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Investing.com -- Volution stock gained 3% after the ventilation products supplier projected organic revenue growth exceeding 5% for the second half of its fiscal year 2025, showing improvement over recent challenging market conditions.
The company expects total revenue growth of over 20% for fiscal 2025 on a constant currency basis, including eight months of contribution from its Fantech acquisition completed in December 2024. This projection exceeds current analyst consensus estimates of approximately £412.5 million, which would represent about 19% growth year-over-year.
Adjusted operating margins are anticipated to remain in line with first-half levels of approximately 22.7%, compared to 22% in fiscal 2024. The company noted that organic operating margins are expected to increase, offsetting dilution from the Fantech acquisition, which is projected to reach the group’s target margins of 20% in the medium term.
Volution reported strong UK residential growth, with new build performing well and repair, maintenance, and improvement (RMI) remaining resilient despite weak market conditions. The company attributed this resilience to increased awareness of health risks from mold and condensation in both social and private housing. Key account wins are driving new build systems revenue, with stronger performance expected in the second half compared to the first half.
Continental Europe revenue in the second half is expected to outperform the first half, with the Nordics stabilizing and Central Europe showing strength, particularly from ClimaRad, ERI, and VMI in France.
"Overall these are good numbers against a challenging backdrop," noted RBC analysts.
The company also expects operating cash conversion to exceed its target level of 90%.
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