LONDON (ShareCast) - (Sharecast News) - Shares in Volution Group rallied on Thursday, after the engineering firm said full-year earnings were on track to beat forecasts.
The firm, a specialist in energy efficient indoor air quality solutions, said revenues in the six months to 31 January had strengthened nearly 9% to £187.8m.

It said sales had been driven by organic growth of 4% as well as its £144m acquisition of Australia's Fantech, which completed in early December.

Adjusted operating profits rose 10.4% to £42.6m, though pre-tax profits fell 11.3% to £25.7m, primarily due to costs associated with the Fantech deal.

Ronnie George, chief executive, said: "We delivered a strong performance in the first half, with good organic growth supplemented by two months of contribution of Fantech, our largest acquisition to date.

"Although the general economic backdrop remained weak, we continued to benefit from our structural growth drivers: ever tightening building regulations, increasing awareness of the importance of air quality and the need to reduce costs."

George added that the firm had "good momentum" going into the second half, and as a result, now expects full-year earnings to be ahead of consensus.

The market is currently forecasting adjusted earnings per share in the range of 30.3p to 31.3p, with consensus for 30.8p. Interim adjusted basic EPS was 15.3p, up 11.7%.

As at 0930 GMT, shares in Volution had put on 10% at 570.54p.

David Farrell, analyst at Jefferies, said: "Organic revenue growth of 4% is right in the middle of the target range, but there is improving momentum heading in the second half, which is important to note. Cash conversion is yet again strong, and leverage is already down to 1.5x following December's acquisition. We expect a strong share price reaction after drifting from November highs."

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