(Alliance News) - Volution Group PLC on Thursday said it expects annual earnings towards the top end of forecasts, boosted by Europe and changes in UK's building regulations.
The firm expects adjusted earnings per share for the financial year ending July 31 to be at the upper end of a 22.9 to 23.8 pence consensus range. For the 2021 financial year, EPS amounted to 21.0p.
Revenue is tipped to rise 13% to GBP308 million from GBP272.6 million a year ago, the Crawley-based manufacturer of energy-efficient indoor air quality products added.
Organic revenue at constant currency is expected to grow in excess of 7%.
"We expect revenue in continental Europe to close the year approximately 30% ahead of the prior year on a constant currency basis. Germany is currently delivering excellent revenue growth with our leading range of decentralised heat recovery products well supported by local regulations, whilst in Denmark we have delivered good revenue growth for centralised heat recovery systems for residential applications," the firm explained.
UK revenue is expected to grow slower, up 6% at constant currency from GBP135.9 million a year ago. Volution added it saw strong UK performance in social housing refurbishment and new build residential systems in May and June.
"Commercial revenue has been relatively slower during the second half, however the outlook is improved," it said.
June was boosted by "recent changes to Part F and L within the UK building regulations which provide further structural tailwinds for future demand". The changes came into effect on June 15. The Part F change requires evidence that ventilation inside a house did not worsen after renovating it. Change to Part L demands new-build homes to produce 31% fewer carbon emissions in comparison with current standards.
"Australasia is expected to deliver constant currency revenue growth of approximately 10%," the firm added, while cautioning revenue in New Zealand will slightly abate as it saw a particularly strong prior year on a post-Covid residential refurbishment demand.
"Whilst we are mindful of the wider macroeconomic backdrop, Volution continues to benefit from a diverse geographic and varied end market sector exposure, as well as increasing regulatory drivers for our energy efficient indoor air quality solutions, which provides us with confidence in making further progress in the year ahead," said Chief Executive Officer Ronnie George.
Volution shares were 0.9% higher at 374.50 pence each in London on Thursday morning.
By Tom Budszus; tombudszus@alliancenews.com
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Volution Group PLS (FAN)