Volution Group (LSE:FAN), the manufacturer of indoor air quality solutions, said Thursday that adjusted earnings per share for the financial year ending 31 July are expected to reach approximately 38.0p.
That is 4% above current market consensus, which had forecast a range of 35.2p to 37.1p, and represents 15% growth on the prior year.
Total revenue is expected to grow around 15%, boosted by the recent acquisition of AC Industries in Australasia, which gives Volution exposure to gold and copper mining end-markets.
Organic growth is expected at approximately 3% on a constant currency basis, with Continental Europe leading at 5.5% to 6%, driven by a Nordics recovery and strong demand for heat recovery products from ClimaRad and ERI.
Australasia is tracking at 3.0% to 3.5% organic growth, with AC Industries performing well since acquisition.
UK revenue is expected to be broadly flat against a strong prior-year comparator, as resilient social housing refurbishment activity offsets weaker new-build and commercial markets.
All three regions delivered organic operating margin expansion, with the UK particularly strong and ACI boosting group margins in the second half.
Operating cash conversion is expected to exceed the group's 90% target, with leverage at year-end around 1.6 times on an ex-leases basis.
"We are pleased to update the market on another strong year of progress for Volution which extends the Group's track record of delivering strong and consistent compounding earnings growth," said chief executive Ronnie George.
Full-year results will be announced on Thursday 8 October.
News Intelligence what this means for the company
Volution raised full-year EPS guidance to 38.0p, 4% above consensus and 15% above prior year, driven by 15% total revenue growth anchored to the AC Industries acquisition in Australasia plus 3% organic growth. The beat is modest in percentage terms but consistent with management's stated track record of 'strong and consistent compounding earnings growth,' with all three geographic regions expanding operating margins and cash conversion expected to exceed the 90% target.
The guidance raise confirms execution on the AC Industries integration and validates the Australasia expansion into mining end-markets, though organic growth of 3% remains subdued; the UK's flat revenue outcome against a strong prior comparator and weakness in new-build and commercial markets signal headwinds in core markets that the acquisition is helping to offset.
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