Volution (FAN) AI Stock Analysis

• Market Cap: £1.09B
• Dividend Yield: 1.64%
• Average Volume (3M): 689.77K
• Price to Earnings (P/E): 27.4
• Beta (1Y): 1.24
• Revenue Growth: 7.32%
• EPS Growth: -6.70%
• Country: UK
• Employees: 2,200
• Sector: Industrials
• Sector Strength: 65
• Industry: Construction
• EPS (TTM): 0.20
• Shares Outstanding: 198,034,910
• 10 Day Avg. Volume: 420,902
• 30 Day Avg. Volume: 689,771
• PEG Ratio: 1.66
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.14
• Price to Cash Flow (P/CF): 13.80
• P/FCF Ratio: 14.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: 700.00p
• Price Target Upside: 30.11% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

Volution's strong financial performance and positive corporate events, including a successful acquisition and strategic leadership changes, are key strengths. The technical analysis shows upward momentum but suggests caution due to potential overvaluation. The valuation indicates a higher-than-average P/E ratio, which may be justified by growth prospects. Overall, Volution is positioned well for future growth, but investors should monitor leverage and market conditions.

Positive Factors

Financial Performance

Accelerating top line growth and stronger margins in the UK and Fantech.

Market Positioning

Volution continues to outperform its underlying markets at a top line level, and further progress its margin superiority relative to peers.

Mergers and Acquisitions

The integration of the largest ever transaction, Fantech, ahead of schedule, brings a greater weighting of commercial end markets and expanded geographic footprint.

Revenue Diversification

The deal lifts Australasia to ~30% of group revenue, progressing the strategy to diversify revenue exposure away from the UK.

Negative Factors

Valuation Concerns

The level of EPS growth is not adequately reflected in the current valuation, and a Buy recommendation is reaffirmed on the stock.

Valuation Range

The valuation of 11.5x EV/EBITA is considered towards the lower end of the company's 5-year range.

Volution Business Overview & Revenue Model

Company Description

Volution Group plc, together with its subsidiaries, manufactures and supplies ventilation products to residential and commercial construction markets in the United Kingdom, Continental Europe, Australasia, and internationally. The company offers unitary extractor fans for use in bathrooms and kitchens; MVHR and MEV systems; rigid, semi-rigid, and flexible ducting products and accessories; mechanical heat recovery units; air handling units, fan coils, and hybrid ventilation products; underfloor heating, heated towel rails, radiators, and storage and panel heaters; wall, box, and tower fans, as well as portable air conditioners; hand dryers and insect killers; and sensors, controllers, and ducting products. It also manufactures blowers and motors for the heating and ventilation industry, such as direct and belt-drive fans, fandecks, double inlet centrifugal blowers, motorized impellers, and combustion blowers. The company sells its products principally under the Vent-Axia, Manrose, Diffusion, Airtech, National Ventilation, Breathing Buildings, Torin-Sifan, Fresh, PAX, VoltAir, Kair, Air Connection, inVENTer, Ventilair, ClimaRad, ERI, Rtek, Simx, and Ventair brands. Volution Group plc was incorporated in 2014 and is based in Crawley, the United Kingdom.

How the Company Makes Money

Volution Group plc generates revenue primarily through the sale of its ventilation products and systems. The company's key revenue streams include the residential and commercial sectors, where they provide both standard and customized ventilation solutions. Additionally, Volution benefits from its strong distribution network and strategic partnerships with builders, contractors, and distributors, facilitating broad market reach. The focus on energy efficiency and sustainable building solutions further drives demand, supporting the company's earnings and market position.

Volution Financial Statement Overview

Summary

Volution displays strong financial performance with solid profitability, financial stability, and robust cash flow generation. The income statement shows strong revenue growth and healthy profit margins. The balance sheet is stable, with moderate leverage and effective shareholder equity utilization. The cash flow statement highlights significant free cash flow growth and effective cash generation capabilities.

Income Statement

Volution has demonstrated strong revenue growth of approximately 6% in the latest period, with a solid gross profit margin of 51.3% and a net profit margin of 12.3%. EBIT and EBITDA margins are healthy at 20.2% and 24.0% respectively, indicating a robust operating performance. These metrics suggest solid profitability and operational efficiency, though continued focus on maintaining cost efficiencies will be important.

Balance Sheet

The company's balance sheet shows a debt-to-equity ratio of 0.35, indicating moderate leverage which is manageable. The return on equity is a respectable 17.4%, reflecting effective utilization of shareholder equity. The equity ratio stands at 57.1%, suggesting a strong capital structure. The balance sheet reflects financial stability, though any increase in leverage should be monitored.

Cash Flow

Volution's cash flow statement highlights a significant free cash flow growth rate of 20.2% year-over-year, and a strong operating cash flow to net income ratio of 1.77, which indicates effective cash generation capabilities. Additionally, the free cash flow to net income ratio is 1.60, showing strong cash conversion. Overall, the company exhibits a strong cash flow position, supporting its financial health.

Breakdown
Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
347.61M	328.01M	307.70M	272.59M	216.64M
	Gross Profit
178.27M	143.36M	127.80M	110.16M	79.94M
	EBIT
70.36M	58.56M	49.66M	38.62M	14.85M
	EBITDA
83.51M	79.13M	73.11M	58.38M	37.64M
	Net Income Common Stockholders
42.80M	37.37M	35.61M	20.84M	9.66M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
18.24M	21.24M	14.63M	19.96M	18.49M
	Total Assets
430.31M	440.65M	411.37M	383.98M	326.47M
	Total Debt
85.99M	120.46M	108.03M	108.32M	92.20M
	Net Debt
67.75M	99.21M	94.49M	88.86M	73.71M
	Total Liabilities
184.39M	214.40M	203.06M	198.69M	150.91M
	Stockholders Equity
245.92M	226.25M	208.21M	185.29M	175.56M
Cash Flow		Free Cash Flow
68.33M	56.83M	31.97M	45.73M	34.62M
	Operating Cash Flow
75.71M	64.79M	38.98M	50.43M	39.17M
	Investing Cash Flow
-19.88M	-37.48M	-24.26M	-46.69M	-5.15M
	Financing Cash Flow
-58.83M	-17.82M	-19.63M	-2.40M	-27.00M

Volution Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 538.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:FAN, the sentiment is Neutral. The current price of 538 is below the 20-day moving average (MA) of 543.85, above the 50-day MA of 531.74, and above the 200-day MA of 535.08, indicating a neutral trend. The MACD of 7.11 indicates Positive momentum. The RSI at 48.23 is Neutral, neither overbought nor oversold. The STOCH value of 20.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:FAN.

Volution Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FAN	78 Outperform	£1.09B	27.37	16.36%	1.64%	7.32%	-6.70%
CRH	75 Outperform	£59.74B	17.57	16.07%	1.95%	1.78%	15.53%
PSN	69 Neutral	£3.84B	14.38	7.71%	4.99%	15.42%	4.45%
KIE	67 Neutral	£555.54M	12.97	10.20%	3.97%	8.04%	6.94%
Sector *	62 Neutral	$8.05B	13.60	4.04%	3.11%	3.70%	-14.19%
WOSG	60 Neutral	£1.02B	25.00	7.71%	―	1.45%	-61.69%

Volution Corporate Events

Volution Group Sees Change in Shareholder Structure with Aberdeen Group Acquisition

Volution Group plc has announced a change in its shareholder structure, with Aberdeen Group plc acquiring a significant voting rights stake of 5.146702% in the company. This acquisition marks Aberdeen Group’s increased influence in Volution’s decision-making process, potentially impacting the company’s strategic direction and stakeholder interests.

Volution Group Reports Strong H1 2025 Performance and Successful Fantech Acquisition

Volution Group plc reported strong financial performance for the first half of 2025, with an 8.9% increase in revenue and a 10.4% rise in adjusted operating profit. The company completed its largest acquisition to date, Fantech, contributing to its growth despite challenging market conditions. The integration of Fantech is progressing well, and the company continues to benefit from structural growth drivers such as tightening building regulations and increased awareness of indoor air quality. Volution’s focus on efficiency, cost management, and sustainable practices, including increased use of recycled plastics, positions it well for future growth, with full-year earnings expected to exceed consensus.

Volution Group Strengthens Board with New Appointments

Volution Group plc has appointed Celia Baxter and Emmanuelle Dubu as independent Non-Executive Directors, effective March 5, 2025. Celia Baxter, with extensive experience in executive remuneration and industrial businesses, will also serve as the Remuneration Committee Chair Designate. Emmanuelle Dubu brings over 30 years of international engineering and manufacturing experience to the board. These appointments are expected to strengthen Volution’s board discussions and support its global growth strategy.

Volution Group Announces Total Voting Rights Update

Volution Group plc has announced its total voting rights as of March 3, 2025, with an issued share capital of 200,000,000 ordinary shares, where 198,034,906 shares carry voting rights. This information is crucial for shareholders to determine their notification requirements under the FCA’s Disclosure Guidance and Transparency Rules.

Volution Group to Announce Half-Year Results in March 2025

Volution Group plc has announced that it will release its half-year results for the six months ending on January 31, 2025, on March 13, 2025. This announcement is significant as it will provide insights into the company’s performance and market positioning, potentially impacting stakeholders’ perspectives on its operational and financial health.

Volution Group Announces Strategic Leadership Appointment

Volution Group plc has announced the appointment of Nigel Lingwood as the non-executive Chair Designate of Forterra plc, effective from 1 April 2025. This strategic move reflects Volution’s ongoing commitment to enhancing its leadership team, potentially strengthening its market position and offering significant implications for stakeholders.

Volution Group Announces Total Voting Rights Update

Volution Group plc announced its total voting rights as of January 2, 2025, reflecting its issued share capital of 200 million ordinary shares, with 198,034,077 voting rights after accounting for shares held in treasury. This notification is in accordance with the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules, providing shareholders with the necessary denominator for calculating their required notifications to the company, potentially impacting shareholder engagement and regulatory compliance.