Volution Group shares surge, as ventilation firm posts strong results on back of new property regulations

Volution Group Shares soared Thursday as the company reported solid full-year sales growth, thanks to increased demand for its building ventilation products.

The manufacturer’s shares rose 11.3 per cent to 374.6p late Thursday afternoon, making it the highest gainer on the FTSE 250 Index.

The Crawley-based company revealed that pre-tax profits grew by 3.4 per cent to £48.8m, while turnover rose 8.3 per cent to £156.1m for the twelve months ended July, mainly due to healthy performance in Great Britain.

Trading was boosted by stronger demand in the home repair, maintenance and improvement market, against a backdrop of growing awareness of the health risks associated with mold and condensation.

Regulations introduced in June 2022 requiring new-build buildings to have a smaller carbon footprint have given a boost to Volution’s energy-efficient ventilation systems.

Just over a year later, the Social Housing Act received royal assent, giving regulators more powers to ensure landlords tackle unsafe conditions in properties.

Under the new law, landlords must resolve reported hazards within a strict time frame or place tenants in alternative premises if the property cannot be made safe.

Volution noted that the law led to a ‘strong increase’ in orders for energy-efficient ventilation products in the second half of the past financial year.

In addition, the company said the importance of good ventilation had become ‘more pressing’ due to the ‘unintended consequence’ of some Britons turning down their thermostats too much in response to rising energy prices..

Because cool air holds more moisture, homes without adequate heating are much more likely to develop mold and condensation.

Outside Britain, Volution saw sales in Central Europe grow 12.7 percent to £75.4 million, supported by the acquisitions of VMI in France, I-Venta and Energy Recovery Industries, a major supplier of aluminum heat exchanger cells.

This offset declining organic sales in the Nordic region, where Volution was impacted by large-scale customer destocking.

The company expects sales to continue to grow despite the current cost of living crisis and rising mortgage rates impacting housing construction rates.

Ronnie George, CEO of Volution, said: “While we are aware of the impact of higher interest rates on consumer confidence and new construction, regulatory changes in our local markets continue to drive demand for our innovative and well-positioned low carbon product. technologies.’