LONDON (ShareCast) - (Sharecast News) - Volution reported a rise in full-year profit and revenue on Thursday, boosted by its acquisition of Fantech in Australasia.
In the year to the end of July, adjusted operating profit grew 19.7% to £93.4m, while adjusted pre-tax profit was up 18.7% at £83.9m.

Revenue jumped 20.6% from a year earlier to £419.1m, with 5.7% constant currency organic growth and 16.2% inorganic growth from eight months of Fantech contribution.

Volution, which designs and manufactures energy efficient indoor air quality solutions, said it had delivered the revenue growth "against a challenging market backdrop".

"Once again, our broad geographic exposure, leading market positions and structural growth drivers enabled us to outperform the wider market," it said.

The company pointed to sustained outperformance in the UK residential market, a strong turnaround in UK commercial, with more than 20% organic growth in the second half, and a return to organic growth in Australasia, supported by a much-improved fourth-quarter performance in New Zealand.

Volution recommended a final dividend of 7.4p a share, giving a total dividend of 10.8p for the year, up 20% on the previous year.

Chief executive Ronnie George said: "Organic growth at 5.7%cc, driven by volume, was ahead of our target range and we completed our largest acquisition to date - the Fantech Group in Australasia - which provided a significant boost to revenues and earnings.

"The integration of Fantech is progressing well, with our teams already benefiting from greater scale and collaboration across the region.

"Our group operating margin was again over 20% at 22.3%, despite the dilutive effect of Fantech, and we delivered an excellent level of cash conversion in the year."

George said the new year has started well, with continuing organic revenue growth "complemented" by the inorganic revenue benefit from the Fantech acquisition.

At 0920 BST, the shares were up 3.7% at 673.07p.

Berenberg, which rates the shares at 'buy', lifted its price target to 730p from 720p after the results.

"With the key numbers coming in marginally ahead of consensus, we believe that this is yet another really solid and encouraging statement from the business, particularly set against a broadly challenging - albeit slightly improving - global construction market," it said.

"Again, this reinforces that the business is well run, with a product and demand cycle that is rather different to the broader construction sector given the regulatory underpinning. Particularly encouraging is constant currency (cc) organic revenue growth of 5.7%, which has improved from the 4% at H1 and is ahead of the company's 3-5% target. We update our numbers for the release, resulting in a circa 1% increase in EPS across the forecast period. We also move our price target to 730p."

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