ventilation refurbishment in residential dwellings”, while the integration of InVENTer is “proceeding well”.
Volution also refinanced twice during 2014, and wrote off unamortised costs from refinancing at the end of 2013, all of which cost the firm £8.3m. When pre-tax profit was adjusted to exclude these exceptional costs, it came in at £14m, up on last year’s £9.2m.
Ronnie George, Volution chief executive, said the company’s results showed “strong growth in line with our expectations”, and commented: “Not only did we grow but we grew profitably.”
He added: “Building on this platform, we will continue to strengthen our position as one of the leading players in the European market for ventilation products.”
The company’s share price yesterday rose 0.37 per cent at 137.25p.


The boss of Volution told City A.M. he was delighted to be announcing the firm’s “maiden results as a listed company”, although he said the flotation in June had made “little difference” to the daily operations.
“We continue to run a very tight ship,” Ronnie George stated.
One important change the business has made is to its financing.
“Before the IPO we had a different debt structure, one more typical to private equity,” said George. “Therefore, the refinancing charge was an impact on our results, but we now have the ability to use our cash generation not to pay down debt, but to look at acquisitions.”
This, according to George, is where the listing has made a difference to the company: “We see the European market as very attractive and we want to make more acquisitions.” George said Volution would attempt to take advantage of the current “fragmented” ventilation market, and could begin to make acquisitions every 12 months.
Volution had “got used to the fact that construction markets haven’t been growing”, and George stated that the company was confident it could grow organically “almost in spite of the construction market”. But he also revealed that ventilation and heating control systems for houses “is a space we see growing for us”, and said a range of products targeting new builds would launch in early 2015.
This foray into a slow market may be due in part to the chief executive’s belief that all of the main political parties will focus on “increasing supply” in the residential property sector following next year’s general election.
Volution owns Vent-Axia, the engineering firm which supplied ventilation to 10 Downing Street during the Second World War, but George would not be drawn on his own political leanings.
However, he commented: “It’s almost irrelevant which party is in place. Each and every one of the parties is talking about housebuilding, they understand we need more construction. It’s such a no-brainer.”

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