REG - Volution Group plc - Preliminary Results for year ended 31 July 2025
Thu 07:00
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RNS Number : 6401C Volution Group plc 09 October 2025
Thursday 9 October 2025
VOLUTION GROUP PLC
Full year results for the year ended 31 July 2025
Strong revenue and earnings growth; well-set for continued progress
Volution Group plc ("Volution" or "the Group" or "the Company", LSE: FAN), a
leading international designer and manufacturer of energy efficient indoor air
quality solutions, today announces its audited financial results for the 12
months ended 31 July 2025.
2025 2024 Change
Revenue (£m) 419.1 347.6 +20.6%
Adjusted operating profit (£m)(( 1 (#_ftn1) )) 93.4 78.0 +19.7%
Adjusted operating profit margin (%)(1) 22.3% 22.5% -0.2pp
Adjusted profit before tax (£m)(1) 83.9 70.7 +18.7%
Adjusted basic EPS (pence)(1) 33.1 28.0 +18.2%
Adjusted operating cash flow (£m)(1) 104.5 85.8 +21.8%
Statutory operating profit (£m) 67.3 70.4 -4.5%
Statutory profit before tax (£m) 54.5 56.6 -3.7%
Statutory basic EPS (pence) 21.0 21.6 -2.8%
Dividend per share (pence) 10.8 9.0 +20.0%
Return on Invested Capital (ROIC)(1) 25.2% 27.8% -2.6pp
Adjusted operating cash conversion(1) 109% 107% +2.0pp
Highlights
· Total revenue growth of 20.6% (21.9%cc), of which 5.7%cc organic
growth and 16.2% inorganic from eight months of Fantech contribution
· Strong volume-led organic revenue growth of 5.7%cc; highest in UK
at 9.5% driven by residential, supported by regulations and share gain
· Adjusted operating profit margin of 22.3% (2024: 22.5%), with
organic margin expansion of 50bps offset by dilution due to Fantech
· Excellent cash conversion of 109% (2024: 107%) supported by
disciplined working capital management; leverage 1.2x despite acquisition
spend
· Adjusted basic EPS up 18.2% at 33.1 pence (2024: 28.0 pence), with
reported basic EPS at 21.0 pence (2024: 21.6 pence)
· Return on Invested Capital (ROIC) was robust at 25.2%, despite the
dilutive impact of the acquisition of Fantech. (2024: 27.8%)
· Successfully completed our largest acquisition to date Fantech in
Australasia for consideration of AU$281 million; integration progressing well
· Second Group-wide Employee Engagement Survey completed in the year,
employee engagement score 75 (2024: 74)
· Continued improvement in reportable accident frequency, down from
0.20 (2024) to 0.17 (2025) per 100,000 hours worked
· Recycled plastics use in our production rose to 83.9% (2024:
78.1%), with good uptake in the Nordics and continued very high rates in UK
Commenting on the Group's performance, Ronnie George, Chief Executive Officer,
said:
"I would like to thank all of my Volution colleagues, who collectively
delivered an outstanding performance this year. Organic growth at 5.7%cc,
driven by volume, was ahead of our target range and we completed our largest
acquisition to date - the Fantech Group in Australasia - which provided a
significant boost to revenues and earnings. The integration of Fantech is
progressing well, with our teams already benefiting from greater scale and
collaboration across the region.
"Our Group operating margin was again over 20% at 22.3%, despite the dilutive
effect of Fantech, and we delivered an excellent level of cash conversion in
the year.
"Volution's leading market positions and products, the excellent service we
provide to our customers, and our structural growth drivers, are enabling us
to continue to outperform our end markets. Well-ventilated buildings benefit
our health, reduce our energy bills, and lower CO2 emissions, and the
requirement for ventilation is firmly embedded in new-build regulations
"The new year has started well, with continuing organic revenue growth
complemented by the inorganic revenue benefit from the Fantech acquisition.
Notwithstanding the still difficult economic backdrop in many of our end
markets, we remain confident of continuing to deliver compounding growth and
another year of good progress."
-Ends-
For further information:
Enquiries:
Volution Group plc
Ronnie George, Chief Executive Officer +44 (0) 1293 441501
Andy O'Brien, Chief Financial Officer +44 (0) 1293 441536
FTI Consulting +44 (0) 203 727 1340
Richard Mountain
Susanne Yule
A meeting for analysts will be held at 09:30am GMT today, Thursday 9 October
2025, at the offices of ETC.Venues, 8 Fenchurch Place, London EC3M 4PB. Please
contact FTI_Volution@fticonsulting.com to register to attend or for
instructions on how to connect to the meeting via conference facility.
A copy of this announcement and the presentation given to analysts will be
available on our website www.volutiongroupplc.com
(http://www.volutiongroupplc.com) on Thursday 9 October 2025.
Volution Group plc Legal Entity Identifier: 213800EPT84EQCDHO768.
Note to Editors:
Volution Group plc (LSE: FAN) is a leading international designer and
manufacturer of energy efficient indoor air quality solutions. Volution Group
comprises 29 key brands across three regions:
UK: Vent-Axia, Manrose, Diffusion, National Ventilation, Airtech, Breathing
Buildings, Torin.
Continental Europe: Fresh, PAX, VoltAir, Kair, Air Connection, inVENTer,
Ventilair, ClimaRad, ERI Corporation, VMI, I-Vent.
Australasia: Simx, Ventair, Manrose, DVS, Fantech, Ideal Air, NCS Acoustics,
Air Design, Major Air, Systemaire, Burra Steel.
For more information, please go to: www.volutiongroupplc.com
(http://www.volutiongroupplc.com/)
Cautionary statement regarding forward-looking statements
This document may contain forward-looking statements which are made in good
faith and are based on current expectations or beliefs, as well as assumptions
about future events. You can sometimes, but not always, identify these
statements by the use of a date in the future or such words as "will",
"anticipate", "estimate", "expect", "project", "intend", "plan", "should",
"may", "assume" and other similar words. By their nature, forward-looking
statements are inherently predictive and speculative and involve risk and
uncertainty because they relate to events and depend on circumstances that
will occur in the future. You should not place undue reliance on these
forward-looking statements, which are not a guarantee of future performance
and are subject to factors that could cause our actual results to differ
materially from those expressed or implied by these statements. The Company
undertakes no obligation to update any forward-looking statements contained in
this document, whether as a result of new information, future events or
otherwise.
Chair's Statement
I am pleased to report another year of strong performance, demonstrating the
strength and resilience of Volution's business model and strategy. We are
proud of the progress made over that period, which is testament to our strong
corporate culture, differentiated business model, compounding growth strategy
and consistent delivery.
Acquisition of Fantech
The acquisition of the Fantech group of companies in Australasia on 29
November 2024 was our largest transaction to date. This significant
transaction has not only expanded our presence in this important geographic
area, but it has also marked a significant step up in the commercial sector,
advanced our operational capabilities, and further enhances our product range
across the Group. The successful integration work so far has reaffirmed the
effectiveness of the Group's acquisition strategy. I would like to warmly
welcome the Fantech teams into the Volution group.
Performance and results
Group revenue increased to £419.1 million (2024: £347.6 million), and
adjusted operating profit was up 19.7% at £93.4 million (2024: £78.0
million), giving an adjusted operating margin of 22.3% (2024: 22.5%). The
Group's adjusted earnings per share was 33.1 pence, representing an increase
over the prior year of 5.1 pence, up 18.2%. Since our IPO in 2014, the
compound annual growth rate of adjusted basic earnings per share is 12.8%,
demonstrating strong and consistent performance over that period. Reported
profit before tax decreased to £54.5 million (2024: £56.6 million) and
reported basic earnings per share for the year was 21.0 pence (2024: 21.6
pence). Adjusted operating cash flow was £104.5 million (2024: £85.8
million), and £107.4 million, net of cash acquired, was spent on the
acquisition of Fantech during the year.
Net debt (excluding lease liabilities) at the year-end was £126.0 million
(2024: £31.6 million) representing leverage of 1.2 times.
Dividends
Recognising our strong performance in the year and our continued confidence in
the business, the Board has recommended a final dividend of 7.4 pence per
share, giving a total dividend for the financial year of 10.8 pence per share
(2024: 9.0 pence per share), an increase of 20.0% on the previous year. This
is in line with our ambition to progressively grow dividends each year.
The adjusted earnings dividend cover for the year was 3.1x (2024: 3.1x).
Subject to approval by shareholders at the Annual General Meeting on 10
December 2025, the final dividend will be paid on 16 December 2025 to
shareholders on the register at 21 November 2025.
Purpose and strategy
Volution's purpose, to provide 'healthy air, sustainably', is at the heart of
its strategy and it guides the Group's ambition to deliver value for
all stakeholders. The strategy continues to be anchored in three core
strategic pillars: organic growth, value-enhancing acquisitions and
operational excellence, all underpinned by our commitment to sustainability.
Industry regulations which are aimed at improving indoor air quality and
driving the decarbonisation of buildings continue to evolve and serve as a key
driver for our growth.
Environmental, social and governance objectives
The Group remains committed to sustainability, responsible business conduct
and active engagement with our global workforce. The approval of Volution's
near-term targets by the Science Based Targets initiative (SBTi) in March 2025
marked a significant step forward in the work to align operational activity
with global climate aims. I am pleased to report that Volution has reduced its
Scope 1 and 2 carbon intensity by a further 6.25% compared with last year,
which is a result of targeted investments in energy efficiency and the
transition to renewable electricity across principal sites. In addition to
this, several new low-carbon ventilation solutions, contributing to the
decarbonisation of the built environment, have been launched in the year.
Our people and culture
Cultivating a positive and inclusive work culture at Volution remains a firm
focus of the Board. We have continued to monitor key indicators of culture
at the Board level, and Celia Baxter, the designated Non-Executive Director
for employee engagement, has worked closely with our Group HR Director in
respect of employee engagement activities.
We were proud of the results of our most recent Group-wide employee engagement
survey, which indicated an overall engagement score of 75 (FY24: 74),
representing a slight increase on the prior year's outcome. The survey also
took into account the views of our newly acquired workforce at Fantech. We
recognise that listening to the feedback within the survey results and taking
positive actions as a result is fundamental to building on this momentum and
further cultivating a positive and healthy culture. Our employees are the
foundation and driving force behind the successful execution of our strategy,
and their contributions are core to the continued progress of the Group. On
behalf of the Board, I would like to express my sincere appreciation to all
our employees for their hard work and commitment, which is fundamental to our
achievements as a business and the creation of long-term value.
Health and safety
Health and safety has remained a key priority for the Group, aligned with our
zero-harm ambition. In FY25, we have an improved accident frequency rate of
0.17 per 100,000 hours worked (FY24: 0.20), reflecting our ongoing commitment
to continuous improvement in this area.
Board changes
On 5 March 2025, Celia Baxter and Emmanuelle Dubu were appointed as
Non-Executive Directors. Celia has also taken on the role of Chair of the
Remuneration Committee and is the designated Non-Executive Director for
employee engagement. Both Celia and Emmanuelle bring a wealth of expertise and
fresh perspectives to the Board, and their appointments reinforce our
commitment to maintaining a Board with the right balance of skills, experience
and diversity. Claire Tiney retired from the Board on 2 August 2025 following
nine years of outstanding service and much-appreciated contribution. I would
also like to thank Margaret Amos, who stepped down from the Board at the
Annual General Meeting in December 2024.
Governance
We are committed to embedding robust governance principles throughout the
organisation and keeping pace with evolving regulatory expectations.
We strive to maintain a clear and strategic focus, ensuring we deliver
long-term, sustainable value for our shareholders through sound oversight and
responsible management. Open, rigorous and transparent discussions on key
strategic issues, potential risks and emerging opportunities are fundamental
to our Board's decision-making process, always considering the interests of
all stakeholders.
Nigel Lingwood
Chair
8 October 2025
Chief Executive Officer's Review
Overview
We are proud of the significant progress achieved this year, delivering strong
organic revenue growth against a challenging market backdrop and completing
our largest acquisition to date - Fantech in Australasia - which cements our
position as market leader in both Australia and New Zealand. Once again, our
broad geographic exposure, leading market positions and structural growth
drivers enabled us to outperform the wider market.
Organic revenue growth of 5.7% at constant currency (cc) exceeded our target
range of 3-5%. This was further enhanced by substantial inorganic growth
following the successful integration of Fantech, resulting in overall
revenue growth of 21.9% at cc.
Adjusted operating profit increased by £15.4 million, up 19.7% to £93.4
million (2024: £78.0 million). Adjusted operating margins were broadly
maintained at 22.3%, despite the dilutive impact of the Fantech acquisition.
Underlying operating profit margins, excluding the Fantech acquisition,
increased in the year, reflecting our pricing discipline and the breadth of
value engineering and procurement initiatives delivered across the business.
With inflationary pressures moderating relative to recent years, price
increases have been lower, and the organic margin improvement achieved has
come from internal business improvement measures.
Organic revenue growth strengthened through the year, with the second half
delivering 7.4% cc growth. Key drivers included sustained out performance in
the UK residential market, a strong turnaround in UK commercial with over 20%
organic growth in H2 FY25, and a return to organic growth in Australasia,
supported by a much-improved fourth-quarter performance in New Zealand.
Cash generation is an essential enabler of our M&A-led compounding growth
strategy and organic capex investment. An excellent adjusted operating cash
conversion of 109% enabled us to bring net debt leverage levels down to 1.2x
from a peak of 1.6x.
Our ambition is to become one of the leading ventilation providers for
residential and commercial applications across our three core geographies: the
UK, Continental Europe and Australasia. To support this goal, we strengthened
our senior management structure during the year.
Continental Europe - leadership responsibilities have been expanded, with
Andreas Löfstrand, previously our Nordics leader, and Koen Groenewold, based
in the Netherlands, appointed as Regional Managing Directors for Europe.
Australasia - following the successful acquisition of Fantech, Anthony Lamaro,
previously leader of the Fantech business, was promoted to Regional Managing
Director for Australasia.
I am particularly pleased that these three senior regional leadership roles
have been filled through internal promotion, which underlines the depth of
talent within the Group and further strengthens our platform for growth.
The strengthening of our regional leadership, together with our central teams
in technical, procurement and business development, has assisted us in
broadening and maintaining a high-quality pipeline of acquisition
opportunities. The acquisition of Fantech, a long-term strategic target for
the Group, is a strong example of this approach, representing both an
exciting extension of our capabilities and a significant expansion of our
market reach.
Since our listing in 2014, Volution has delivered consistent, compounding
revenue growth of over 10% per annum. This success is only possible through
the commitment and strength of our local management teams and our people.
During the year, we completed our second Group-wide employee engagement
survey, this time including our new colleagues from Fantech. The results were
very encouraging and built positively on the strong outcomes of the 2024
survey. We also ran our fourth Management Development Programme, with
preparations already underway to launch an enhanced programme for senior
leaders in early FY26.
As Chief Executive, I have always been clear that Volution is, above all, a
people business. While our purpose is to provide market leading solutions that
improve indoor air quality, it is the passion and dedication of our people,
and their commitment to delivering the best possible customer service, that
drives our success. Continued investment in employee engagement and
development remains critical to ensuring the strong and consistent execution
of our business model.
Our markets and regulatory drivers
Volution's end market exposure evolved during the year, with the acquisition
of Fantech in Australasia increasing our weighting in the region but also in
commercial ventilation. While the Group remains predominantly focused on
residential applications (c.70% of revenues) - with a stronger weighting
towards refurbishment - the addition of Fantech has broadened our end-market
mix across applications, construction cycles and geographies. Today, revenues
are reasonably equally split across our three core regions.
We have seen tightening regulation play an increasingly significant role in
shaping demand for our products. By design, regulatory measures aimed at
decarbonisation have the greatest impact on new-build applications. In the
UK, the introduction of building regulations Parts F, L and O has driven
increased focus on airtightness, low-carbon ventilation, and over-heating risk
in new homes, significantly supporting demand for more energy efficient,
better-controlled products.
Refurbishment markets remain relatively resilient and less cyclical. With
rising awareness among homeowners, landlords and tenants of the importance of
good indoor air quality, demand in refurbishment has proven stable overall
despite weaker construction activity. As in new build, customers are seeking
more energy efficient and sophisticated solutions, driving higher product
values across most markets.
Awaab's Law, introduced through the Social Housing (Regulation) Act 2023 and
coming into force in October 2025, requires landlords to fix hazards such as
damp and mould within strict legal timeframes. This is a vital step in
protecting residents' health and improving living conditions. With our market
leading solutions, we are well positioned to support landlords in meeting
these obligations while benefiting from stronger, long-term demand.
Volution actively contributes to local market consultations and discussions on
ventilation requirements. Our international experience and product breadth
allow us to play a leading role in shaping these debates and delivering
practical, effective outcomes. Where new demands emerge, our scale, agility
and innovation capabilities enable us to lead the way in developing
solutions. Examples include our leading role in continuous system ventilation
in UK residential new build, and our market leadership in decentralised heat
recovery retrofit solutions in the Netherlands.
Results
The Group delivered revenue of £419.1 million (2024: £347.6 million), an
increase of 20.6% (21.9% at cc), with organic growth of 4.4% (5.7% at cc) and
inorganic growth from the acquisition of Fantech in the year, of 16.2%.
Adjusted operating margins decreased slightly from 22.5% in the prior year to
22.3%, due to the margin-dilutive impact of Fantech with underlying
like-for-like organic margins increasing again in the year. Reported profit
before tax was £54.5 million (2024: £56.6 million), a decrease of 3.7%.
Sustainability
Our Sustainability Committee, comprising senior management and non-executive
oversight, met twice during the year to review progress against published
targets.
We made strong progress against our key Sustainability KPIs in the year.
Recycled plastics content in our own production rose to 83.9% (2024: 78.1%).
To assist adoption further we have increased our investment at our Reading
facility, which continues to lead the Group in sourcing and validating new
materials. In addition, this year greater participation from the Nordics
has positioned us for further improvement in FY26.
Low-carbon products accounted for 71.2% (2024: 74.6%) of Group revenue,
reflecting the regulatory drivers for energy-efficient solutions, albeit
diluted by Fantech. Although the regulatory drivers for energy efficient
ventilation in Australia are currently not as advanced as Europe and the
UK, proposed future changes to the National Construction Code will encourage
the adoption of higher-efficiency, lower-carbon products in the medium term.
In addition, this year we have published our first Environmental Product
Declarations (EPDs) for a range of central heat recovery devices. This
provides a deeper lifecycle analysis for our new build customers looking for
tighter control of embodied carbon.
Following a rigorous evaluation process, we are delighted the SBTi confirmed
that our science-based targets meet the SBTi's Net-Zero Standard Criteria and
Near-Term Target Criteria and Recommendations.
This approval demonstrates our commitment to reducing greenhouse gas (GHG)
emissions in line with the latest climate science. Research published in 2024
revealed that only 14% of FTSE250 companies have this SBTi accreditation,
making us one of a few select companies to have achieved this milestone.
Strategy
Organic growth
Volution has a financial target to consistently deliver organic growth in the
range of at least 3-5%. This year, we achieved Group organic growth of 5.7%
cc, ahead of our target range. The performance varied by region, with strong
out performance in the UK (+9.5% cc) offset by more modest growth in
Continental Europe (+3.1% cc) and Australasia (+0.6% cc).
Value-adding acquisitions
On 29 November 2024, we completed the acquisition of Fantech in Australasia
for an initial consideration of AUD$221 million (£112.7 million) on a
debt-free, cash-free basis, with a further non-contingent payment of AUD$60
million (£29.6 million) due 12 months post-completion. With leverage
(ex-leases) at 1.2x, our balance sheet remains strong and provides significant
headroom to pursue further acquisition opportunities. Return on Invested
Capital (ROIC) was robust at 25.2%, despite the dilutive impact of
acquisitions. The Fantech business was successfully integrated in the second
half of the financial year.
Operational excellence
Maintaining an adjusted operating margin of 20% or above is a key financial
objective for Volution. In FY25, we delivered an adjusted operating margin of
22.3%, compared with 22.5% in the prior year, the 20bps reduction being due
to the impact of Fantech. On a like-for-like basis excluding Fantech, Group
operating margins increased by 50bps to 23.0%, reflecting Group-wide self-help
initiatives across procurement, efficiency and value engineering.
In light of our strong UK organic growth and following the rationalisation of
two OEM facilities into one Swindon site, we have also reviewed our wider
operational footprint. To support future expansion, we have secured new
leasehold manufacturing capacity in Dudley, the West Midlands, from early
FY26. Investments are already underway in new tooling, injection moulding and
extrusion capacity, alongside enhancements we have made and continue to make
to senior leadership, to future-proof our operational platform.
Customer service excellence remains central to our success and our planned
capacity expansion, and operational investments will strengthen resilience and
ensure service levels match our growth ambitions.
In the Nordics we are making additional investments in our metal working
capabilities to support our revenue growth for new build projects. In
Australasia we have identified optimisation opportunities by tooling new
fan blade castings which will improve costs and enhance our capabilities for
commercial ventilation products for both the Australian and New Zealand
markets.
People
People are at the heart of Volution's long-term success. In FY25 we conducted
our second, Group-wide employee engagement survey, incorporating colleagues
from Fantech for the first time. With participation from over 2,250 employees,
results were very positive and reinforced our shared purpose of delivering
'Healthy air, sustainably'.
Safety is our first priority, and this year we are pleased that our reported
accident frequency rate is down 15% on last year. Our ambition however remains
zero-harm, and we continue to work at a local level to reduce the risk of
accidents further.
Integration of the Fantech Group of companies has progressed exceptionally
well. I personally visited Australia and New Zealand five times during the
year, meeting colleagues across both countries. The survey results
highlighted the strong cultural alignment of Fantech with Volution,
confirming the high quality of both the business and its people.
In the UK, we strengthened our commitment to diversity and inclusion,
becoming a strategic partner of the Construction Inclusion Coalition forum
(having formerly been a Coalition Member). Across our Group, our diverse and
international culture is a clear competitive advantage in delivering our
purpose.
We also advanced leadership development through our 'Global Leaders'
communication programme, chaired by Group HR Director, Michelle Dettman.
Meeting twice a year, this forum brings together the senior team and around 90
colleagues for open dialogue, updates and questions. This transparent
approach, alongside everyday engagement in our local businesses, continues to
embed strong leadership and collaboration across the Group.
Alongside our regular engagement initiatives, we continued to develop our
bi-annual employee engagement forum, now attended by our new Non-Executive
Director and Board-employee liaison, Celia Baxter. Celia succeeds Claire
Tiney, who retired from the Board in August 2025 after a distinguished
nine-year tenure. I would like to thank Claire for her open and engaging
approach to employee dialogue, and I am confident that Celia's skills and
style will ensure these forums continue to deliver maximum value.
Strengthening and supporting our senior and wider management teams remains a
top priority. Our new regional structure has embedded well in the second half
of the year, complemented by the strength of our central functions in
technical, procurement, business development, finance and people &
culture.
I firmly believe high-performing teams are built on a culture of
collaboration, transparency and trust. In 2025 we made excellent progress in
enhancing our senior leadership team, and we are committed to building on this
momentum in the years ahead.
Outlook
I would like to thank all of my Volution colleagues, who collectively have
delivered an outstanding performance this year. Organic growth at 5.7%cc was
ahead of our target range, whilst the completion of our largest acquisition to
date with the Fantech Group in Australasia provided a significant boost to
revenues and earnings.
The integration of Fantech is progressing well, with our teams already
benefiting from greater scale and collaboration across the region. Excellent
revenue growth, expanding organic margins, and record operating cash
generation has culminated in a very strong financial result.
The new year has started well, with continuing organic revenue growth
complemented by the inorganic revenue benefit from the Fantech acquisition.
Notwithstanding the still difficult economic backdrop in many of our end
markets, we remain confident of continuing to deliver compounding growth and
another year of good progress.
Ronnie George
Chief Executive Officer
8 October 2025
Business Review - UK
2025 2024 Change %
£m
£m
Residential 115.2 105.0 9.7
Commercial 30.1 28.2 6.9
Export 15.7 12.1 29.4
OEM 15.1 15.5 (2.0)
Total revenue 176.1 160.8 9.5
Adjusted operating profit 45.9 40.2 14.1
Adjusted operating profit margin (%) 26.0% 25.0% 1.0pp
Reported operating profit 44.0 34.6 27.2
The UK delivered strong organic revenue growth over the prior year. UK
revenues increased from £160.8 million to £176.1 million, a 9.5% increase.
The standout performance was residential ventilation activity which accounts
for c.65% of UK revenue. Given our end markets were generally challenging,
with commercial and OEM activity quite weak, overall organic revenue growth
of 9.5% was a good achievement.
Adjusted operating profit increased from £40.2 million to £45.9 million with
a significant increase in the adjusted operating profit margin at 26.0% up
100bps from 25.0% in the prior year. Our gross margins expanded through a
combination of favourable product mix, initiatives to reduce product cost and
increased utilisation of our Reading, Crawley and Dudley factories. Indirect
costs were tightly controlled, although there were higher than usual bonus
payments made to the teams that contributed to the 9.7% revenue growth in the
residential market.
To support our growth, we have continued to invest in our facilities. During
the year we prepared the groundwork for expansion of our Reading site
injection moulding and extrusion capability and leased additional factory
buildings in Dudley, West Midlands, both aimed at future proofing our capacity
headroom. In Reading we invested in larger injection moulding machines and new
'multi-cavity' tools which will both increase our output capacity and reduce
our unit labour costs.
Our focus on operational excellence, material value engineering and cost down
initiatives, enabled us to mitigate labour-related cost headwinds. In spite of
a significant increase in employee national insurance and wage inflationary
impacts, we were able to enhance our margins by 100bps in the year.
Residential
Sales in our residential market sector were £115.2 million (2024: £105.0
million), representing organic revenue growth of 9.7%, and building on last
year's strong organic growth.
With leading brands across our UK business, each with slightly different
attributes and end market application focus, we were able to deliver another
strong year of growth. Regulations were most supportive in the new
construction arena, despite the overall reduction in new build construction
activity in the year.
For refurbishment activities, volume activity was solid, and we continued to
benefit from the move towards low-carbon, more silent and more aesthetic
solutions. Refurbishment activity is seasonal, with mould and condensation
issues most acute in the winter months. This year's milder and generally drier
winter we believe led to lower than anticipated levels of activity.
Our focus in this sector continues to build on servicing our key retail and
trade distribution partners with the most compelling product portfolio
underpinned by excellent customer service. These relationships are cemented by
ensuring we are fully supporting our customers' growth initiatives. With
substantial UK residential ventilation distribution coverage, across three
leading brands, we continue to be well placed to support our customers.
New product solutions were added to our private residential refurbishment
offering, and we are helping drive a move away from intermittent ventilation
to continuous run solutions, a trend we have already witnessed in the social
housing refurbishment and new build residential markets.
Social housing refurbishment demand continues to be robust and is still in a
catch-up phase. The already mentioned milder and drier winter 24/25 is likely
to have resulted in fewer mould and condensation issues than in previous
years. However, significant underlying issues still exist and will need to be
addressed. Our leading continuous ventilation solutions have been proven
successful in helping remedy the issues, and we expect strong demand for
future years.
Social housing landlords are increasingly focusing on fuel poverty and
comfort-related issues in their dwelling stock and are moving towards more
sophisticated ventilation solutions with improved controls or heat recovery.
Many housing associations have targeted an achievement of Energy Performance
Certificate 'C' by 2030, and this will drive demand for heat recovery
products.
The standout performer in residential was the new build sector. Despite house
completion levels being lower than the prior year, we saw a further increase
in demand for low-carbon and continuous ventilation solutions linked
to the changes in Part F, L and O of the building regulations.
We continued to invest in our facilities and capabilities to support future
growth. Increased capacity in our Reading injection moulding and ducting lines
is underway; new tooling to support the new product volume growth is either
installed or due to arrive in H126; and the additional factory space at our
Dudley facility will support the assembly of higher volumes of mechanical
ventilation with heat recovery units.
During the year we built on our previous years' success in winning new
accounts, successfully upgraded our heat recovery ranges to include a cooling
capability to deal with Part O (overheating standard in the building regs) and
designed a more streamlined approach to manufacturing increased volumes which
will be finalised in early 2026. Customer service is key to success, and we
increased our buffer stocks of key product lines to support demand. Whilst new
build completion volumes remained low, the UK has a significant shortage of
new build energy efficient housing, and we are fully prepared should
government policy and a lower interest rate environment support higher volumes
in the years ahead.
Commercial
Sales in our commercial sector increased 6.9% to £30.1 million (2024: £28.2
million). Revenue declined in the first half of the year and was then followed
by strong growth in the second half.
Our ambition is to further enhance our position in the UK commercial
ventilation market. Key personnel changes in the prior year delivered a strong
second half-year performance, and we will continue to strengthen the team in
the coming months. The investment in an enlarged factory floor area in Dudley
in the first half of FY26 will provide us with the headroom to grow.
Notable successes in the year were the return to growth of our Breathing
Buildings brand focusing on the natural and hybrid ventilation market with
most project demand coming from the education sector. In the last three years
we have successfully upgraded the product ranges in this area and
have identified an opportunity to win share in the growing hybrid heat
recovery space. There are further extensions necessary to the product range,
however we believe the market dynamics are favourable for us to further
develop this area.
Our fan coil revenues developed well in the year. Product enhancements were
made to the range, and the production facility in West Molesey is well
equipped to support further revenue growth.
Overall, our plan to enhance our commercial revenue streams made good progress
in the year, and the additional energy and focus from the leadership team
positions us well to build on this in the new year.
Export
Sales in our UK export sector were £15.7 million (2024: £12.1 million), an
organic revenue growth rate of 29.4%. The most notable successes in the year
were both our residential and commercial ventilation solutions sold in the
Irish market. We saw strong demand for heat recovery ventilation solutions in
residential new build, and fan coils for commercial applications performed
excellently in the year. We extended our residential systems commercial
agreement with our regional partner and continue to work closely with them for
mutual success.
OEM
Third party Sales in our OEM sector were £15.1 million (2024: £15.5
million), an organic decline of just 2.0% following a disappointing prior
year.
We completed our streamlining project where we will focus on a narrower but
deeper range of low-carbon motorised impeller solutions. The site
consolidation was finished in the first half of the year, and we benefited
from a significant increase in inhouse demand for motorised impellers linked
to our overall UK organic growth. The business is now well placed to develop
in the new financial year, and we are working on several external revenue
development opportunities.
Business Review - Continental Europe
2025 2024 Change Organic
£m
£m
%
Change (cc)
%
Central Europe 90.6 87.0 4.2 6.0
Nordics 46.0 47.4 (2.9) (2.3)
Total Continental Europe revenue 136.6 134.4 1.7 3.1
Adjusted operating profit 32.9 32.1 2.5
Adjusted operating profit margin (%) 24.1% 23.9% 0.2pp
Reported operating profit 27.3 29.1 (6.5)
Our Continental Europe revenues increased from £134.4 million to £136.6
million, growing 3.1% at cc. Adjusted operating profit was up 2.5% at £32.9
million versus a prior year of £32.1 million. The adjusted operating profit
margin increased in the year by 20bps to 24.1% (2024: 23.9%).
Central Europe
Sales in the Central Europe region grew 6.0% at cc to £90.6 million compared
with the prior year of £87.0 million.
Revenue in Central Europe was a similar mixed picture to the previous year,
with ClimaRad revenue growth and Energy Recovery Industries (ERI) the notable
successes.
ClimaRad continued to grow strongly in the year. In December 2024 we completed
the pre-agreed buy-out of the remaining 24.35% of ClimaRad's shares. The
changeover from private ownership to full Volution ownership has been smooth.
Koen Groenewold, promoted to Managing Director ClimaRad in January 2024, has
been promoted to lead one half of our European regional model. The ClimaRad
management team is largely the same as at the time of the acquisition in 2020,
and we are continuing to invest to further develop the product portfolio for
the future. The Netherlands has been proactively supporting the agenda
for refurbishing existing residential dwellings, through government
legislation, and we see a good opportunity to grow our revenue in this market.
In May 2025 the Board had its annual overseas site visit at our Bosnian
manufacturing facilities for ClimaRad based in Sarajevo. We have continued to
invest in the facility to support the revenue growth and underpin operating
profit margins.
In Germany our revenue performance was similar to the prior year with a
slightly better performance towards the end of FY25. The new build market for
ventilation in Germany has been depressed for a couple of years now, and we
have been focusing on introducing new and upgraded solutions to target market
share which has reduced over the recent years. Our Taris fan and improved
sound insulation cover gained traction in the year, however there is further
scope for gains in the period ahead. Good cost control maintained gross and
operating profit margins, and we made additional investments in our own
external sales personnel to help assist the future revenue growth.
In Belgium we made good progress with the new Econiq family of heat recovery.
Following on from earlier delays to the original launch of the product in
2023, we are now seeing good levels of new project orders and are optimistic
of a recovery in new house construction in the new year.
We made good progress in France with a particular focus on utilising the
product portfolio from across the Group. Good revenue growth was achieved in
the distribution route to market resulting in a substantial uplift in
operating profit margins. The local leadership team have been investing in
greater sales power, and we have some exciting new product developments
planned for 2026. Since acquiring VMI in 2023 the gross margin in France has
increased by 10% due to the benefit of Group value engineering and sourcing
support.
ERI had another year of good organic growth. Since acquiring ERI in 2021 we
have invested in new product ranges, additional manufacturing equipment and
during 2025 we purchased some adjacent land and buildings designed to support
the doubling of our future production capacity. In the first half of 2026 we
will refurbish the acquired buildings, and this will provide us with the
footprint to further grow revenues. Our ambition is to develop ERI into one of
the leading ventilation heat exchanger producers in Europe, and our mix of
investment in automation combined with a low-cost labour location is a strong
recipe for cost competitiveness and success.
Our activities in Slovenia were disappointing in the year, particularly in the
market for residential heat recovery refurbishment. We have utilised some
strong product solutions from inside the Group to support our margins, and
revenue has stabilised.
Nordics
Sales in the Nordics region were £46.0 million (2024: £47.4 million), an
organic revenue decline of 2.3% at cc compared with the previous year.
The Nordic market stabilised in the year with revenues declining 1.2% in the
second half of the year following a decline of 3.2% in the first half. The
team delivered well on product cost initiatives and efficiency projects such
that despite the revenue decline, profit was slightly up.
Sweden's housing market began to stabilise after a significant downturn, but
new construction remained subdued due to high material costs and a low number
of building permits.
We continued to benefit from a strong position in the Swedish residential
refurbishment market and have embarked on a new development project to improve
our leading range of ventilation devices. The new product will be available
for launch in the spring of 2026 and is particularly aimed at the Nordics but
will also work well in some of our other European markets.
We exited the year in stronger shape in the Nordics with the new build project
order book much stronger following the addition of some larger project order
wins delivered in Q4 2025. Refurbishment revenue in the Nordics has been more
positive with Sweden performing well, offset by some market weakness in
Norway.
New build activity in Denmark and Finland was subdued, but there are early
signs of greater project activity since the year end. To support
our development in the new build market we made a significant investment in
new metal working equipment in Sweden, and this will be commissioned and
operable in the first half of 2026. This new investment will help us to
support revenue growth and expand margins in this sector.
Business Review - Australasia
2025 2024 Change Organic
£m
£m
%
Change (cc)
%
Residential 62.1 49.3 26.0 1.3
Commercial 44.3 3.1 1,306.9 (11.2)
Total Australasia revenue 106.4 52.4 102.8 0.6
Adjusted operating profit 21.9 11.9 83.5
Adjusted operating profit margin (%) 20.6% 22.7% (2.1)pp
Reported operating profit 11.0 11.1 (1.5)
Sales in our Australasia region were £106.4 million, with organic growth of
0.6% at cc. The region benefited from the acquisition of Fantech from December
2024 with inorganic growth of 107.2%. Adjusted operating profit increased by
83.5% to £21.9 million from £11.9 million. Adjusted operating profit margins
were down by 210bps to 20.6% versus 22.7% in the prior year, the dilution
relating to the lower margin contribution from the newly acquired Fantech
business. Reported operating profit declined by 1.5% to £11.0 million (2024:
£11.1 million) due to acquisition related non-underlying costs.
The integration of Fantech is going well. We are delighted to welcome our
new colleagues to Volution, and the integration continues to progress as
planned, in large part due to the similar cultures of the respective
companies. Fantech has for a long time been the leading ventilation company in
Australia and coupled with our strong residential leadership position in New
Zealand, the combination provides a formidable platform. Anthony Lamaro, an
existing leader within the Fantech business, with over 19 years of service,
has been appointed to the role of Regional Managing Director, Australasia.
By delivering an improvement in the Fantech operating profit margins since
acquisition, coupled with a step-up in both the local and wider group organic
operating profit margin, the region has delivered an above 20% adjusted
operating profit margin in the year.
Our Australasian revenues are now broadly similar, weighted between commercial
and residential applications, and this has moved considerably since the
acquisition. Volution now has a more balanced portfolio when compared with
our predominantly residentially focused business prior to the transaction.
In New Zealand the market has continued to be challenging following a similar
trajectory in the first half of the year as in 2024. Market confidence has
been low and whilst we have a significant market share in New Zealand activity
levels have been weaker. In February this year Jared Dineen started as the
local leader for Simx and DVS in New Zealand. Bringing considerable experience
from the electrical industry and replacing Ian Borley, our long-serving
regional leader who retired in 2025, we are delighted with the progress Jared
has made. In DVS we have made excellent progress with enhancing product gross
margins through value engineering and procurement initiatives. Despite the
revenue decline in DVS, we were able to substantially increase profitability.
In Australia market conditions are more favourable than in New Zealand. We had
another year of good progress with our ranges of ceiling fans in our Ventair
brand and the Fantech acquisition performed as anticipated with slightly
improved operating profit margins. With our enlarged position and scale in the
Australasian market and representing a larger proportion of our Group
revenues, we have introduced a residential/commercial split of revenues.
Residential revenues grew organically by 1.3%, and our much smaller organic
commercial proportion had an organic decline of 11.2%.
Our residential position in the market encompasses a wider-reaching range of
solutions. From the direct install to consumer model in New Zealand with our
DVS brand, coupled with a leadership position in both Australia and New
Zealand through our distribution channels, we have identified opportunities to
utilise our market reach and further enhance our product offer by utilising
the wider Group product portfolio. Whilst still underdeveloped compared with
the European market we expect to follow a similar regulatory trajectory with
continuous ventilation becoming more commonplace in residential refurbishment
and mechanical ventilation with heat recovery being specified in new build
applications.
Our commercial ventilation offer is one of the most comprehensive available in
both the Australian and New Zealand market. Extensive logistics coverage with
physical distribution locations nationally across both countries enables us to
provide unrivalled product delivery turnaround and local technical support. We
see significant opportunities to further gain market share utilising a
combination of leading brands, products and locations. In April 2024 Safe Work
Australia replaced the previous Workplace Exposure Standards (WES) with new
Workspace Exposure Limits (WEL), officially adopted into policy in 2024,
although not legally enforceable until 1 December 2026. These more onerous
requirements will increase demand for commercial workplace ventilation, and we
are already engaged with several new opportunities which will require more
comprehensive and increased value solutions. As with our residential offer
there are opportunities to enhance our commercial market reach by utilising
products that are available within the Group and made available through our
newly acquired brands and additional locations. The newly acquired business
provides customers with a comprehensive applications selection tool. The 'fan
selector programme' is one of the most advanced selection tools available in
the market and is the go-to solution for M&E contractors and consultants
in the market.
Across the region we have developed many new initiatives to enhance our
position in 2026. A mixture of cost down initiatives and new product launches
positions us well to capitalise on our enhanced platform and support our goal
to further enhance gross and operating profit margins of the acquired
activities.
Financial Review
Overview
I am pleased to report another year of strong financial performance for the
Group. We performed well against our financial key performance indicators with
strong total revenue and constant currency (cc) organic revenue growth,
continued high margins and returns and excellent cash generation.
FY25's strong performance continues the Group's track record of delivering
long-term compounding growth and returns for our shareholders. Compound annual
growth in revenue, adjusted operating profit and adjusted basic earnings per
share now stand at respectively 12.0%, 12.1% and 12.8% across our 11 years
since listing.
Financial results
Group revenue grew 20.6% to £419.1 million (2024: £347.6 million), with
organic growth at cc of 5.7% and a 16.2% contribution from the acquisition of
Fantech, partly offset by an adverse 1.3% impact from movements in foreign
exchange. All three regions grew revenue organically (cc), with UK up 9.5%,
Continental Europe up 3.1% cc and Australasia up 0.6% cc. Further information
on the performance and market drivers per region is given in the business
reviews.
Gross margins decreased by 220bps to 49.1%, due primarily to a £7.1 million
non-underlying acquisition fair value inventory adjustment (see next page).
Excluding this non underlying item, gross margins were 50.8% (2024: 51.3%)
with an organic improvement of 60bps offset by a dilutive impact from Fantech.
Procurement initiatives, value engineering and a modest level of price
increase all contributed to the organic improvement. Administration and
distribution costs, shown in the table below, increased by £18.9 million,
£15.1 million attributable to Fantech, with costs excluding Fantech up £3.8
million or 3.8% on the prior year.
Adjusted operating profit grew by 19.7% to £93.4 million (2024: £78.0
million) with adjusted operating margins of 22.3%, down from 22.5% in the
prior year. The small reduction in adjusted operating margin was due to the
dilution from the acquisition of Fantech, with organic margins (excluding
Fantech) up 50bps versus the prior year. Reported operating profit declined by
4.5% to £67.3 million (2024: £70.4 million) due to acquisition related
non-underlying costs.
Adjusted net finance costs of £9.1 million were up 40.4% compared with prior
year (2024: £6.4 million) due to the increase in debt relating to the initial
AUD$221 million (£107.4 million, net of cash acquired) consideration for
Fantech, plus £30.4 million for the purchase of the final 24.35% of ClimaRad.
The weighted average interest rates on gross debt in the year was 5.8% (2024:
6.8%).
Adjusted profit before tax was £83.9 million, up 18.7% versus prior year
(2024: £70.7 million). Adjusted basic earnings per share grew by 18.2% to
33.1 pence (2024: 28.0 pence). Acquisition-related non-underlying costs (see
below) meant that reported profit before tax was £54.5 million, down 3.7%
(2024: £56.6 million). Reported basic earnings per share was 21.0 pence
(2024: 21.6 pence).
Reported and adjusted results
The Group uses some Alternative Performance Measures to track and assess the
underlying performance of the business, as set out in note 2 of the
consolidated financial statements.
The adjustments relate substantially to acquisitions and are as follows:
· Amortisation of acquired inventory fair value adjustment £7.1 million
(2025: £nil) in respect of Fantech.
· Amortisation of intangible assets acquired through business combinations
£11.3 million (2024: £9.3 million), mainly due to the new intangible assets
relating to Fantech.
· Costs of business combinations £3.1 million (2024: £0.2 million), up
£2.9 million principally due to diligence and legal work relating to the
acquisition of Fantech.
· Re-measurement of financial liabilities of £0.5 million (2024: £0.9
million) relating to ClimaRad.
· Fair value movements in contingent consideration of £4.7 million (2024:
£1.9 million) relating to DVS (£2.6 million), ClimaRad (£2.0 million) and
ERI (£0.1 million) where final trading performance within the earn-out
periods was overall stronger than expected, resulting in a net increase in the
final contingent consideration payable.
· Unwinding of discounting on future consideration of £3.2 million (2024:
£6.6 million) of which £2.0 million related to ClimaRad, £0.4 million to
ERI and £0.8 million to Fantech.
Year ended 31 July 2025 Year ended 31 July 2024
Reported Adjustments Adjusted Reported Adjustments Adjusted
£m
£m
results
£m
£m
results
£m
£m
Revenue 419.1 - 419.1 347.6 - 347.6
Gross profit 205.6 7.1 212.7 178.3 - 178.3
Administration and distribution costs excluding the costs listed below (119.2) - (119.2) (100.3) - (100.3)
Amortisation of intangible assets acquired
through business combinations (11.3) 11.3 - (9.3) 9.3 -
Fair value movement in contingent consideration (4.7) 4.7 - 1.9 (1.9) -
Costs of business combinations (3.1) 3.1 - (0.2) 0.2 -
Operating profit 67.3 26.2 93.4 70.4 7.6 78.0
Re-measurement of financial liabilities (0.5) - (0.5) (0.9) - (0.9)
Unwinding of discounting on future consideration (3.2) 3.2 - (6.6) 6.6 -
Net gain on financial instruments at fair value - - - 0.1 (0.1) -
Other net finance costs (9.1) - (9.1) (6.4) - (6.4)
Profit before tax 54.5 29.4 83.9 56.6 14.1 70.7
Income tax (13.0) (5.3) (18.3) (13.8) (1.6) (15.4)
Profit after tax 41.5 24.1 65.6 42.8 12.5 55.3
Currency impacts
Aside from Sterling, the Group's key trading currencies for our non-UK
businesses are the Euro, representing approximately 23% of Group revenues,
Australian Dollar (18%), New Zealand Dollar (8%) and Swedish Krona (7%). We do
not hedge the translational exchange impact arising from the conversion of the
results of overseas subsidiaries, although we do denominate some of our
borrowings in our non-Sterling trading currencies, which offsets some of the
translation risk relating to net assets.
In FY25 we experienced a significant currency headwind of £4.5 million at a
revenue level with a £0.7 million impact to adjusted operating profit. All of
our principal non-Sterling currencies weakened relative to Sterling in the
year, as shown in the below table.
Average rate Average rate Movement
2025 2024
Euro 1.19 1.17 (1.8)%
Swedish Krona 13.37 13.40 0.3%
New Zealand Dollar 2.21 2.08 (5.8)%
Australian Dollar 2.01 1.92 (4.6)%
The Group had non-Sterling denominated borrowings as at 31 July 2025 of
£144.7 million (2024: £49.8 million) of which:
· Euro: £66.0 million
· AUD$: £63.2 million
· SEK: £15.5 million
The Sterling value of these foreign currency denominated loans decreased by
£3.2 million because of exchange rate movements (2024: decreased by £1.1
million).
Transactional foreign exchange exposures arise principally from our US Dollar
denominated purchases of materials from our suppliers in the Far East. We aim
to purchase a substantial proportion of our expected requirements
approximately 12 months forward, and as such, we have forward currency
contracts in place for approximately 80% of our forecast average forward
requirements for the 2026 financial year.
Taxation
Our adjusted effective tax rate of 21.8% (2024: 21.8%) is in line with last
year. The acquisition of Fantech, with Australasian tax rates at 30%, had an
adverse impact on our adjusted effective tax rate, this was however, offset by
reductions due to increased patent box benefits in the UK and adjustments in
respect of prior periods.
We expect our medium-term adjusted effective tax rate to be in the range of
21% to 25% of the Group's adjusted profit before tax, depending on the
business mix and the profile of acquisitions.
Our reported effective tax rate for the year was 23.8% (2024: 24.4%).
Excellent cash generation
Volution's high operating margins and asset light business model and
operations drives a profile of strong cash generation. Underpinned by a
working capital inflow of £4.5 million in the year (2024: inflow of £2.7
million), principally due to inventory optimisation, the Group delivered a
strong adjusted operating cash flow of £104.5 million (2024: £85.8 million).
Group cash conversion, defined as adjusted operating cash flow as a percentage
of adjusted earnings before interest, tax and amortisation, was 109% (2024:
107%).
Capital expenditure of £8.4 million (2024: £7.1 million) included £2.2
million relating to the ERI expansion programme, £1.6 million relating to new
product development and £1.1 million for Nordics metal capability.
A summary of the year's cash flow is shown in the tables below, with the
principal outflows being in relation to business combinations (£145.7 million
including acquisitions, contingent consideration, earn-outs and associated
fees), tax paid (£20.1 million), dividends (£19.0 million) and capital
expenditure (£8.4 million).
Net debt at 31 July 2025 was £165.7 million (2024: £57.6 million), and is
set out in the table below. Leverage of net debt (excluding lease liabilities)
to adjusted EBITDA was 1.2x at 31 July 2025 (2024: 0.4x), which coupled with
our reliable high levels of cash conversion give us strong capability for
future growth investment.
Value-adding acquisitions
Acquisition spend in the year net of cash acquired was £145.7 million (2024:
£13.4 million). We completed the acquisition of Fantech (Australasia), for an
initial consideration of AUD$221 million, (£107.4 million, net of cash
acquired), on a debt-free cash-free basis, as well as purchasing the
remaining 24.35% of ClimaRad (£30.4 million).
A deferred consideration element of AUD$60 million is payable in December 2025
in respect of the Fantech acquisition.
Movements in net debt position for the year ended 31 July
2025 2024
£m
£m
Opening net debt 1 August (57.6) (89.3)
Movements from continuing business operations:
Adjusted EBITDA 106.3 89.0
Movement in working capital 4.5 2.7
Share-based payments 2.1 1.2
Capital expenditure (8.4) (7.1)
Adjusted operating cash flow: 104.5 85.8
· Interest paid net of interest received (7.6) (5.0)
· Income tax paid (20.1) (16.8)
· Dividend paid (19.0) (16.4)
· Purchase of own shares (2.3) (2.7)
· Issue costs of new borrowings (1.8) -
· IFRS 16 payment of lease principle (6.0) (5.7)
· IFRS 16 (increase)/decrease in lease liabilities (13.7) 5.1
Movements from business combinations:
· Cash flow relating to business combination costs (3.1) (0.2)
· Business combination of subsidiaries, net of cash acquired (107.4) (8.5)
· Acquisition of remaining 24.35% of ClimaRad and repayment of vendor loan (30.4) -
· Payment of i-Vent Contingent consideration - (2.6)
· Payment of ERI Contingent consideration (4.6) (1.9)
· Business combination of subsidiaries, debt repaid (0.2) (0.2)
· FX on foreign currency loans/cash 3.6 0.8
Closing net debt 31 July (165.7) (57.6)
Reconciliation of bank debt to net debt
2025 2024
£m
£m
Bank debt (144.7) (49.8)
Cash 18.7 18.2
Net debt (excluding lease liabilities) (126.0) (31.6)
Lease liabilities (39.7) (26.0)
Net debt (165.7) (57.6)
Reconciliation of reported to adjusted operating cash flow
2025 2024
£m
£m
Net cash flow from operating activities 85.0 75.7
Net capital expenditure (8.3) (6.9)
UK and overseas tax paid 20.1 16.8
Cash flow relating to business combination 3.1 0.2
Payment of ERI contingent consideration 4.6 -
Adjusted operating cash flow 104.5 85.8
Funding facilities and liquidity
As at 31 July 2025, the Group had in place a £230 million multicurrency
'Sustainability Linked Revolving Credit Facility', together with an accordion
of up to £70 million. £30 million of the £230 million facility matures in
September 2027, with £200 million maturing in September 2028. A further
option is in place to extend the £200 million by an additional year.
As at 31 July 2025, the Group had £85.3 million of undrawn, committed bank
facilities (2024: £100.2 million) and £18.7 million of cash and cash
equivalents (2024: £18.2 million).
Returns on Invested Capital (ROIC) remains >25% post Fantech
The Group's ROIC (pre-tax) for the financial year was 25.2% (2024: 27.8%),
measured as adjusted operating profit for the year divided by average net
assets adding back net debt, acquisition related liabilities, and historic
goodwill and acquisition-related amortisation charges (net of the associated
deferred tax). The measure excludes the goodwill and intangible assets arising
from the original transaction that created the Group when it was bought via a
leveraged buy-out transaction by private equity house Towerbrook Capital
Partners in 2012.
On a like-for-like basis our organic revenue growth of 5.7%cc coupled with
strong operating profit growth and net inflow of working capital would have
yielded a c240bps increase in ROIC to just over 30%, with then the impact of
the Fantech acquisition bringing it down to 25.2%.
Although, at the time of entry to the Group, acquisitions will be dilutive to
ROIC, our track record of improving returns post-acquisition, coupled with
continued organic growth, provides confidence in maintaining Group ROIC above
20% over the medium term while continuing to invest to grow the business.
Recommended dividend
The Board has recommended a final dividend of 7.4 pence which, together with
an interim dividend paid of 3.4 pence per share, gives a total dividend per
share of 10.8 pence (2024: 9.0 pence), up 20.0% in total. The final dividend
is subject to approval by shareholders at the Annual General Meeting on 10
December 2025 and, if approved, will be paid on 16 December 2025.
Employee Benefit Trust
During the year £3.0 million of non-recourse loans (2024: £2.7 million) were
made to the Volution Employee Benefit Trust for the purpose of purchasing
shares in Volution Group plc to meet the Company's obligations under its
share incentive plans. The Volution Employee Benefit Trust acquired 515,000
shares at an average price of £5.83 per share in the period (2024: 770,000
shares at average price of £3.90) and 653,444 shares (2024: 1,019,886 shares)
were released by the trustees with a value of £3,694,058 (2024: £3,942,724).
The Volution Employee Benefit Trust has been consolidated into the results and
the shares purchased have been treated as treasury shares deducted from
shareholders' funds.
Andy O'Brien
Chief Financial Officer
8 October 2025
Directors' responsibilities in respect of the financial statements
We confirm that to the best of our knowledge:
· the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Company and
the undertakings included in the consolidation taken as a whole; and
· the Strategic report includes a fair review of the development
and performance of the business and the position of the Company, and the
undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face. We
consider the annual report and financial statements, taken as a whole, are
fair, balanced and understandable and provide the information necessary for
shareholders to assess the Company's position and performance, business model
and strategy.
The contents of this announcement, including the responsibility statement
above, have been extracted from the annual report and accounts for the year
ended 31 July 2025 which may be found at www.volutiongroupplc.com and will be
despatched to shareholders on or around 22 October 2025. Accordingly, this
responsibility statement makes reference to the financial statements of the
Company and the group and to the relevant narrative appearing in that annual
report and accounts rather than the contents of this announcement.
On behalf of the Board
Ronnie
George
Andy O'Brien
Chief Executive
Officer
Chief Financial Officer
8 October 2025
8 October 2025
Consolidated Statement of Comprehensive Income
For the year ended 31 July 2025
Notes 2025 2024
£000
£000
Revenue from contracts with customers 3 419,114 347,611
Cost of sales (213,496) (169,344)
Gross profit 205,618 178,267
Administrative and distribution expenses (130,567) (109,545)
Operating profit before separately disclosed items 75,051 68,722
Costs of business combinations (3,138) (206)
Fair value movement in contingent consideration 17 (4,702) 1,845
Operating profit 67,211 70,361
Finance income 5 306 283
Finance costs 5 (9,404) (6,605)
Re-measurement of financial liabilities 17 (455) (870)
Unwinding of discounting on future consideration 17 (3,176) (6,599)
Profit before taxation 54,482 56,570
Taxation 6 (12,949) (13,773)
Profit for the year 41,533 42,797
Other comprehensive loss
Other comprehensive loss that may be reclassified to profit or loss in
subsequent periods:
Exchange differences arising on translation of foreign operations (2,965) (6,151)
Gain on currency loans relating to the net investment in foreign operations 3,210 1,124
Other comprehensive loss for the year 245 (5,027)
Total comprehensive income for the year, net of tax 41,778 37,770
Earnings per share
Basic earnings per share 7 21.0p 21.6p
Diluted earnings per share 7 20.7p 21.4p
Consolidated Statement of Financial Position
At 31 July 2025
Notes 2025 2024
£000
£000
ASSETS
Non-current assets
Property, plant and equipment 8 34,010 30,193
Right-of-use assets 16 39,949 24,894
Intangible assets - goodwill 9 235,785 171,340
Intangible assets - others 11 125,246 76,902
Total non-current assets 434,990 303,329
Current assets
Inventories 13 71,294 53,112
Trade and other receivables 14 77,390 55,239
Income tax assets - 392
Cash and short-term deposits 18,780 18,243
Total current assets 167,464 126,986
Total assets 602,454 430,315
LIABILITIES
Current liabilities
Trade and other payables 15 (71,739) (46,653)
Refund liabilities (12,806) (10,847)
Income tax liabilities (2,308) (3,940)
Other financial liabilities 17 (31,597) (22,068)
Interest-bearing loans and borrowings 18 (6,396) (14,363)
Provisions 19 (2,133) (1,450)
Total current liabilities (126,979) (99,321)
Non-current liabilities
Interest-bearing loans and borrowings 18 (177,021) (71,630)
Other financial liabilities 17 (1,500) -
Provisions 19 (730) (819)
Deferred tax liabilities 21 (26,236) (12,622)
Total non-current liabilities (205,487) (85,071)
Total liabilities (332,466) (184,392)
Net assets 269,988 245,923
Equity
Share capital 20 2,000 2,000
Share premium 20 11,527 11,527
Treasury shares (2,999) (2,250)
Capital reserve 93,855 93,855
Share-based payment reserve 6,436 5,427
Foreign currency translation reserve (6,007) (6,252)
Retained earnings 165,176 141,616
Total equity 269,988 245,923
The consolidated financial statements of Volution Group plc (registered
number: 09041571) were approved by the Board of Directors and authorised for
issue on 8 October 2025.
On behalf of the Board
Ronnie George Andy O'Brien
Chief Executive Officer Chief Financial Officer
Consolidated Statement of Changes in Equity
For the year ended 31 July 2025
Share Share Treasury Capital Share-based Foreign Retained Total
capital premium shares reserve payment currency earnings equity
£000 £000 £000 £000 reserve translation £000 £000
£000 reserve
£000
At 1 August 2023 2,000 11,527 (2,390) 93,855 5,584 (1,225) 116,894 226,245
Profit for the year - - - - - - 42,797 42,797
Other comprehensive loss - - - - - (5,027) - (5,027)
Total comprehensive income - - - - - (5,027) 42,797 37,770
Purchase of own shares - - (2,732) - - - - (2,732)
Vesting of share options - - 2,872 - (1,214) - (1,658) -
Share-based payment including tax - - - - 1,057 - - 1,057
Dividends paid (note 22) - - - - - - (16,417) (16,417)
At 31 July 2024 2,000 11,527 (2,250) 93,855 5,427 (6,252) 141,616 245,923
Profit for the year - - - - - - 41,533 41,533
Other comprehensive loss - - - - - 245 - 245
Total comprehensive income - - - - - 245 41,533 41,778
Correction to IFRS 16 lease transition* - - - - - - 932 932
Purchase of own shares - - (3,003) - - - - (3,003)
Vesting of share options - - 2,254 - (1,659) - 100 695
Share-based payment including tax - - - - 2,668 - - 2,668
Dividends paid (note 22) - - - - - - (19,005) (19,005)
At 31 July 2025 2,000 11,527 (2,999) 93,855 6,436 (6,007) 165,176 269,988
* The IFRS 16 item above relates to the correction of an
immaterial error identified in the value of lease liabilities and
corresponding retained earnings adjustment recognised on transition to IFRS
16.
Consolidated Statement of Cash Flows
For the year ended 31 July 2025
Notes 2025 2024
£000
£000
Operating activities
Profit for the year after tax 41,533 42,797
Adjustments to reconcile profit for the year to net cash flow from operating
activities:
Income tax 12,949 13,773
Gain on disposal of property, plant and equipment and intangible assets - (154) (184)
other
Amortisation of acquired inventory fair value adjustment 7,048 -
Fair value movement in contingent consideration 17 4,702 (1,845)
Re-measurement of financial liabilities 17 455 870
Unwinding of discounting on future consideration 17 3,176 6,599
Finance income 5 (306) (283)
Finance costs 5 9,404 6,605
Share-based payment expense 2,154 1,200
Depreciation of property, plant and equipment 8 4,652 4,413
Depreciation of right-of-use assets 16 6,070 4,738
Amortisation of intangible assets 11 13,540 11,129
Working capital adjustments net of the effect of acquisitions:
Increase in trade receivables and other assets (7,060) (2,776)
Decrease in inventories 6,185 5,976
Amortisation of acquired inventory fair value adjustment (7,048) -
Increase/(decrease) in trade and other payables 11,985 (670)
Increase in provisions 389 204
Cash generated by operations 109,674 92,546
UK income tax paid (5,500) (7,019)
Overseas income tax paid (14,619) (9,817)
Payment of ERI contingent consideration 12 (4,580) -
Net cash flow generated from operating activities 84,975 75,710
Investing activities
Purchase of intangible assets 11 (2,056) (1,918)
Purchase of property, plant and equipment 8 (6,568) (5,464)
Proceeds from disposal of property, plant and equipment and intangible assets 338 445
- other
Business combination of subsidiaries, net of cash acquired 12 (107,358) (8,498)
Payment of i-Vent contingent consideration 12 - (2,566)
Payment of ERI deferred consideration 12 - (1,874)
Interest received 306 283
Net cash flow used in investing activities (115,338) (19,592)
Financing activities
Repayment of interest-bearing loans and borrowings (100,681) (56,734)
Repayment of VMI debt acquired (248) (237)
Repayment of ClimaRad vendor loan (9,463) -
Consideration paid for ClimaRad non-controlling interest 12 (20,853) -
Proceeds from new borrowings 198,828 28,283
Issue costs of new borrowings (1,822) -
Interest paid (7,955) (5,321)
Payment of principal portion of lease liabilities (5,949) (5,672)
Dividends paid to equity holders of the parent 26 (19,005) (16,417)
Purchase of own shares (2,308) (2,732)
Net cash flow generated from/(used in) financing activities 30,544 (58,830)
Net increase/(decrease) in cash and cash equivalents 181 (2,712)
Cash and cash equivalents at the start of the year 18,243 21,244
Effect of exchange rates on cash and cash equivalents 356 (289)
Cash and cash equivalents at the end of the year 18,780 18,243
Volution Group plc (the Company) is a public limited company and is
incorporated and domiciled in the UK (registered number: 09041571). The share
capital of the Company is listed on the London Stock Exchange. The address of
its registered office is Fleming Way, Crawley, West Sussex RH10 9YX.
Notes to the Consolidated Financial Statements
For the year ended 31 July 2025
1. Accounting policies
Basis of preparation
The Group's consolidated financial statements have been prepared in accordance
with UK-adopted international accounting standards (UK-adopted IAS) and with
the requirements of the Companies Act 2006 as applicable to companies
reporting under those standards.
The consolidated financial statements have been prepared under the historical
cost convention, except for business combinations, other financial
liabilities, share based payments, and derivative financial instruments
measured at fair value, as referred to in the respective accounting policies
below. The consolidated financial statements are presented in GBP, being the
functional currency of the parent company. All values are rounded to the
nearest thousand (£000), except as otherwise indicated.
Basis of consolidation
The consolidated financial statements comprise the financial statements of the
Company and its subsidiaries as at 31 July 2025. Control is achieved when the
Group is exposed, or has rights, to variable returns from its involvement with
the investee and has the ability to affect those returns through its power
over the investee.
The Group re-assesses whether or not it controls an investee if there are
changes to the facts and circumstances indicate that there are changes to one
or more of the three elements of control. The financial statements of
subsidiaries are prepared for the same reporting periods using consistent
accounting policies. All intercompany transactions and balances, including
unrealised profits arising from intra-group transactions, have been eliminated
on consolidation.
Going concern
The financial position of the Group, its cash flows and liquidity position are
set out in the financial statements. Furthermore, note 27 to the consolidated
financial statements includes the Group's objectives and policies for managing
its capital, its financial risk management objectives, details of its
financial instruments and its exposure to credit and liquidity risk.
The financial statements have been prepared on a going concern basis. In
adopting the going concern basis, the Directors have considered external
factors, including potential scenarios arising from the political and
macroeconomic uncertainty that has arisen post-Covid, the invasion of Ukraine
early in 2022, from conflict in the Middle east, and from the Group's other
principal risks set out of page 45. Under a severe but plausible downside
scenario, the Group remains comfortably within its debt facilities and the
attached financial covenants within the period of assessment to 31 January
2027. The Directors therefore believe, at the time of approving the financial
statements, that the Company is well placed to manage its business risks
successfully and remains a going concern. The key facts and assumptions in
reaching this determination are summarised below.
Our financial position remains robust with the new debt facilities of £230
million, and an accordion of a further £70 million, reducing to a £200
million facility in October 2027 and maturing in September 2028.The financial
covenants on these facilities are for leverage (net debt/adjusted EBITDA) of
not more than 3x and for interest cover (adjusted EBITDA/net finance charges)
of not less than 4x. As at 31 July 2025, leverage was 1.2 (31 July 2024: 0.4)
and interest cover was 13.6 (31 July 2024: 14.8).
Our base case scenario has been prepared using robust forecasts from each of
our operating companies, with each considering the risks and opportunities the
businesses face.
We have then applied a severe but plausible downside scenario, based on a more
severe downturn than seen during the financial crisis and Covid pandemic,
in order to model the potential concurrent impact of:
· a general economic slowdown reducing revenue by 15% compared with
forecast, with a corresponding reduction in variable cost base;
· supply chain difficulties or input price increases reducing gross
profit margin by 10%; and
· a 1% interest rate increase impacting cost of debt.
A reverse stress test scenario has also been modelled which shows a revenue
contraction of c.26% against the base case with no mitigations would be
required to breach covenants, which is considered extremely remote in
likelihood of occurring. Mitigations available within the control of
management include reducing discretionary capex and discretionary indirect
costs.
Over the short period of our climate change assessment (aligned to our going
concern assessment), we have concluded that there is no material adverse
impact of climate change and hence have not included any impacts in either our
base case or downside scenarios of our going concern assessment. We have not
experienced material adverse disruption during periods of adverse or extreme
weather in recent years, and we would not expect this to occur to a material
level over the period of our going concern assessment.
The Directors have concluded that the results of the scenario testing,
combined with the significant liquidity profile available under the revolving
credit facility, confirm that the Group remains a going concern.
Foreign currencies
For the purpose of presenting consolidated financial information, the assets
and liabilities of the Group's foreign operations are expressed in GBP using
exchange rates prevailing at the end of the reporting period. Income and
expenses are translated at the average exchange rate for the period. Exchange
differences arising are classified as other comprehensive income and are
transferred to the foreign currency translation reserve. All other translation
differences are taken to profit and loss with the exception of differences on
foreign currency borrowings to the extent that they are used to finance or
provide a hedge against Group equity investments in foreign operations, in
which case they are taken to other comprehensive income together with the
exchange difference on the net investment in these operations.
Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group's accounting policies, management is required
to make judgements, estimates and assumptions about the carrying amounts of
assets and liabilities that are not readily apparent from other sources.
The key judgement, apart from any involving estimations, that has the most
significant effect on the amounts recognised in the financial statements is
the identification of the Group's cash generating units (CGUs) and the
grouping of those CGUs for goodwill impairment testing purposes. This
judgement could have a significant impact on the carrying value of goodwill
and other intangible assets in the financial statements. Hence, the Directors
have concluded that this is a key judgement under the scope of paragraph 122
of IAS 1. Further details can be found in note 10 (impairment assessment of
goodwill).
Valuation of Fantech acquisition intangibles
The material estimates relevant to the current financial year relate to inputs
into the valuation of Fantech acquired customer relationships and trademark
intangible assets. Reasonably possible changes to key estimates in the
valuation of these assets would have a material impact on the carrying value
of acquired intangible assets and hence the Directors have concluded that this
is a material accounting estimate. Further details can be found in note 12
(business combinations).
The Directors have concluded that there are no additional major sources of
estimation uncertainty that have a significant risk of resulting in a material
adjustment to the carrying amounts of assets and liabilities within the next
financial year.
Other judgements and estimates, which the Directors do not believe to be
critical accounting judgements or key sources of estimation uncertainty under
the scope of paragraph 122 or 125 of IAS1, but for which additional
disclosures have been made in the relevant notes, include estimates and
assumptions made related to: impairment assessment of goodwill (note 10), and
assumptions relating to future performance of recent acquisitions in the
valuation of various contingent financial liabilities (note 17).
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
Separately disclosed items
The Group discloses some items on the face of the consolidated statement of
comprehensive income by virtue of their nature, size or incidence to allow a
better understanding of the underlying trading performance of the Group. These
separately disclosed items include, but are not limited to, significant
restructuring costs and significant business combination and related
integration and earn-out costs.
Revenue from contracts with customers (note 3)
Sale of products
Revenue from the sale of products is recognised at the point in time when
control of the asset is transferred to the buyer, usually on the delivery of
the goods.
The Group considers whether there are other promises in the contract that are
separate performance obligations to which a portion of the transaction price
needs to be allocated (e.g. warranties and volume rebates). In determining the
transaction price for the sale of ventilation products, the Group considers
the effects of variable consideration (if any).
Volume rebates
The Group provides retrospective volume rebates to certain customers once the
quantity of products purchased during the period exceeds a threshold specified
in the contract.
Before including any amount of variable consideration in the transaction
price, the Group considers whether the amount of variable consideration is
constrained. The Group determined that the estimates of variable consideration
are not constrained, other than with respect to volume rebates, based on its
historical experience, business forecasts and the current economic conditions.
In addition, the uncertainty on the variable consideration will be resolved
within a short timeframe.
Volume rebates continued
At the reporting date, the Directors make estimates of the amount of rebate
that will become payable by the Group under these agreements; to estimate the
variable consideration for the expected future rebates, the Group applies the
expected value method for contracts with more than one volume threshold. Where
the respective customer has been engaged with the Group for a number of years,
historical settlement trends are also used to assist in ensuring an
appropriate estimate is recorded at the reporting date and that appropriate
internal approvals and reviews take place before rebates are recorded.
The sales rebate provision is recognised within refund liabilities, rather
than trade receivables, as a significant proportion of the agreements across
the Group do not provide for credit notes to be raised against receivable
balances. Rather, cash payment of the rebate amount due is expected.
Furthermore, the majority of rebate agreements do not contain a clause which
provides a legally enforceable right to offset invoiced amounts.
Installation services
The Group provides installation services that are bundled together with the
sale of equipment to a customer.
Contracts for bundled sales of equipment and installation services are
comprised of two performance obligations because the promises to transfer
equipment and provide installation services are capable of being distinct and
separately identifiable. Accordingly, the Group allocates the transaction
price based on an estimate of the relative standalone selling prices of the
equipment and the residual approach for installation services.
The Group recognises revenue from installation services at a point in time
after the service has been performed; this is because installation of the
ventilation equipment is generally over a small timeframe, usually around one
to two days.
Contract balances
There are no contract assets or liabilities included within the statement of
financial position, as invoicing closely aligns with point of revenue
recognition.
Segmental analysis (note 4)
The method of identifying reporting segments is based on internal management
reporting information that is regularly reviewed by the Chief Operating
Decision-Maker, which is considered to be the Chief Executive Officer of the
Group.
In identifying its operating segments, management follows the Group's market
sectors. These are UK, Continental Europe (Nordics and Central Europe) and
Australasia.
The measure of revenue reported to the Chief Operating Decision-Maker to
assess performance is total revenue for each operating segment. The measure of
profit reported to the Chief Operating Decision-Maker to assess performance is
adjusted operating profit (see note 24 for definition) for each operating
segment. Gross profit and the analysis below segment profit is additional
voluntary information and not 'segment information' prepared in accordance
with IFRS 8.
Finance revenue and costs are not allocated to individual operating segments
as the underlying instruments are managed on a Group basis.
Total assets and liabilities are not disclosed as this information is not
provided by operating segment to the Chief Operating Decision-Maker on a
regular basis.
Finance income and costs (note 5)
Net financing costs comprise interest income on funds invested, changes in the
fair value of financial instruments and interest expense on borrowings.
Interest income and expense is recognised as it accrues in the statement of
comprehensive income using the effective interest method.
Income tax (note 6)
Current income tax assets and liabilities are measured at the amount expected
to be recovered from, or payable to, the taxation authorities. The tax rates
and tax laws used to compute the amount are those that are enacted at the
reporting date. The Group's deferred tax policy is disclosed separately later
in this note.
Property, plant and equipment (note 8)
Property, plant and equipment is stated at cost, net of accumulated
depreciation and impairment losses, if any. Such cost includes the cost of
replacing part of the property, plant and equipment; when significant parts of
property, plant and equipment are required to be replaced at intervals, the
Group recognises such parts as individual assets with specific useful lives
and depreciates them accordingly. All other repair and maintenance costs are
recognised in the statement of comprehensive income as incurred.
Depreciation is charged so as to write off the cost or valuation of assets,
except freehold land, over their estimated useful lives using the straight
line method.
Tangible assets arising from a business combination are recognised initially
at fair value at the date of acquisition.
The estimated useful lives, residual values and depreciation methods are
reviewed at each year-end, with the effect of any changes in estimates
accounted for on a prospective basis.
The following useful lives are used in the calculation of depreciation:
Freehold buildings - 30-50 years
Plant and machinery - 5-10 years
Fixtures, fittings, tools, equipment and vehicles - 4-10 years
Depreciation is charged to either cost of sales or administrative expenses
based on how the asset is used within the business.
Goodwill (note 9)
Goodwill is initially recognised at cost, being the excess of the aggregate of
the consideration transferred over the net identifiable assets acquired and
liabilities assumed. During the measurement period (12 months from the date of
acquisition) adjustments could be made to goodwill as a result of new
information relating to events or circumstances relating to the acquisition
date.
Following initial recognition, goodwill is measured at cost less any
accumulated impairment losses.
Impairment assessment of goodwill (note 10)
Goodwill is required to be tested annually for impairment. An impairment loss
is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount, where the recoverable amount is the higher of the asset's
fair value less costs of disposal and value-in-use.
Goodwill acquired through business combinations has been allocated, for
impairment testing purposes, to a group of cash generating units (CGUs). These
grouped CGUs are: UK, Central Europe, Nordics and Australasia. This is also
the level at which management is monitoring the value of goodwill for internal
management purposes. The identification of the Group's CGUs used for
impairment testing is considered a critical judgement within the scope of
paragraph 122 of IAS1.
The Group's value-in-use calculation is based on a discounted cash flow model.
Intangible assets - other (note 11)
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination are identified and
recognised separately from goodwill where they satisfy the definition of an
intangible asset and their fair values can be measured reliably. The cost of
such intangible assets is their fair value at the business combination date.
The fair value of patents, trademarks and customer base acquired and
recognised as part of a business combination is determined using the
relief-from-royalty method or multi-period excess earnings method.
Research and development
Research costs are expensed as incurred. Development expenditure on an
individual project is recognised as an intangible asset when the Company can
demonstrate: the technical feasibility of completing the intangible asset so
that it will be available for use or sale; its intention to complete and its
ability to use or sell the asset; how the asset will generate future economic
benefits; the availability of resources to complete the asset; and the ability
to reliably measure the expenditure during development.
Software costs
Software that is not integral to an item of property, plant or equipment is
recognised separately as an intangible asset.
Subsequent measurement of intangible assets
Intangible assets with a finite life are amortised on a straight line basis
over their estimated useful lives as follows:
Development costs 10 years
Software costs 5-10 years
Customer base 5-10 years
Trademarks 10-25 years
Patents/technology 5-20 years
The estimated useful life and amortisation methods are reviewed at the end of
each reporting period, with the effect of any changes in estimate being
accounted for on a prospective basis.
Impairment of other non-current assets excluding goodwill
Assets that are subject to amortisation are reviewed for impairment whenever
events or circumstances indicate that the carrying amount may not be
recoverable. At each reporting date, the Group completes an assessment of
indicators of impairment impacting non-current assets excluding goodwill. If
any such indication exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss, if any.
Where it is not possible to estimate the recoverable amount of an individual
asset, the Group estimates the recoverable amount of the CGU to which the
asset belongs. Where a reasonable and consistent basis of allocation can be
identified, corporate assets are also allocated to individual CGUs, or
otherwise they are allocated to the smallest group of CGUs for which a
reasonable and consistent allocation basis can be identified.
Business combinations (note 12)
Business combinations are accounted for using the acquisition method. The cost
of the business combination is measured as the aggregate of the consideration
transferred, measured at fair value on the date of the business combination.
The business combination costs incurred are expensed.
When the Group acquires a business, it assesses the financial assets and
liabilities assumed for appropriate classification and designation in
accordance with the contractual terms, economic circumstances and pertinent
conditions at the business combination date.
Contingent and/or deferred consideration (note 17) resulting from business
combinations is accounted for at fair value at the acquisition date as part of
the business combination, and it is subsequently re-measured to fair value at
each reporting date, with changes in fair value recognised in profit or loss.
The key estimates and assumptions used in determining the discounted
cash flows take into consideration the probability of meeting each
performance target and a discount factor.
Inventories (note 13)
Inventories are stated at the lower of cost and net realisable value.
The cost of work in progress and finished goods includes the cost of direct
raw materials and labour and an appropriate portion of fixed and variable
overhead expenses based on normal operating capacity but excludes borrowing
costs. The cost of raw materials is purchase cost valued using a first-in,
first-out basis.
Finished goods and work in progress inventories acquired as part of business
combinations is valued at fair value less cost to sell. Fair value is
estimated using a top down method, based on estimated product sales prices,
costs to complete and estimated selling/disposal costs.
Net realisable value represents the estimated selling price for inventories
less all estimated costs of completion and costs to sell.
Provisions are made to write down slow-moving, excess and obsolete items to
net realisable value, based on an assessment of technological and market
developments and on an analysis of historical and projected usage with regard
to quantities on hand.
Trade and other receivables (note 14)
Trade and other receivables are carried at original invoice or contract amount
less any provisions for discounts and expected credit losses (ECLs).
The Group applies a simplified approach in calculating ECLs. Receivables are
categorised by common risk characteristics that are representative of the
customers' abilities to pay all amounts due in accordance with the contractual
terms, including number of days past receivable due date. The expected loss
rates are calculated using the provision matrix approach. The provision matrix
is determined based on historical observed default rates over the expected
life of the receivables and is adjusted for forward-looking estimates.
Trade payables and accruals (note 15)
Trade payables and accruals principally comprise of amounts outstanding for
trade purchases and ongoing costs. These are recognised at the amounts
expected to be paid.
Leases (note 16)
The Group leases a range of assets including property, plant and equipment and
vehicles. The Group's lease liabilities are included in interest-bearing loans
and borrowings on the statement of financial position.
At the commencement date of the lease, the Group measures lease liabilities at
the present value of lease payments to be made over the lease term. The lease
payments include fixed payments (including in-substance fixed payments) less
any lease incentives receivable. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised by the Group and
payments of penalties for terminating a lease, if the lease term reflects the
Group exercising the option to terminate. Leases are measured to the end of
the lease term, including any extension options within Group control, unless
it is considered reasonably certain that the lease will be exited at an
earlier available break date.
In calculating the present value of lease payments, the Group uses its
incremental borrowing rate at the lease commencement date where the interest
rate implicit in the lease is not readily determinable.
Right-of-use assets are measured based on the value of corresponding lease
liability, plus any lease payments made at or before the commencement date,
less any lease incentives received, any initial direct costs, and any
provision for restoration costs.
The carrying amount of lease liabilities and right-of-use assets are
re-measured if there is a modification or reassessment of lease terms,
including a change in the contractual or assessed lease term, a change in the
lease payments or a change in the assessment of an option to purchase the
underlying asset.
Right-of-use assets are depreciated on a straight-line basis over the shorter
of their estimated useful life and the lease term.
Freehold buildings - up to 20 years
Plant and machinery - 3-6 years
Fixtures, fittings, tools, equipment and vehicles - 2-5 years
Depreciation charge is split between cost of sales and administrative expenses
based on estimated split of property usage between production and sales and
administrative functions.
The Group applies the short-term lease recognition exemption to its short-term
leases (i.e. those leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option). It also applies the
lease of low-value assets recognition exemption to leases that are considered
to be low value. Lease payments on short-term leases and leases of low-value
assets are recognised as expense on a straight-line basis over the lease term.
Derivative financial instruments (note 17)
The Group enters into derivative financial instruments to manage its exposure
to foreign exchange rate risk. Instruments used are principally foreign
exchange forward contracts. No derivative contracts have been designated as
hedges for accounting purposes.
Derivatives are initially recognised at fair value at the date a derivative
contract is entered into and are subsequently re-measured to their fair value
at the reporting date. The resulting gain or loss is immediately recognised in
the statement of comprehensive income.
Interest-bearing loans and borrowings (note 18)
Borrowings and other financial liabilities, including loans, are initially
measured at fair value, net of transaction costs.
Borrowings and other financial liabilities are subsequently measured at
amortised cost using the effective interest method. Finance cost includes the
amortisation of initial transaction costs as well as any interest payable
while the liability is outstanding.
Provisions for warranties and property dilapidations (note 19)
Provisions for warranties are made with reference to the warranty period,
recent trading history and historical warranty claim information, and the view
of management as to whether warranty claims are expected.
Dilapidation provisions relate to estimated contractual restoration costs
expected to be paid on exit of the lease, discounted to present value.
Deferred tax (note 21)
Deferred tax is recognised on all temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the
financial statements.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when the deferred tax assets and liabilities relate to income taxes levied
by the same taxation authority on either the same taxable entity or different
taxable entities and there is an intention to settle the balances on a net
basis.
The carrying amount of deferred tax assets is reviewed at each reporting date.
Deferred tax is charged or credited to other comprehensive income if it
relates to items that are charged or credited to other comprehensive income.
Similarly, deferred tax is charged or credited directly to equity if it
relates to items that are credited or charged directly to equity.
Management judgement is required to determine the amount of deferred tax
assets that can be recognised, based on the likely timing and level of future
taxable profits together with an assessment of the effect of future tax
planning strategies. Uncertainties exist with respect to the interpretation of
complex tax regulations, changes in tax laws and the amount and timing of
future taxable income.
Given the wide range of international business relationships and the long-term
nature and complexity of existing contractual agreements, differences arising
between the actual results and the assumptions made, or future changes to
such assumptions, could necessitate future adjustments to tax income and
expense already recorded.
Dividends paid and proposed (note 22)
Dividends are recognised when they meet the criteria for recognition as a
liability or when they are paid.
Share-based payments
Equity-settled transactions
The Group enters into equity-settled share-based payment transactions with its
employees, in particular as part of the Volution Long-term Incentive Plan.
The cost of equity-settled transactions is determined by the fair value at the
date when the grant is made using the valuation model and incorporates an
assessment of relevant performance conditions. The cost is recognised in
employee benefits expense, together with a corresponding increase in equity
(share-based payment reserve), over the vesting period in which the service
and performance conditions are fulfilled. The amount to be expensed over the
vesting period is adjusted at each balance sheet date to reflect the number of
awards for which conditions are expected to be met, such that the amount
ultimately recognised as an expense is based on the number of awards that meet
the conditions at the vesting date. The impact of the revision of original
estimates, if any, is recognised in the income statement with a corresponding
adjustment to equity.
Treasury shares
The treasury shares reserve represents the cost of shares in Volution Group
plc purchased in the market and held by the Volution Employee Benefit Trust to
satisfy obligations under the Group's share incentive schemes. Treasury shares
are recognised at cost and deducted from equity. No gain or loss is recognised
in profit or loss on the purchase, sale, issue or cancellation of the Group's
own equity instruments. Any difference between the carrying amount and the
consideration, if reissued, is recognised in share premium. Shares are
transferred out of treasury share reserve upon vesting of awards under share
incentive plans.
Capital reserve
The capital reserve is the difference in share capital and reserves arising
from the use of the pooling of interest method for preparation of the
financial statements in 2014. This is a non-distributable reserve.
Share-based payment reserve
The share-based payment reserve is used to recognise the value of
equity-settled share-based payments provided to key management personnel, as
part of their remuneration.
Foreign currency translation reserve
For the purpose of presenting consolidated financial information, the assets
and liabilities of the Group's foreign operations are expressed in GBP using
exchange rates prevailing at the end of the reporting period. Income and
expenses are translated at the average exchange rate for the period. Exchange
differences arising are classified as other comprehensive income and are
transferred to the foreign currency translation reserve. All other translation
differences are taken to profit and loss with the exception of differences on
foreign currency borrowings to the extent that they are used to finance or
provide a hedge against Group equity investments in foreign operations, in
which case they are taken to other comprehensive income together with the
exchange difference on the net investment in these operations.
New standards or interpretations
The standards or interpretations listed below have become effective since 1
August 2024 for annual periods beginning on or after 1 January 2024 and had no
material impact on these consolidated financial statements:
· Amendments to IAS 1 'Classification of liabilities as current or
non-current';
· Amendments to IFRS 16 'Lease liability in a sale and leaseback';
· Amendments to IAS 1 'Non-current liabilities with covenants'; and
· Amendments to IAS 7 'Supplier finance arrangements'.
The segment analysis reporting disclosures in note 4 have been updated
retrospectively following the July 2024 IFRIC agenda decision on IFRS 8
Segment reporting to include disclosure of material costs, being cost of
sales, included within profit measures reported to the Chief Operating
Decision-Maker.
At the date of authorisation of these consolidated financial statements, the
Group has not early adopted the following new and revised IFRS Standards that
have been issued but are not yet effective.
The following amendments become effective after 1 January 2027:
· Amendments to IFRS 18 'Presentation and disclosure in financial
statements'.
The Directors do not expect that the adoption of the Standards listed above
will have a material impact on the consolidated financial statements of the
Group in future periods.
2. Adjusted earnings
The Board and key management use some Alternative Performance Measures (APMs)
to track and assess the underlying performance of the business. These
measures include adjusted operating profit and adjusted profit before tax.
These measures are deemed helpful as they remove items that do not reflect the
day-to-day trading operations of the business and therefore their exclusion is
relevant to an assessment of the day-to-day trading operations, as opposed to
overall annual business performance. Such alternative performance measures are
not defined terms under IFRS and may not be comparable with similar measures
disclosed by other companies. Likewise, these measures are not a substitute
for IFRS measures of profit. A reconciliation of these measures of performance
to the corresponding reported figure is shown below. For definitions of terms
referred to see note 24.
2025 2024
£000
£000
Profit after tax 41,533 42,797
Add back:
Fair value movement in contingent consideration (note 17) 4,702 (1,845)
Cost of business combinations (note 12) 3,138 206
Unwinding of discounting on future consideration (note 17) 3,176 6,599
Amortisation of acquired inventory fair value adjustment (note 15) 7,048 -
Net loss/(gain) on financial instruments at fair value (note 5) 19 (144)
Amortisation of intangible assets acquired through business combinations (note 11,335 9,322
11)
Tax effect of the above (5,341) (1,664)
Adjusted profit after tax 65,610 55,271
Add back:
Adjusted tax charge 18,290 15,437
Adjusted profit before tax 83,900 70,708
Add back:
Interest payable on bank loans, lease liabilities and amortisation of 9,385 6,605
financing costs (note 5)
Re-measurement of financial liabilities (note 17) 455 870
Finance income (note 5) (306) (139)
Adjusted operating profit 93,434 78,044
Add back:
Depreciation of property, plant and equipment (note 8) 4,652 4,413
Depreciation of right-of-use assets (note 16) 6,070 4,738
Amortisation of development costs, software and patents (note 11) 2,205 1,807
Adjusted EBITDA 106,361 89,002
3. Revenue from contracts with customers
Revenue recognised in the statement of comprehensive income is analysed below:
2025 2024
£000 £000
Sale of goods 413,989 341,207
Installation services 5,125 6,404
Total revenue from contracts with customers 419,114 347,611
Market sectors 2025 2024
£000
£000
UK
Residential 115,196 105,039
Commercial 30,091 28,158
Export 15,691 12,130
OEM 15,132 15,448
Total UK 176,110 160,775
Nordics 45,984 47,376
Central Europe 90,638 87,016
Total Continental Europe 136,622 134,392
Total Australasia(1) 106,382 52,444
Total revenue from contracts with customers 419,114 347,611
Refund liabilities 2025 2024
£000
£000
Arising from retrospective volume rebates 12,268 10,264
Arising from rights of return 538 583
Refund liabilities 12,806 10,847
Notes
1. Included in the Australasia revenue is £56,234,000 of inorganic
revenue from the business combination of Fantech (2024: £7,801,000 of
inorganic revenue from the business combination of DVS).
Of the total rebates, approximately £5.6 million (2024: £4.1 million) is
non-coterminous with the year-end and is based on actual revenue recorded to
31 July 2025 and an estimate of the total revenue for the rebate period.
Geographic information
The Group operates in several geographical locations and sells on to external
customers in all parts of the world. No individual country amounts to more
than 5% of revenue, other than those noted below.
The following is an analysis of revenue from continuing operations by
geographical destination:
Revenue from external customers by customer destination 2025 2024
£000
£000
United Kingdom 155,073 142,231
Germany 18,942 18,919
Netherlands 32,703 24,978
Sweden 22,305 26,134
Australia 74,580 25,048
New Zealand 31,673 27,698
Rest of the world 83,838 82,603
Total revenue from contracts with customers 419,114 347,611
Information about major customers
Annual revenue from no individual customer accounts for more than 10% of Group
revenue in either the current or prior year.
4. Segmental analysis
The Group's reportable segments are described below. The segmental regional
structure reflects the current internal reporting provided to the Chief
Operating Decision-Maker (considered to be the CEO of the Group) on a regular
basis.
The segmental results include an allocation of central head office costs,
where the costs are attributable to a segment. Costs of running the parent
company are reported separately as central costs.
Year ended 31 July 2025 UK Continental Australasia Eliminations/ Total
£000 Europe £000 central costs £000
£000 £000
Revenue from contracts with external customers 176,110 136,622 106,3821 - 419,114
Cost of sales (excluding amortisation of acquired inventory fair value (82,959) (66,459) (57,030) - (206,448)
adjustment)
Adjusted segment EBITDA 50,783 36,814 25,259 (6,495) 106,361
Depreciation and amortisation of development costs, software and patents (4,917) (3,952) (3,380) (678) (12,927)
Adjusted operating profit/(loss) 45,866 32,862 21,879 (7,173) 93,434
Amortisation of intangible assets acquired through business combinations (1,882) (5,587) (3,866) - (11,335)
Amortisation of acquired inventory fair value adjustment - - (7,048) - (7,048)
Fair value movement on contingent consideration (4,702) (4,702)
Business combination-related operating costs - - - (3,138) (3,138)
Operating profit/(loss) 43,984 27,275 10,965 (15,013) 67,211
Unallocated expenses
Net finance cost - - - (9,098) (9,098)
Unwinding of discounting on future consideration - - - (3,176) (3,176)
Re-measurement of financial liabilities - - - (455) (455)
Profit/(loss) before tax 43,984 27,275 10,965 (27,742) 54,482
Year ended 31 July 2024 UK Continental Australasia Eliminations/ Total
£000 Europe £000 central costs £000
£000 £000
Revenue from contracts with external customers 160,775 134,392 52,4441 - 347,611
Cost of sales (78,672) (65,932) (24,740) - (169,344)
Adjusted segment EBITDA 45,161 35,859 13,458 (5,476) 89,002
Depreciation and amortisation of development costs, software and patents (4,956) (3,801) (1,534) (667) (10,958)
Adjusted operating profit/(loss) 40,205 32,058 11,924 (6,143) 78,044
Amortisation of intangible assets acquired through business combinations (5,634) (2,895) (793) - (9,322)
Fair value movement on contingent consideration - - - 1,845 1,845
Business combination-related operating costs - - - (206) (206)
Operating profit/(loss) 34,571 29,163 11,131 (4,504) 70,361
Unallocated expenses
Net finance income/(cost) - - 24 (6,346) (6,322)
Unwinding of discounting on future consideration - - - (6,599) (6,599)
Re-measurement of financial liabilities - - - (870) (870)
Profit/(loss) before tax 34,571 29,163 11,155 (18,319) 56,570
Note
1. Included in the Australasia revenue is £56,234,000 of inorganic
revenue from the business combination of Fantech (2024: £7,801,000 of
inorganic revenue from the business combination of DVS).
Non-current asset information
The non-current assets are disclosed below based on the Group's CGU groups:
Non-current assets excluding deferred tax 2025 2024
£000 £000
United Kingdom 111,874 112,515
Europe (excluding United Kingdom and Nordics) 109,396 109,560
Nordics 30,181 30,274
Australasia 183,131 50,980
Total 434,582 303,329
5. Finance income and costs
2025 2024
£000 £000
Finance income
Net gain on financial instruments at fair value - 144
Interest receivable 306 139
Total finance income 306 283
Finance costs
Net loss on financial instruments at fair value (19) -
Interest payable on bank loans (7,373) (4,427)
Amortisation of finance arrangement costs (488) (692)
Lease interest (1,256) (763)
Other interest (268) (723)
Total finance costs (9,404) (6,605)
Net finance costs (9,098) (6,322)
6. Income tax
(a) Income tax charges against profit for the year
2025 2024
£000 £000
Current income tax
Current UK income tax expense 6,623 5,571
Current foreign income tax expense 11,719 10,278
Tax credit relating to the prior year (803) (80)
Total current tax 17,539 15,769
Deferred tax
Origination and reversal of temporary differences (5,044) (2,224)
Effect of changes in the tax rate (134) 58
Tax charge relating to the prior year 588 170
Total deferred tax (4,590) (1,996)
Net tax charge reported in the consolidated statement of comprehensive income 12,949 13,773
(b) Income tax recognised in equity for the year
2025 2024
£000 £000
(Increase)/decrease in deferred tax asset on share-based payments (514) 380
Translation differences 121 (212)
Net tax (credit)/charge reported in equity (393) 168
(c) Reconciliation of total tax
2025 2024
£000 £000
Profit before tax 54,482 56,570
Profit before tax multiplied by the standard rate of corporation 13,621 14,143
tax in the UK of 25.00% (2024: 25.00%)
Adjustment in respect of previous years (215) 89
Expenses not deductible for tax purposes 781 2,738
Effect of changes in the tax rate (134) 58
Effect of overseas tax rates 875 (931)
Patent-related tax relief (930) (719)
Share exercise (1,163) (1,407)
Other 114 (198)
Net tax charge reported in the consolidated statement of comprehensive income 12,949 13,773
Our reported effective tax rate for the period was 23.8% (2024: 24.4%). Our
underlying effective tax rate, on adjusted profit before tax, was 21.8% (2024:
21.8%).
The effect of overseas tax rates relates to the Group's profits from
subsidiaries which are subject to tax jurisdictions with a blended lower
average rate of tax compared to the standard rate of corporation tax in the
UK.
We expect our medium-term reported effective tax rate to be in the range of
29% to 35% of the Group's reported profit before tax and our underlying
effective tax rate to be in the range of 22% to 25% of the Group's adjusted
profit before tax.
In June 2023, the UK Government substantively enacted legislation introducing
a global minimum corporate income tax rate, to have effect from 2024 in line
with the OECD's Pillar Two model framework on large multinational enterprises
with a consolidated group revenue of €750 million plus. The Group has
performed an assessment of its potential exposure to Pillar Two income taxes
and based on an assessment of the most recent information available regarding
the financial performance of the constituent entities in the Group, we do not
expect to be within the scope of Pillar Two and therefore do not expect it to
have a material impact on the Group's tax rate or tax payments.
7. Earnings per share (EPS)
The following reflects the income and share data used in the basic and diluted
earnings per share computations:
2025 2024
£000 £000
Statutory profit attributable to ordinary equity holders 41,533 42,797
Adjusted profit attributable to ordinary equity holders 65,610 55,271
Number Number
Weighted average number of ordinary shares for basic earnings per share 197,962,762 197,739,417
Effect of dilution from:
Share options 2,712,502 2,143,783
Weighted average number of ordinary shares for diluted earnings per share 200,675,264 199,883,200
Earnings per share
Basic 21.0p 21.6p
Diluted 20.7p 21.4p
Adjusted earnings per share
Basic 33.1p 28.0p
Diluted 32.7p 27.6p
The weighted average number of ordinary shares has increased as a result of a
reduction in the treasury shares held by the Volution Employee Benefit Trust
(EBT) during the year. The shares are excluded when calculating the reported
and adjusted EPS.
Adjusted profit attributable to ordinary equity holders has been reconciled in
note 2, Adjusted earnings. See note 24, Glossary of terms, for an explanation
of the adjusted basic and diluted earnings per share calculation.
8. Property, plant and equipment
2025 Freehold land Plant and Fixtures, Total
and buildings machinery fittings, tools, £000
£000 £000 equipment
and vehicles
£000
Cost
At 1 August 2023 18,009 19,440 14,080 51,529
On business combinations 31 88 66 185
Additions 423 1,561 3,424 5,408
Disposals (12) (242) (1,283) (1,537)
Net foreign currency exchange differences (164) (137) (183) (484)
At 31 July 2024 18,287 20,710 16,104 55,101
On business combinations - 794 627 1,421
Additions 1,220 1,995 3,353 6,568
Transfer from leased assets - - 504 504
Disposals (78) (839) (2,294) (3,211)
Net foreign currency exchange differences 367 192 329 888
At 31 July 2025 19,796 22,852 18,623 61,271
Accumulated depreciation
At 1 August 2023 5,436 7,859 8,786 22,081
Charge for the year 526 1,906 1,981 4,413
Disposals (12) (241) (1,107) (1,360)
Net foreign currency exchange differences (44) (22) (160) (226)
At 31 July 2024 5,906 9,502 9,500 24,908
Charge for the year 555 1,934 2,163 4,652
Transfer from leased assets - - 224 224
Disposals (78) (778) (2,171) (3,027)
Net foreign currency exchange differences 110 209 185 504
At 31 July 2025 6,493 10,867 9,901 27,261
Net book value
At 31 July 2024 12,381 11,208 6,604 30,193
At 31 July 2025 13,303 11,985 8,722 34,010
9. Intangible assets - goodwill
Goodwill £000
Cost and net book value
At 1 August 2023 168,988
On the business combination of DVS 5,037
Net foreign currency exchange differences (2,685)
At 31 July 2024 171,340
On the business combination of Fantech 66,621
Net foreign currency exchange differences (2,176)
At 31 July 2025 235,785
10. Impairment assessment of goodwill
31 July 2025 UK Nordics Central Australasia
Europe
£000 £000
£000
£000
Carrying value of goodwill 61,000 18,985 64,277 91,523
CGU value-in-use headroom(1) 332,851 115,035 104,391 44,889
31 July 2024 UK Nordics Central Australasia
£000
Europe
£000
£000
£000
Carrying value of goodwill 61,000 18,151 62,827 29,362
CGU value-in-use headroom(1) 249,557 49,409 66,028 45,101
Note:
1. Headroom is shown at the date of impairment testing, and is
calculated by comparing the value-in-use of a group of CGUs to the carrying
amount of its asset, which includes the net book value of fixed assets
(tangible and intangible), goodwill and operating working capital (current
assets and liabilities).
Impairment review
Under IAS 36 'Impairment of assets', the Group is required to complete an
impairment review of goodwill at least annually. The recoverable amounts for
each CGU group are based on value-in-use, which has been derived from
discounted cash flow (DCF) calculations.
The value-in-use headroom for each CGU group has been set out above; in all
CGUs it was concluded that the carrying amount was in excess of the
value-in-use and all CGUs had positive headroom.
When assessing for impairment of goodwill, we have considered the impact of
climate change, particularly in the context of the risks and opportunities
identified in the TCFD disclosure in the Annual Report. We have not identified
any material short-term and medium-term impacts from climate change that would
impact the carrying value of goodwill. Over the long term, the risks and
opportunities are more uncertain and we will continue to assess these risks at
each reporting period.
Assumptions in the value-in-use calculation
· The calculation of value-in-use for all CGUs is most sensitive to the
following assumptions:
· cash flow projections based on financial budgets approved by the Board
covering the next financial period;
· cash flows beyond the budget period are extrapolated over years 2-5 using
specific growth rates. Growth rates for each of the CGU groups are based on
historical growth rates, market expectations and the stated Group strategic
goals;
· long-term growth rates of 2% (2024: 2%) for all CGUs have been applied to
the period beyond which budgets and forecasts do not exist, based on
historical macroeconomic performance and projections for the geographies in
which the CGUs operate; and
· discount rates are calculated based on the CGU weighted average cost of
capital and reflects the current market assessment of the risks specific to
each operation. The pre-tax discount rates used for each CGU are:
· UK 13.5% (2024: 13.5%);
· Nordics: 11.3% (2024: 12.2%);
· Central Europe: 13.4% (2024: 12.4%); and
· Australasia: 14.3% (2024: 15.0%).
Australasia headroom has decreased as a proportion of the carrying value of
Australasia goodwill due to the sizeable acquisition of Fantech, where assets
and liabilities acquired were measured at fair value at the date of
acquisition (note 12). Therefore, carrying value of Fantech net assets as at
31 July 2025 remains reasonably equivalent to their fair value.
We have tested the sensitivity of our headroom calculations in relation to the
above assumptions, including severe performance downside scenarios aligned
with the Group going concern assessment, and the Group does not consider that
reasonably possible changes in these assumptions could cause the carrying
value of the CGUs to materially exceed their recoverable value.
11. Intangible assets - other
2025 Development Software Customer Trademarks Patents/ Other Total
costs costs base £000 technology £000 £000
£000 £000 £000 £000
Cost
At 1 August 2023 as previously stated 12,732 10,277 160,841 55,260 3,417 1,163 243,690
Reclassification of brought forward balances* - 184 1,301 2,488 80 (207) 3,846
At 1 August 2023 reclassified 12,732 10,461 162,142 57,748 3,497 956 247,536
Additions 1,578 318 - - - - 1,896
On business combinations - 35 1,667 2,309 - - 4,011
Disposals (21) (75) (84) - - - (180)
Net foreign currency exchange differences (288) 176 (1,544) (554) (61) - (2,271)
At 31 July 2024 reclassified 14,001 10,915 162,181 59,503 3,436 956 250,992
Additions 1,619 437 - - - - 2,056
On business combinations - 74 41,058 21,603 - - 62,735
Disposals (49) (756) - - - (956) (1,761)
Net foreign currency exchange differences 264 (98) (668) (518) 60 - (960)
At 31 July 2025 15,835 10,572 202,571 80,588 3,496 - 313,062
Accumulated amortisation
At 1 August 2023 as previously stated 3,266 7,158 118,929 27,132 2,179 1,163 159,827
Reclassification of brought forward balances* - 159 7,656 (4,086) 324 (207) 3,846
At 1 August 2023 reclassified 3,266 7,317 126,585 23,046 2,503 956 163,673
Charge for the year 847 1,035 6,333 2,718 196 - 11,129
Disposals (21) (75) - - - - (96)
Net foreign currency exchange differences (186) 8 (17) (361) (60) - (616)
At 31 July 2024 reclassified 3,906 8,285 132,901 25,403 2,639 956 174,090
Charge for the year 1,145 1,060 7,424 3,712 199 - 13,540
Disposals (49) (756) - - - (956) (1,761)
Net foreign currency exchange differences 420 120 1,130 310 (33) - 1,947
At 31 July 2025 5,422 8,709 141,455 29,425 2,805 - 187,816
Net book value
At 31 July 2024 reclassified 10,095 2,630 29,280 34,100 797 - 76,902
At 31 July 2025 10,413 1,863 61,116 51,163 691 - 125,246
* The brought forward balances have been reclassified between
asset categories to correct a historical misallocation of movements. There is
no impact on total intangible asset value brought forward or on the prior year
income statement.
The Group has the following individually material intangible assets with
definite useful lives:
Carrying Remaining
amount amortisation period
2025 2025
£000 Years
Customer base
Simx Limited 4,481 8
ClimaRad BV 6,694 3
ERI 8,021 6
Fantech 37,249 14
Trademark
Volution Holdings Limited and its subsidiaries 14,327 12
Fantech 19,959 24
12. Business combinations
Business combinations in the year ended 31 July 2025
Fantech
On 29 November 2024, Volution Group acquired Fantech, a market leading
position in commercial and residential ventilation in Australasia. The
acquisition of Fantech is in line with the Group's strategy to grow by
selectively acquired value-adding businesses in new and existing markets and
geographies.
Total consideration for the purchase of Fantech is AUD$281 million (£142.3
million), with initial consideration of AUD$221 million (£112.7million) on a
debt-free, cash-free basis, with further non-contingent consideration of
AUD$60 million (£29.6 million) payable 12 months after the completion date.
Transaction costs relating to professional fees associated with the business
combination in the period ending 31 January 2025 were £2,376,000 and have
been expensed as cost of business combinations separately disclosed on the
face of the consolidated statement of comprehensive income above operating
profit.
The fair values of the acquired assets and liabilities recognised in our
financial statements are provisional, as they are based on the information
available at the acquisition date; adjustments may be required if additional
relevant information becomes available within the measurement period, which
extends up to 12 months from the acquisition date.
The fair value of the net assets acquired is set out below:
Book Fair value Fair
value adjustments value
£000 £000 £000
Intangible assets 1,127 61,608 62,735
Property, plant and equipment 1,421 - 1,421
Right of use assets 11,654 1,065 12,719
Inventory 19,648 5,078 24,726
Trade and other receivables 15,462 - 15,462
Trade and other payables (13,406) - (13,406)
Lease liabilities (14,362) 1,448 (12,914)
Income tax (684) - (684)
Provisions (186) - (186)
Deferred tax 1,069 (20,601) (19,532)
Cash and cash equivalents 5,370 - 5,370
Total identifiable net assets 27,113 48,598 75,711
Goodwill on the business combination 66,621
Discharged by:
Cash consideration 112,728
Deferred consideration 29,604
Goodwill of £66,621,000 reflects certain intangibles that cannot be
individually separated and reliably measured due to their nature. These items
include the value of expected synergies arising from the business combination
and the experience and skill of the acquired workforce.
The fair value of the acquired tradenames and customer relationships was
identified and included in intangible assets.
Assumptions in the intangibles valuation calculation
The valuation of Fantech acquired intangible assets involve a number of
estimates and assumptions. Customer relationships was valued using the
multi-period excess earnings method and tradename using a relief from royalty
method. These estimates are inherently uncertain and changes in these
assumptions could materially impact the carrying values of intangible assets,
goodwill and amortisation expenses.
Key inputs where reasonably possible changes would materially impact the
valuation of Fantech intangibles are:
· Discount rate 13.2%;
· Royalty rate (tradename only) between 0.5% and 4%;
· Attrition rate (customer relationships only) 6.7%; and
· Contributory asset charges (customer relationships only) 4.5%.
An increase of 1% to the discount rate would reduce intangibles valuation by
£3.6 million; a decrease of 1% would increase the valuation by £4.0 million.
A change of 1% in royalty rate would change the valuation of trademarks by
£6.1 million.
An increase of 1% to the attrition rate would decrease the customer
relationships asset valuation by £4.5 million; a decrease of 1% would
increase the value by £4.9 million.
An increase of 1% to the contributory asset charges would decrease the
customer relationships asset valuation by £4.8 million; a decrease of 1%
would increase the value by £4.3 million.
The gross amount of trade and other receivables is £15,462,000. All of the
trade receivables are expected to be collected in full.
Inventories recorded on the business combination were recognised at fair
value. The fair value uplift for inventory included an additional obsolescence
provision of £1,970,000 and an unrealised profit uplift of £7,048,000. The
fair value uplift has been released to gross profit over a period of four
months from the date of acquisition, reflecting the expected period of sale of
the uplifted inventory.
Fantech generated revenue of £64,042,000 and generated a profit after tax of
£4,980,000 in the period from acquisition to 31 July 2025.
If the combination had taken place at 1 August 2024, the Group's revenue would
have been £29,650,000 higher and profit before tax from continuing operations
would have been £5,030,000 higher than reported.
Business combinations in the year ended 31 July 2024
DVS
On 4 August 2023, Volution Group acquired the trade and assets of Proven
Systems Limited (DVS), a market leading supplier and installer of home
ventilation solutions in New Zealand. The acquisition of DVS is in line with
the Group's strategy to grow by selectively acquired value-adding businesses
in new and existing markets and geographies.
Total consideration for the purchase of the trade and assets of DVS was £8.5
million (NZ$17.7 million), net of cash acquired, with further contingent cash
consideration of up to NZ$9 million based on stretching targets for the
financial results for the 12 months ended 3 August 2024 and the 12 months
ended 31 March 2026. Contingent consideration was assessed at the time of
acquisition based on the current estimate of the future performance of the
business for the 12 months ended 3 August 2024 as £nil, with NZ$3 million
payable if EBITDA exceeds NZ$3 million, and for the 12 months ended 31 March
2026 as NZ$nil with a range of NZ$nil to NZ$9 million based on EBITDA
performance from NZ$3.5 million to NZ$4 million.
The fair value of contingent consideration is calculated by estimating the
future cash flows for the company based on management's knowledge of the
business and how the current economic environment is likely to impact
performance. If acquisition date EBITDA estimates for each period for which
contingent consideration is measured was 10% higher than expected, contingent
consideration would remain £nil at acquisition. Subsequent valuations of
contingent consideration do not impact acquisition accounting; refer to note
17 for further detail as to the year-end fair value assessment.
Transaction costs relating to professional fees associated with the business
combination in the year ending 31 July 2024 were £31,000 and have been
expensed as cost of business combinations separately disclosed on the face of
the consolidated statement of comprehensive income above operating profit.
The fair value of the net assets acquired is set out below:
Book Fair value Fair
value adjustments value
£000 £000 £000
Intangible assets 35 3,976 4,011
Property, plant and equipment 185 - 185
Inventory 875 - 875
Trade and other receivables 130 - 130
Trade and other payables (627) - (627)
Deferred tax liabilities - (1,113) (1,113)
Total identifiable net assets 598 2,863 3,461
Goodwill on the business combination 5,037
Discharged by:
Cash consideration 8,498
Goodwill of £5,037,000 reflects certain intangibles that cannot be
individually separated and reliably measured due to their nature. These items
include the value of expected synergies arising from the business combination
and the experience and skill of the acquired workforce. The fair value of the
acquired tradename and customer base was identified and included in intangible
assets.
DVS generated revenue of £7,801,000 and generated a profit after tax of
£280,000 in the period from acquisition to 31 July 2024. If the combination
had taken place at 1 August 2023, the Group's revenue and profit before tax
would have been materially the same as reported, as the acquisition took place
on 4 August 2023.
Business combination cash outflows
Cash outflows arising from completed acquisitions are as follows:
2025 2024
£000 £000
Fantech
Cash consideration 112,728 -
Less cash acquired with the business (5,370) -
ClimaRad
Contingent consideration 20,853 -
DVS
Cash consideration - 8,498
I-Vent
Contingent consideration - 2,566
ERI
Deferred payment - 1,874
Contingent consideration 4,580 -
Total 132,791 12,938
Cash outflows arising from cost of business combinations are as follows:
2025 2024
£000 £000
Fantech 2,376 -
ClimaRad 56 -
VMI - 35
I-Vent - 45
DVS - 31
Other potential or aborted business combinations 706 95
Total 3,138 206
13. Inventories
2025 2024
£000 £000
Raw materials and consumables 25,316 25,231
Work in progress 2,406 2,257
Finished goods and goods for resale 43,572 25,624
71,294 53,112
During 2025, £1,460,000 (2024: £1,320,000) was recognised as cost of sales
for inventories written off in the year.
Inventories are stated net of an allowance for excess, obsolete or slow-moving
items which totalled £8,633,000 (2024: £5,855,000). This provision was split
amongst the three categories: £5,697,000 (2024: £3,363,000) for raw
materials and consumables; £178,000 (2024: £195,000) for work in progress;
and £2,758,000 (2024: £2,297,000) for finished goods and goods for resale.
14. Trade and other receivables
2025 2024
£000 £000
Trade receivables 68,620 45,694
Allowance for expected credit loss (400) (514)
68,220 45,180
Other debtors 2,078 5,532
Prepayments 7,092 4,527
Total 77,390 55,239
Movement in the allowance for expected credit losses is set out below:
2025 2024
£000 £000
At the start of the year (514) (521)
On business combinations (55) -
Credit/(charge) for the year 154 (22)
Amounts utilised 20 32
Foreign currency adjustment (5) (3)
At the end of the year (400) (514)
Net trade receivables are aged as follows:
2025 2024
£000 £000
Current 58,150 41,711
Past due
Overdue 0-30 days 7,985 2,123
Overdue 31-60 days 1,151 465
Overdue 61-90 days 240 74
Overdue more than 90 days 694 807
Total 68,220 45,180
The credit quality of trade receivables that are neither past due nor impaired
is assessed by reference to external credit ratings where available;
otherwise, historical information relating to counterparty default rates are
used. The Group continually assesses the recoverability of trade receivables
and the level of provisioning required.
Trade receivables are non-interest bearing and are generally on terms of 30 to
90 days.
Gross trade receivables are denominated in the following currencies:
2025 2024
£000 £000
Sterling 27,994 24,466
US Dollar 1,227 926
Euro 12,091 9,216
Swedish Krona 3,289 2,830
New Zealand Dollar 4,635 2,720
Australian Dollar 18,103 4,029
Other 1,281 1,507
Total 68,620 45,694
15. Trade and other payables
2025 2024
£000 £000
Trade payables 39,821 21,224
Social security and staff welfare costs 2,031 2,030
Sales tax payable 5,797 4,940
Accrued expenses 24,090 18,459
Total 71,739 46,653
Trade payables are non-interest bearing and are normally settled on 60-day
terms.
The presentation of sales tax payable has been updated in the current year,
having been included within accrued expenses in the previous financial
statements.
16. Leases
Right-of-use assets Land and Plant and Fixtures, Total
buildings machinery fittings, tools, £000
£000 £000 equipment
and vehicles
£000
Cost
At 1 August 2023 36,741 66 4,683 41,490
Additions 897 - 776 1,673
Modifications and other (790) - - (790)
Expiration and disposal of leases (869) (29) (535) (1,433)
Net foreign currency exchange differences (893) (6) (259) (1,158)
At 31 July 2024 35,086 31 4,665 39,782
Additions 1,665 77 1,075 2,817
On business combinations 12,052 264 403 12,719
Modifications and other 6,619 - 2 6,621
Expiration and disposal of leases (5,251) (7) (341) (5,599)
Transferred to owned assets - - (504) (504)
Net foreign currency exchange differences (586) (15) 36 (565)
At 31 July 2025 49,585 350 5,336 55,271
Accumulated depreciation
At 1 August 2023 9,737 31 1,820 11,588
Charge for the period 3,881 13 844 4,738
Expiration and disposal of leases (869) (29) (535) (1,433)
Net foreign currency exchange differences (33) (2) 30 (5)
At 31 July 2024 12,716 13 2,159 14,888
Charge for the period 5,001 51 1,018 6,070
Expiration and disposal of leases (4,897) (7) (293) (5,197)
Transferred to owned assets - - (224) (224)
Net foreign currency exchange differences (185) 1 (31) (215)
At 31 July 2025 12,635 58 2,629 15,322
Net book value
At 31 July 2024 22,370 18 2,506 24,894
At 31 July 2025 36,950 292 2,707 39,949
Lease liabilities Land and Plant and Fixtures, Total
2025 buildings machinery fittings, tools, £000
£000 £000 equipment
and vehicles
£000
At 1 August 2023 29,174 33 2,001 31,208
Additions 897 - 776 1,673
Modifications and other (790) - - (790)
Interest expense 721 2 40 763
Lease payments (4,516) (15) (1,141) (5,672)
Foreign exchange movements (859) (4) (290) (1,153)
At 31 July 2024 24,627 16 1,386 26,029
Additions 1,665 77 1,075 2,817
On business combinations 12,052 277 585 12,914
Modifications and other 4,531 - 2 4,533
Disposal (295) - - (295)
Interest expense 1,134 16 106 1,256
Lease payments (5,826) (93) (1,286) (7,205)
Foreign exchange movements (418) (13) 87 (344)
At 31 July 2025 37,470 280 1,955 39,705
Analysis
Current 3,522 8 1,228 4,758
Non-current 21,105 8 158 21,271
At 31 July 2024 24,627 16 1,386 26,029
Current 5,321 97 978 6,396
Non-current 32,149 183 977 33,309
At 31 July 2025 37,470 280 1,955 39,705
The following are amounts recognised in the statement of comprehensive income:
2025 2024
£000 £000
Right-of-use asset depreciation charged to cost of sales 3,593 2,904
Right-of-use asset depreciation charged to administrative expenses 2,477 1,834
Interest expense 1,256 763
17. Other financial liabilities
2025 Foreign Deferred consideration Contingent Contingent Contingent Total
exchange Fantech consideration consideration consideration £000
forward £000 DVS ClimaRad ERI
contracts £000 BV £000
£000 £000
At 1 August 2024 192 - - 16,346 5,530 22,068
Additional liabilities - 29,604 - - - 29,604
Re-measurement of financial liabilities - - - 455 - 455
Fair value movement - - 2,572 2,023 107 4,702
Unwinding of discount - 749 - 1,998 429 3,176
Consideration paid - - - (20,853) (4,580) (25,433)
Fair value adjustment 19 - - - - 19
Foreign exchange 4 (1,543) - 31 14 (1,494)
At 31 July 2025 215 28,810 2,572 - 1,500 33,097
Analysis
Current 215 28,810 2,572 - - 31,597
Non-current - - - - 1,500 1,500
Total 215 28,810 2,572 - 1,500 33,097
2024 Foreign Contingent Contingent Contingent Total
exchange consideration consideration consideration £000
forward ClimaRad I-Vent ERI
contracts BV £000 £000
£000 £000
At 1 August 2023 330 8,877 4,115 7,720 21,042
Re-measurement of financial liabilities - 870 - - 870
Re-measurement of contingent consideration - 6,599 (1,529) (316) 4,754
Consideration paid - - (2,566) (1,874) (4,440)
Fair Value adjustment (138) - - - (138)
Foreign exchange - - (20) - (20)
At 31 July 2024 192 16,346 - 5,530 22,068
Analysis
Current 192 16,346 - 5,530 22,068
Non-current - - - - -
At 31 July 2024 192 16,346 - 5,530 22,068
Consideration liabilities
The fair value of contingent consideration is calculated by estimating the
future cash flows for the acquired company. These estimates are based on
management's knowledge of the business and how the current economic
environment is likely to impact performance. The relevant future cash flows
are dependent on the specific terms of the sale and purchase agreement. The
assessed contingent liability is discounted to present value using the
discount rates for the relevant CGU (note 10).
Fantech
The deferred consideration liability of £28,692,000, being AUD$60,000,000
(2024: nil) in relation to the current year acquisition has been updated since
the acquisition date value to reflect the unwinding of the discount amount to
present value and changes in foreign exchange rates between acquisition and
year-end. This amount is due to be paid in December 2025.
DVS
The fair value of DVS contingent consideration at 31 July 2025 was assessed as
£2,572,000, NZ$5.8 million (2024: £nil), being the estimated payment for the
earnout period for the year ending 31 March 2026. Contingent consideration for
this period ranges from NZ$0 to NZ$9 million based on an EBITDA range of
NZ$3.5 million - NZ$4.0 million. The expected payout has increased due to much
improved forecast EBITDA performance in the latter half of this financial
year, which is expected to be maintained throughout the remaining earnout
period and beyond. The maximum present value of DVS contingent consideration
is £4,000,000 and therefore there can be no material variation to the value
of the year-end liability as a result of fluctuations in EBITDA performance.
ERI
The contingent consideration at 31 July 2024 was assessed as £5,530,000, with
a range from €0 to €12,400,000, based on EBITDA performance from
€4,500,000 to €8,500,000 for year ended 31 December 2024. This earnout was
settled in the year.
In December 2024, the original contingent consideration from the acquisition
of ERI was extended to include a potential payment of €0 to €6,000,000
based on EBITDA performance for the year ending 31 December 2029, with the
threshold set at €10,000,000 and the maximum payable at €11,000,000. Based
on current expectations, a liability of £1,500,000 has been recognised based
on estimated EBITDA performance in the assessment period, discounted to
present value. The maximum present value of ERI contingent consideration is
£4,400,000 and therefore there can be no material variation to the value of
the year-end liability as a result of fluctuations in EBITDA performance.
I-Vent
On 22 June 2023, the Group acquired the entire share capital of I-Vent. The
share purchase agreement included contingent cash consideration based on the
estimated future performance for three years post-acquisition for a combined
total of up to €15,000,000. The contingent consideration at 31 July 2025
related to the acquisition of I-Vent remains at £nil (2024: £nil). The
performance target for the year ended 31 December 2024 was not met in the
year. The Group continues to expect that performance in the final assessment
year to fall below the earnout threshold. The year 3 contingent consideration
range is from €0 to €7,000,000 for the year ending 31 December 2025, based
on EBITDA performance from €5,280,000 to €7,500,000. There would be no
material variation to the value of the liability should EBITDA performance
vary by 10%.
ClimaRad
On 17 December 2020, the Group acquired 75% of the issued share capital of
ClimaRad Holding B.V. and subsidiaries (ClimaRad). Total consideration for the
purchase of 75% of the issued share capital was €41,100,000 (£37,100,000)
with a commitment to purchase the remaining 24.35% on or before 28 February
2025. The future consideration for the purchase of the remaining 24.35% was
set at 24.35% of 13 times the EBITDA of ClimaRad for the financial year ended
31 December 2024, plus the non-controlling interest share of profits earned in
the periods up to and including 31 December 2024, less interest and principal
on the Vendor loan already paid, subject to a cap of €100 million.
The contingent consideration and purchase of the remaining 24.35% was settled
in the year, with actual results being above the previous year estimate.
Therefore, the liability is nil as at 31 July 2025 (2024: £16,346,000
liability based on estimated EBITDA performance, discounted to present value).
Foreign exchange forward contract liabilities
The foreign exchange forward contracts are carried at their fair value with
the gain or loss being recognised in the Group's consolidated statement of
comprehensive income.
18. Interest-bearing loans and borrowings
2025 2024
Current Non-current Current Non-current
£000 £000 £000 £000
Unsecured - at amortised cost
Borrowings under the revolving credit facility (maturing 9 September 2027) - 144,730 - 49,794
Cost of arranging bank loan - (1,335) - -
- 143,395 - 49,794
Lease liabilities (note 16) 6,396 33,309 4,758 21,271
Other loans - 317 - 565
ClimaRad vendor loan - - 9,605 -
Total 6,396 177,021 14,363 71,630
Revolving credit facility - at 31 July 2025
Currency Amount Termination Repayment Rate %
outstanding date frequency
£000
GBP - 9 September 2027 One payment SONIA + margin%
Euro 65,997 9 September 2027 One payment EURIBOR + margin%
Australian Dollar 63,248 9 September 2027 One payment AUD-BBSY + margin%
Swedish Krona 15,485 9 September 2027 One payment STIBOR + margin%
Total 144,730
Revolving credit facility - at 31 July 2024
Currency Amount Termination Repayment Rate %
outstanding date frequency
£000
GBP - 2 December 2025 One payment SONIA + margin%
Euro 49,794 2 December 2025 One payment EURIBOR + margin%
Swedish Krona - 2 December 2025 One payment STIBOR + margin%
Total 49,794
The interest rate on borrowings includes a margin that is dependent on the
consolidated leverage level of the Group in respect of the most recently
completed reporting period. For the year ended 31 July 2025, Group leverage
was 1.2:1 and therefore the margin will remain at 1.50% from the rate at 31
January 2025. (31 July 2024: Group leverage was below 1.0:1 with the margin
at 1.25%).
The Group remained comfortably within its banking covenants, which are tested
semi-annually. As at 31 July 2025, the multiple of EBITDA to net finance
charges was 13.6 (31 July 2024: 14.8), against a covenant minimum ratio of
4.0, and the multiple of net borrowings to EBITDA (leverage) was 1.2 (31 July
2024: 0.4), against a covenant maximum ratio of 3.0.
On 10 September 2024, the Group refinanced its bank debt. The old facility was
repaid in full. The Group now has in place a £230 million multi-currency
'Sustainability Linked Revolving Credit Facility', together with an accordion
of up to £70 million. The facility was due to mature in September 2027, with
the option to extend for up to two additional years. In August 2025, the Group
took the option to extend its multi-currency 'Sustainability Linked Revolving
Credit Facility', together with an accordion of up to £70 million, by a
period of 12 months, revising the maturity date to September 2028 and the
maximum facility to £200 million.
At 31 July 2025, the Group had £85,270,000 (2024: £100,200,000) of its
multi-currency revolving credit facility unutilised, plus an unutilised
accordion of up to £70,000,000.
18. Interest-bearing loans and borrowings continued
Changes in liabilities arising from financing activities
1 August Cash flows Foreign New/ Interest payable 31 July
2024 £000 exchange other £000 2025
£000 movement £000 £000
£000
Non-current interest-bearing loans and borrowings (excluding lease 49,794 90,094 (3,211) (455) 7,173 143,395
liabilities)
Debt related to the business combination of VMI 565 (248) - - - 317
Lease liabilities 26,029 (7,205) (344) 19,969 1,256 39,705
ClimaRad vendor loan 9,605 (9,663) (142) - 200 -
Total liabilities from financing activities 85,993 72,978 (3,697) 19,514 8,629 183,417
The ClimaRad vendor loan was repaid in full in December 2024.
1 August Cash flows Foreign New/ Interest 31 July
other
2023 £000 exchange
£000 2024
£000
£000 movement £000
£000
Non-current interest-bearing loans and borrowings (excluding lease 79,369 (28,451) (1,124) - - 49,794
liabilities)
Debt related to the business combination of VMI 802 (237) - - - 565
Lease liabilities 31,208 (5,672) (1,153) 883 763 26,029
ClimaRad vendor loan 9,771 - (166) - - 9,605
Total liabilities from financing activities 121,150 (34,360) (2,443) 883 763 85,993
The ClimaRad vendor loan was at 5.0% fixed rate of interest.
19. Provisions
2025 Product Property Total
warranties dilapidations £000
£000 £000
At 1 August 2024 1,796 473 2,269
On business combinations 186 - 186
Arising during the year 1,684 256 1,940
Utilised (1,511) - (1,511)
Foreign currency adjustment (22) 1 (21)
At 31 July 2025 2,133 730 2,863
Analysis
Current 1,752 381 2,133
Non-current 381 349 730
Total 2,133 730 2,863
2024 Product Property Total
warranties dilapidations £000
£000 £000
At 1 August 2023 1,625 467 2,092
Arising during the year 1,869 6 1,875
Utilised (1,674) - (1,674)
Foreign currency adjustment (24) - (24)
At 31 July 2024 1,796 473 2,269
Analysis
Current 1,400 50 1,450
Non-current 396 423 819
Total 1,796 473 2,269
Product warranties
A provision is recognised for warranty costs expected to be incurred in the
following 12 months on products sold during the year and in prior years.
Product warranties are typically one to two years; however, based on
management's knowledge of the products, claims in relation to warranties after
more than 12 months are rare and highly immaterial.
20. Authorised and issued share capital and reserves
Number of Ordinary Share
ordinary shares issued and fully paid
shares premium
£000 £000
At 31 July 2024 and 31 July 2025 200,000,000 2,000 11,527
The 200,000,000 authorised ordinary shares of £0.01p each.
At 31 July 2025, a total of 2,012,770 (2024: 2,151,214) ordinary shares in
Volution Group plc were held by the Volution EBT, all of which were
unallocated and available for transfer to participants of the Long Term
Incentive Plan, Deferred Share Bonus Plan and Sharesave Plan on exercise.
During the year, 515,000 ordinary shares in Volution Group plc were purchased
by the trustees (2024: 700,000) and 653,444 (2024: 1,019,886) were released by
the trustees at £3,694,058 (2024: £3,942,724). The market value
of the shares at 31 July 2025 was £13,485,559 (2024: £11,767,140).
The Volution EBT has agreed to waive its rights to dividends.
21. Deferred tax liabilities
2025 1 August Charged/ Credited Translation On 31 July
2024 (credited) to equity difference business 2025
£000 to income £000 £000 combinations £000
£000 £000
Temporary differences
Depreciation in advance of capital allowances 2,832 258 - - - 3,090
Fair value movements of derivative financial instruments (71) - - - - (71)
Development costs, customer base, trademark and patents 14,228 (2,381) - (950) 18,821 29,718
Unutilised tax losses (28) 28 - - - -
Other temporary differences (1,316) (1,743) - 136 711 (2,212)
Share-based payments (3,023) (752) (514) - - (4,289)
Deferred tax liabilities 12,622 (4,590) (514) (814) 19,532 26,236
2024 1 August Charged/ Charge Translation On 31 July
2023 (credited) to equity difference business 2024
£000 to income £000 £000 combinations £000
£000 £000
Temporary differences
Depreciation in advance of capital allowances 2,896 (64) - - - 2,832
Fair value movements of derivative financial instruments (123) 52 - - - (71)
Development costs, customer base, trademark and patents 15,147 (1,816) - (216) 1,113 14,228
Unutilised tax losses (1) (27) - - - (28)
Other temporary differences (1,275) (45) - 4 - (1,316)
Share-based payments (3,307) (96) 380 - - (3,023)
Deferred tax liabilities 13,337 (1,996) 380 (212) 1,113 12,622
At 31 July 2025, the Group had not recognised a deferred tax asset in respect
of gross tax losses of £5,195,000 (2024: £5,195,000) relating to management
expenses, capital losses of £4,098,000 (2024: £4,098,000) arising in UK
subsidiaries and overseas gross tax losses of £nil (2024: £nil), as there is
insufficient evidence that the losses will be utilised. These losses are
available to be carried indefinitely.
At 31 July 2025, the Group had no deferred tax liability (2024: £nil) to
recognise for taxes that would be payable on the remittance of certain of the
Group's overseas subsidiaries' unremitted earnings. Deferred tax liabilities
have not been recognised as the Group has determined that there are no
undistributed profits in overseas subsidiaries where an additional tax charge
would arise on distribution.
22. Dividends paid and proposed
2025 2024
£000 £000
Cash dividends on ordinary shares declared and paid
Interim dividend for 2025: 3.40 pence per share (2024: 2.80 pence) 6,727 5,538
Proposed dividends on ordinary shares
Final dividend for 2025: 7.40 pence per share (2024: 6.20 pence) 14,651 12,278
An interim dividend payment of £6,727,000 is included in the consolidated
statement of cash flows (2024: £5,538,000).
A final dividend payment of £12,278,000 is included in the consolidated
statement of cash flows relating to 2024 (2024: £10,879,000 relating to
2023).
Total dividend payments of £19,005,000 is included in the consolidated
statement of cash flows (2024: £16,417,00).
The proposed final dividend on ordinary shares is subject to approval at the
Annual General Meeting and is not recognised as a liability at 31 July 2025.
There are no income tax consequences attached to the payment of dividends in
either 2025 or 2024 by the Group to its shareholders.
23. Related party transactions
Transactions between Volution Group plc and its subsidiaries, and transactions
between subsidiaries, are eliminated on consolidation and are not disclosed in
this note. A breakdown of transactions between the Group and its related
parties is disclosed below.
No related party loan note balances exist at 31 July 2025 or 31 July 2024.
There were no material transactions or balances between the Company and its
key management personnel or members of their close family other than the
compensation shown below. At the end of the period, key management personnel
did not owe the Company any amounts.
The Companies Act 2006 and the Directors' Remuneration Report Regulations 2013
require certain disclosures of Directors' remuneration. The details of the
Directors' total remuneration are provided in the Directors' Remuneration
Report.
Compensation of key management personnel
2025 2024
£000 £000
Short-term employee benefits 4,802 4,888
Share-based payment charge 1,018 904
Total 5,820 5,792
Key management personnel is defined as the CEO, the CFO and the 10 (2024: 15)
individuals who report directly to the CEO. Due to the internal senior
management restructure the CEO has less direct reports as there are now three
senior regional leads compared with 8 in the prior year.
The Group also incurred fees and expenses of £468,000 (2024: £414,000) in
respect of Claire Tiney, Amanda Mellor, Nigel Lingwood, Margaret Amos,
Jonathan Davis, Celia Baxter and Emmanuelle Dubu for their services as
Non-Executive Directors.
24. Glossary of terms
Adjusted basic and diluted EPS: calculated by dividing the adjusted
profit/(loss) for the period attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares outstanding during
the period.
Diluted earnings per share amounts are calculated by dividing the adjusted net
profit/(loss) attributable to ordinary equity holders of the parent by the
weighted average number of ordinary shares outstanding during the period plus
the weighted average number of ordinary shares that would be issued on
conversion of any dilutive potential ordinary shares into ordinary shares.
Adjusted EBITA: adjusted operating profit before amortisation.
Adjusted EBITDA: adjusted operating profit before depreciation and
amortisation.
Adjusted finance costs: finance costs before net gains or losses on financial
instruments at fair value and the exceptional write-off of unamortised loan
issue costs upon refinancing.
Adjusted operating cash flow: adjusted EBITDA plus or minus movements in
operating working capital, less net investments in property, plant and
equipment and intangible assets.
Adjusted operating profit: operating profit before exceptional operating
costs, fair value movement on contingent consideration and amortisation of
assets acquired through business combinations.
Adjusted profit after tax: profit after tax before exceptional operating
costs, fair value movement on contingent consideration, unwinding of
discounting on contingent consideration exceptional write-off of unamortised
loan issue costs upon refinancing, net gains, or losses on financial
instruments at fair value, amortisation of assets acquired through business
combinations and the tax effect on these items.
Adjusted profit before tax: profit before tax before exceptional operating
costs, fair value movement on contingent consideration, unwinding of
discounting on contingent consideration, exceptional write-off of unamortised
loan issue costs upon refinancing, net gains, or losses on financial
instruments at fair value and amortisation of assets acquired through business
combinations.
Adjusted tax charge: the reported tax charge less the tax effect on the
adjusted items.
CAGR: compound annual growth rate.
Cash conversion: calculated by dividing adjusted operating cash flow by
adjusted EBITA.
Constant currency: to determine values expressed as being at constant currency
we have converted the income statement of our foreign operating companies for
the year ended 31 July 2025 at the average exchange rate for the year ended 31
July 2024. In addition, we have converted the UK operating companies' sale and
purchase transactions in the year ended 31 July 2024, which were denominated
in foreign currencies, at the average exchange rates for the year ended 31
July 2023.
EBITA: profit before net finance costs, tax and amortisation.
EBITDA: profit before net finance costs, tax, depreciation and amortisation.
Net debt: bank borrowings and lease liabilities less cash and cash
equivalents.
Operating cash flow: EBITDA plus or minus movements in operating working
capital, less share-based payment expense, less net investments in property,
plant and equipment and intangible assets.
ROIC: measured as adjusted operating profit for the year divided by average
net assets adding back net debt, acquisition-related liabilities, and historic
goodwill and acquisition-related amortisation charges (net of the associated
deferred tax).
1 (#_ftnref1) The Group uses some alternative performance measures (APMs) to
track and assess the underlying performance of the business. For a definition
of all the adjusted and non-GAAP measures, please see the glossary of terms in
note 24 to the condensed consolidated financial statements.
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