Interim Condensed Consolidated Statement of Comprehensive Income

For the period ended 31 January 2025

 

	Notes	Unaudited 6 months to 31 January 2025 £000	Unaudited 6 months to 31 January 2024 £000
Revenue from contracts with customers	3	187,833	172,479
Cost of sales		(96,107)	(84,859)
Gross profit		91,726	87,620
Administrative and distribution expenses		(58,182)	(53,824)
Operating profit before separately disclosed items		33,544	33,796
Costs of business combinations		(1,945)	(116)
Operating profit		31,599	33,680
Finance income		1,319	49
Finance costs		(3,724)	(3,198)
Re-measurement of financial liabilities	11	(455)	(304)
Re-measurement of future consideration	11	(3,057)	(1,270)
Profit before tax		25,682	28,957
Income tax	5	(6,831)	(7,004)
Profit after tax		18,851	21,953
Other comprehensive expense
Other comprehensive income that may be reclassified to profit or loss in subsequent periods:
Exchange differences arising on translation of foreign operations		(4,992)	(422)
Gain/(loss) on currency loans relating to the net investment in foreign operations		2,774	338
Other comprehensive loss for the period		(2,218)	(84)
Total comprehensive income for the period, net of tax		16,633	21,869
Earnings per share
Basic earnings per share	6	9.5p	11.1p
Diluted earnings per share	6	9.4p	11.0p

 

Interim Condensed Consolidated Statement of Financial Position

At 31 January 2025

	Notes	31 January 2025 Unaudited £000	31 July 2024 Audited £000
Non-current assets
Property, plant and equipment	10	31,599	30,193
Right-of-use assets		35,014	24,894
Intangible assets - goodwill	7	238,800	171,340
Intangible assets - others	8	128,667	76,902
		434,080	303,329
Current assets
Inventories		73,963	53,112
Trade and other receivables		69,666	55,239
Other financial assets		988	─
Income tax assets		─	392
Cash and short-term deposits		10,677	18,243
		155,294	126,986
Total assets		589,374	430,315
Current liabilities
Trade and other payables		(61,486)	(46,653)
Refund liabilities		(12,986)	(10,847)
Income tax		(3,742)	(3,940)
Other financial liabilities	11	(34,365)	(22,068)
Interest-bearing loans and borrowings	12	(5,894)	(14,363)
Provisions		(1,958)	(1,450)
		(120,431)	(99,321)
Non-current liabilities
Interest-bearing loans and borrowings	12	(190,510)	(71,630)
Provisions		(472)	(819)
Deferred tax liabilities		(27,970)	(12,622)
		(218,952)	(85,071)
Total liabilities		(339,383)	(184,392)
Net assets		249,991	245,923
Capital and reserves
Share capital		2,000	2,000
Share premium		11,527	11,527
Treasury shares		(2,143)	(2,250)
Capital reserve		93,855	93,855
Share-based payment reserve		5,117	5,427
Foreign currency translation reserve		(8,470)	(6,252)
Retained earnings		148,105	141,616
Total equity		249,991	245,923

 

The interim condensed consolidated financial statements of Volution Group plc (registered number: 09041571) were approved by the Board of Directors and authorised for issue on 12 March 2025.

 

On behalf of the Board

 

 

 

 

 

 

Ronnie George                                                                                                            Andy O'Brien

Chief Executive Officer                                                                                         Chief Financial Officer

 

 

Interim Condensed Consolidated Statement of Changes in Equity

For the period ended 31 January 2025

	Share capital £000	Share premium £000	Treasury shares £000	Capital reserve £000	Share-based payment reserve £000	Foreign currency translation reserve £000	Retained earnings £000	Total Equity £000
At 31 July 2023 (Audited)	2,000	11,527	(2,390)	93,855	5,584	(1,225)	116,894	226,245
Profit for the period	─	─	─	─	─	─	21,953	21,953
Other comprehensive loss	─	─	─	─	─	(84)	─	(84)
Total comprehensive income	─	─	─	─	─	(84)	21,953	21,869
Purchase of own shares	─	─	(2,732)	─	─	─	─	(2,732)
Exercise of shares options	─	─	2,872	─	(1,214)	─	(1,658)	─
Share-based payment including tax	─	─	─	─	852	─	─	852
Dividend paid	─	─	─	─	─	─	(10,879)	(10,879)
At 31 January 2024 (Unaudited)	2,000	11,527	(2,250)	93,855	5,222	(1,309)	126,310	235,355
Profit for the period	─	─	─	─	─	─	20,844	20,844
Other comprehensive income	─	─	─	─	─	(4,943)	─	(4,943)
Total comprehensive income	─	─	─	─	─	(4,943)	20,844	15,901
Share-based payment including tax	─	─	─	─	205	─	─	205
Dividend paid	─	─	─	─	─	─	(5,538)	(5,538)
At 31 July 2024 (Audited)	2,000	11,527	(2,250)	93,855	5,427	(6,252)	141,616	245,923
Profit for the period	─	─	─	─	─	─	18,851	18,851
Other comprehensive loss	─	─	─	─	─	(2,218)	─	(2,218)
Total comprehensive income	─	─	─	─	─	(2,218)	18,851	16,633
Purchase of own shares	─	─	(1,325)	─	─	─	─	(1,325)
Exercise of share options	─	─	1,432	─	(1,348)	─	(84)	─
Share-based payment including tax	─	─	─	─	1,038	─	─	1,038
Dividend paid	─	─	─	─	─	─	(12,278)	(12,278)
At 31 January 2025 (Unaudited)	2,000	11,527	(2,143)	93,855	5,117	(8,470)	148,105	249,991

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.

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 fair 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.

 

Interim Condensed Consolidated Statement of Cash Flows

For the period ended 31 January 2025

 

	Notes	Unaudited 6 months to 31 January 2025 £000	Unaudited 6 months to 31 January 2024 £000
Operating activities
Profit for the period after tax		18,851	21,953
Adjustments to reconcile profit for the period to net cash flow from operating activities:
Income tax		6,831	7,004
Gain on disposal of property, plant and equipment and intangible assets		(80)	(78)
Amortisation of acquired inventory fair value adjustment		4,133	─
Re-measurement of financial liability relating to business combinations		455	304
Re-measurement of future consideration relating to business combinations		3,057	1,270
Finance income		(1,319)	(49)
Finance costs		3,724	3,198
Share-based payment expense		1,038	852
Depreciation of property, plant and equipment	10	2,319	2,212
Depreciation of right of use assets		2,732	2,254
Amortisation of intangible assets	8	5,989	5,666
Working capital adjustments:
Decrease/(Increase) in trade and other receivables		1,217	(2,468)
Decrease in inventories		5,318	2,879
Amortisation of acquired inventory fair value adjustment		(4,133)	─
Decrease in trade and other payables		(2,083)	(2,541)
Movement in provisions		656	(328)
Cash generated by operations		48,705	42,128
UK income tax paid		(2,500)	(2,500)
Overseas income tax paid		(5,708)	(4,732)
Net cash flow generated from operating activities		40,497	34,896
Investing activities
Payments to acquire intangible assets	8	(753)	(911)
Purchase of property, plant and equipment	10	(2,142)	(2,774)
Proceeds from disposal of property, plant and equipment and intangible assets		124	240
Payments to acquire subsidiaries, net of cash acquired	9	(106,629)	(8,498)
Interest received		134	49
Net cash flow used in investing activities		(109,266)	(11,894)
Financing activities
Repayment of interest-bearing loans and borrowings		(57,261)	(27,223)
Proceeds from new borrowings		169,119	19,505
Repayment of VMI debt acquired		(130)	(100)
Consideration paid for 25% of ClimaRad		(29,509)	─
Issue costs of new borrowings		(1,799)	─
Interest paid		(3,095)	(2,811)
Payment of principal portion of lease liabilities		(2,225)	(1,830)
Dividend paid		(12,278)	(10,879)
Purchase of own shares		(1,325)	(2,732)
Net cash flow generated from / (used in) financing activities		61,497	(26,070)
Net decrease in cash and cash equivalents		(7,272)	(3,068)
Cash and cash equivalents at the start of the period		18,243	21,244
Effect of exchange rates on cash and cash equivalents		(294)	(1,093)
Cash and cash equivalents at the end of the period		10,677	17,083

 

 

Notes to the Interim Condensed Consolidated Financial Statements

For the period ended 31 January 2025

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.

The unaudited interim condensed consolidated financial statements were authorised for issue by the Board of Directors on 12 March 2025.

1. Basis of preparation

These condensed consolidated financial statements have been prepared in accordance with UK-adopted International Accounting Standards (IAS) 34 'Interim financial reporting'. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the Annual Report 2024. The financial information for the half years ended 31 January 2025 and 31 January 2024 do not constitute statutory accounts within the meaning of Section 434(3) of the Companies Act 2006 and are unaudited.

The annual financial statements of Volution Group plc are prepared in accordance with UK-adopted International accounting standards. The comparative financial information for the year ended 31 July 2024 included within this report does not constitute the full statutory accounts for that period. The Annual Report 2024 has been filed with the Registrar of Companies. The Independent Auditor's Report on the Annual Report 2024 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under section 498(2) and 498(3) of the Companies Act 2006.

The accounting policies adopted are consistent with those of the previous financial year except for income tax expense, which is recognised based on management's estimate of the weighted average effective annual income tax rate expected for the full financial year. They are consistent with those of the corresponding interim reporting period.

Going Concern

The financial statements have been prepared on a going concern basis. The Directors have at the time of approving the financial statements, a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence in the foreseeable future, assessed for the 18-month period ending 31 July 2026.

The financial position remains robust with committed facilities totalling £230 million, and an accordion of a further £70 million, maturing in September 2027. The financial covenants on these facilities are for leverage (net debt/adjusted EBITDA) of not more than three times and for adjusted interest cover of not less than four times.

The 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, including the high inflation environment and economic uncertainty across many of the countries in which we operate, and the other principal risks set out in the Annual report 2024.

We have then applied a severe but plausible downside scenario to model the potential concurrent impact of:

-          a significant economic slowdown reducing revenue by 15% compared to plan in FY25, with no recovery in FY26, and

-          supply chain difficulties or inflationary cost increases reducing gross profit margin by 10%;

A reverse stress test scenario has also been modelled which shows a revenue contraction of >21% in FY25 with no recovery in FY26 without the implementation of any mitigations would be required to breach covenants or compromise liquidity, which is considered by the Directors an extremely remote scenario.

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 there is no material uncertainty in the use of the going concern assumption.

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.

In preparing the interim condensed consolidated financial statements, the areas where judgement has been exercised and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements for the year ended 31 July 2024, with the addition of certain judgements and estimations applied in the accounting for the Fantech business combination.

The identification and valuation of intangible assets acquired in Fantech required significant judgement. As part of the purchase price allocation (PPA), the Group determined the fair values of identifiable assets and liabilities, including the separately identifiable intangible assets of customer relationships and brands.  Management exercised judgement in assessing whether those intangible assets were separately identifiable and that they meet the criteria for recognition under IFRS 3 Business Combinations and in assessing the useful economic life of each asset.

The valuation of acquired intangible assets involved significant estimates and assumptions, including a) The selection of an appropriate discount rate, b) Revenue Growth and customer Attrition Rates for customer valuation, and c) Royalty Rates used for brand valuation.  These estimates are inherently uncertain and may be revised during the measurement period as more information becomes available. Changes in these assumptions could materially impact the carrying values of intangible assets, goodwill, and amortization expenses. 

 

 

New standards and interpretations

Any new standards or interpretations in issue, but not yet effective, are not expected to have a material impact on the Group's net assets or results.  Based on the Group's ongoing assessment, the Group does not anticipate any new or revised standards and interpretations that are effective from 1 January 2025 and beyond to have a material impact on its condensed consolidated financial statements.

2. Adjusted earnings

The Board and key management use some alternative performance measures 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 statutory figure is shown below.

	6 months to 31 January 2025 £000	6 months to 31 January 2024 £000
Profit after tax	18,851	21,953
Add back:
Amortisation of acquired inventory fair value adjustment	4,133	─
Costs of business combinations	1,945	116
Re-measurement of future consideration relating to the business combinations	3,057	1,270
Net (gain)/loss on financial instruments at fair value	(1,185)	(196)
Amortisation and impairment of intangible assets acquired through business combinations	4,935	4,796
Tax effect of the above	(1,458)	(1,016)
Adjusted profit after tax	30,278	26,923
Add back:
Adjusted tax charge	8,289	8,020
Adjusted profit before tax	38,567	34,943
Add back:
Interest payable on bank loans, lease liabilities and amortisation of financing costs	3,724	3,394
Re-measurement of financial liability relating to the business combination of ClimaRad	455	304
Finance income	(134)	(49)
Adjusted operating profit	42,612	38,592
Add back:
Depreciation of property, plant and equipment	2,319	2,212
Depreciation of right-of-use asset	2,732	2,254
Amortisation of development costs, software and patents	1,054	870
Adjusted EBITDA	48,717	43,928

 

For definitions of terms referred to above see note 16, Glossary of terms.

3. Revenue from contracts with customers

Revenue recognised in the statement of comprehensive income is analysed below:

	6 months to 31 January 2025 £000	6 months to 31 January 2024 £000
Sale of goods	185,398	169,100
Installation services	2,435	3,379
Total revenue from contracts with customers	187,833	172,479

 

Sales of goods and installation service revenue in the comparative period has been represented, total revenue from contracts with customers did not change.

 

Market sectors	6 months to 31 January 2025 £000	6 months to 31 January 2024 £000
UK
Residential	55,088	49,471
Commercial	14,372	15,209
Export	6,814	5,673
OEM (Torin-Sifan)	7,018	7,441
Total UK	83,292	77,794
Nordics	23,889	25,367
Central Europe	44,270	43,106
Total Continental Europe	68,159	68,473
Total Australasia	36,382	26,212
Total revenue from contracts with customers	187,833	172,479

 

4. Segmental analysis

6 months ended 31 January 2025	UK £000	Continental Europe £000	Australasia £000	Central / Eliminations £000	Consolidated £000
Revenue from contracts with customers
Total segment revenue	98,824	86,752	37,825	(35,568)	187,833
Inter-segment revenue	(15,532)	(18,593)	(1,443)	35,568	─
Revenue from external contracts with customers	83,292	68,159	36,382	─	187,833
Gross profit	42,981	34,720	14,025	─	91,726
Results
Adjusted segment EBITDA	23,855	18,328	9,203	(2,669)	48,717
Depreciation and amortisation of development costs, software and patents	(2,438)	(1,905)	(1,423)	(339)	(6,105)
Adjusted operating profit/(loss)	21,417	16,423	7,780	(3,008)	42,612
Amortisation of intangible assets acquired through business combinations	(940)	(2,680)	(1,315)	─	(4,935)
Amortisation of acquired inventory fair value adjustment			(4,133)	─	(4,133)
Business combination-related operating costs	─	─	─	(1,945)	(1,945)
Operating profit/(loss)	20,477	13,743	2,332	(4,953)	31,599
Unallocated expenses
Net finance cost	─	─	124	(2,529)	(2,405)
Re-measurement of future consideration	─	(3,057)	─	─	(3,057)
Re-measurement of financial liability	─	(455)	─	─	(455)
Profit/(loss) before tax	20,477	10,231	2,456	(7,482)	25,682

 

 

6 months ended 31 January 2024	UK £000	Continental Europe £000	Australasia £000	Central / Eliminations £000	Consolidated £000
Revenue from contracts with customers
Total segment revenue	90,350	87,079	26,241	(31,191)	172,479
Inter-segment revenue	(12,556)	(18,606)	(29)	31,191	─
Revenue from external contracts with customers	77,794	68,473	26,212	─	172,479
Gross profit	38,981	34,917	13,722	─	87,620
Results
Adjusted segment EBITDA	21,291	18,472	6,928	(2,763)	43,928
Depreciation and amortisation of development costs, software and patents	(2,425)	(1,902)	(668)	(341)	(5,336)
Adjusted operating profit/(loss)	18,866	16,570	6,260	(3,104)	38,592
Amortisation of intangible assets acquired through business combinations	(1,050)	(2,953)	(793)	─	(4,796)
Business combination-related operating costs	─	─	─	(116)	(116)
Operating profit/(loss)	17,816	13,617	5,467	(3,220)	33,680
Unallocated expenses
Net finance cost	─	─	(55)	(3,094)	(3,149)
Re-measurement of future consideration	─	(1,270)	─	─	(1,270)
Re-measurement of financial liability	─	(304)	─	─	(304)
Profit/(loss) before tax	17,816	12,043	5,412	(6,314)	28,957

 

5. Income tax

Income tax expense is recognised based on management's estimate of the weighted average effective annual income tax rate expected for the full financial year.

Our underlying effective tax rate, on adjusted profit before tax, was 21.5% (H1 2024: 23.0%).

Our statutory effective tax rate for the period was 26.6% (H1 2024: 24.2%).

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 €750m 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.

 

 

 

 

 

 

6. Earnings per share (EPS)

Basic earnings per share is calculated by dividing the profit 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 net profit 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. There are 2,077,163 dilutive potential ordinary shares at 31 January 2025 (H1 2024: 3,128,124).

The following reflects the income and share data used in the basic and diluted earnings per share computations:

	6 months ended 31 January 2025 £000	6 months ended 31 January 2024 £000
Profit attributable to ordinary equity holders	18,851	21,953
	Number	Number
Weighted average number of ordinary shares for basic earnings per share	197,954,910	197,102,359
Effect of dilution from:
Share options	2,077,163	1,939,674
Weighted average number of ordinary shares for diluted earnings per share	200,032,073	199,042,033
Earnings per share
Basic	9.5p	11.1p
Diluted	9.4p	11.0p

 

	6 months ended 31 January 2025 £000	6 months ended 31 January 2024 £000
Adjusted profit attributable to ordinary equity holders	30,278	26,923
	Number	Number
Weighted average number of ordinary shares for adjusted basic earnings per share	197,954,910	197,102,359
Effect of dilution from:
Share options	2,077,163	1,939,674
Weighted average number of ordinary shares for adjusted diluted earnings per share	200,032,073	199,042,033
Adjusted earnings per share
Basic	15.3p	13.7p
Diluted	15.1p	13.5p

The weighted average number of ordinary shares has increased as a result of treasury shares held by the Volution Employee Benefit Trust (EBT) during the period. At 31 January 2025, a total of 1,965,923 (31 January 2024: 2,206,186) ordinary shares in the Company 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 period, 225,000 ordinary shares in the Company were purchased by the trustees (6 months to 31 January 2024: 700,000) and 410,291 (6 months to 31 January 2024: 964,914) were released by the trustees.

The shares are excluded when calculating the statutory and adjusted EPS.

Adjusted profit attributable to ordinary equity holders has been reconciled in note 2, adjusted earnings.

See note 16, Glossary of terms, for an explanation of the adjusted basic and diluted earnings per share calculation.

7. Intangible assets - goodwill

Goodwill	Total £000
Cost and net book value
At 31 July 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 (provisional)	69,870
Net foreign currency exchange differences	(2,410)
At 31 January 2025	238,800

 

 

 

8. Intangible assets - other

2025	Total £000
Cost
At 1 August 2024	247,146
Additions	753
On business combination (provisional)	59,020
Disposals	(99)
Net foreign currency exchange differences	(2,359)
At 31 January 2025	304,461
Amortisation
At 1 August 2024	170,244
Charge for the period	5,989
Disposals	(99)
Net foreign currency exchange differences	(340)
At 31 January 2025	175,794
Net book value
At 31 January 2025	128,667

 

Intangible assets - other, is made up of development costs, software costs, customer base, trademarks and patents.

 

9. Business combinations

Business combination in the half year ended 31 January 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$280 million (£141.6 million), with initial consideration of AUD$220 million (£112.0 million) on a debt free cash free basis, with further non contingent consideration of AUD$60 million (£29.6 million) payable twelve months after the completion date.

 

Transaction costs relating to professional fees associated with the business combination in the period ending 31 January 2025 were £1,888,000 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 recognized 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 provisional fair value of the net assets acquired is set out below:

	Provisional book value £000	Provisional fair value  adjustments £000	Provisional Fair value £000
Intangible assets	1,127	57,893	59,020
Property, plant and equipment	1,760	-	1,760
Right of use assets	11,315	-	11,315
Inventory	19,648	6,282	25,930
Trade and other receivables	15,462	-	15,462
Trade and other payables	(15,106)	-	(15,106)
Lease Liabilities	(14,362)	-	(14,362)
Income Tax	(684)	-	(684)
Provisions	(186)	-	(186)
Deferred Tax	896	(17,682)	(16,786)
Cash and cash equivalents	5,370	-	5,370
Total identifiable net assets	25,240	46,493	71,733
Goodwill on the business combination			69,870
Discharged by:
Cash consideration			111,999
Deferred consideration			29,604

Goodwill of £69,870,000 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.

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 is charged to gross profit over a period of 4 months from the date of acquisition.

Fantech generated revenue of £11,386,000 and generated a profit after tax of £115,000 in the period from acquisition to 31 January 2025 that is included in the consolidated statement of comprehensive income for this reporting period.

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 combination in the half year ended 31 January 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 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$6 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 EBITDA for each period for which contingent consideration is measured is 10% higher than expected, contingent consideration would be £nil.

Transaction costs relating to professional fees associated with the business combination in the period ending 31 January 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 value £000	Fair value  adjustments £000	Fair value £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.

The gross amount of trade and other receivables is £130,000. All of the trade receivables are expected to be collected in full.

DVS generated revenue of £3,560,000 and generated a profit after tax of £60,000 in the period from acquisition to 31 January 2024 that is included in the consolidated statement of comprehensive income for this reporting period.

If the combination had taken place at 1 August 2023, the Group's revenue and profit before tax would have been the same as reported, as the acquisition took place on the 4 August 2023.

 

Cash outflows arising from business combinations are as follows:

 

	6 months to 31 January 2025 £000	6 months to 31 January 2024 £000
Fantech
Cash consideration	111,999	-
Less: cash acquired with the business	(5,370)	-
DVS
Cash consideration	-	8,498
Total revenue from contracts with customers	106,629	8,498

 

10. Property, plant and equipment excluding right-of-use assets

2025				Total £000
Cost
At 1 August 2024				55,101
On business combination				1,760
Additions				2,142
Disposals				(1,249)
Net foreign currency exchange differences				(185)
At 31 January 2025				57,569
Depreciation
At 1 August 2024				24,908
Charge for the period				2,319
Disposals				(1,205)
Net foreign currency exchange differences				(52)
At 31 January 2025				25,970
Net book value
At 31 January 2025				31,599

Commitments for the acquisition of property, plant and equipment as of 31 January 2025 are £595,000 (31 July 2024: £626,000).

11. Other financial liabilities

2025	Foreign exchange forward contracts £000	Contingent consideration ClimaRad BV £000	Contingent consideration ERI £000	Deferred consideration Fantech £000	Total £000
At 1 August 2024	192	16,346	5,530	-	22,068
Deferred consideration	-	-	-	29,604	29,604
Re-measurement of financial liability	-	455	-	-	455
Re-measurement of contingent consideration	-	4,021	(964)	-	3,057
Consideration paid	-	(20,046)	-	-	(20,046)
Foreign exchange	(192)	31	-	(612)	(773)
At 31 January 2025	-	807	4,566	28,992	34,365
Analysis
Current	-	807	4,566	28,992	34,365
Non-current	-	-	-	-	-
Total	-	807	4,566	28,992	34,365

 

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. For non-current liabilities due more than one year from the balance sheet date, the assessed contingent liability is discounted using the discount rates for the relevant CGU. The contingent consideration was assessed based on the current estimate of future performance of the business, discounted to present value.

 

The remeasurement of contingent consideration of £3,057,000 (H1 2024: £1,270,000) is made up of £699,000 (H1 2024: £nil) resulting from EBITDA performance for the 2024 ClimaRad and ERI earn-out periods, and £2,358,000 (H1 2024: £1,270,000) resulting from the unwinding of the discounted liabilities.

 

Contingent consideration related to the acquisition of ERI has been 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, it is not anticipated that the conditions for payment will be met, and as such, the contingent consideration has been assessed as £nil.

2023				Foreign exchange forward contracts £000	Contingent consideration ClimaRad BV £000	Contingent consideration I-Vent £000	Contingent consideration ERI £000	Total £000
At 1 August 2023				330	8,877	4,115	7,720	21,042
Re-measurement of financial liability				─	870	─	─	870
Re-measurement of contingent consideration				─	6,599	(1,529)	(316)	4,754
Consideration paid				─	─	(2,566)	(1,874)	(4,440)
Foreign exchange				(138)	─	(20)	─	(158)
At 31 July 2024				192	16,346	─	5,530	22,068
Analysis
Current				192	16,346	─	5,530	22,068
Non-current				─	─	─	─	─
Total				192	16,346	─	5,530	22,068

12. Interest-bearing loans and borrowings

	31 January 2025		31 July 2024
	Current £000	Non-current £000	Current £000	Non-current £000
Unsecured - at amortised cost
Borrowings under the revolving credit facility (maturing December 2025)	─	─	─	49,794
Borrowings under the revolving credit facility (maturing September 2027)	─	158,877	─	─
Cost of arranging bank loan	─	(1,578)	─	─
	─	157,299	─	49,794
ClimaRad vendor loan (maturing March 2025)	─	─	9,605	─
Other loans (maturing September 2026)	─	435	─	565
Lease liabilities	5,894	32,776	4,758	21,271
Total	5,894	190,510	14,363	71,630

 

Revolving credit facility - at 31 January 2025

Currency	Amount outstanding £000	Termination date	Repayment frequency	Rate %
GBP	─	9 September 2027	One payment	Sonia + margin%
Euro	41,416	9 September 2027	One payment	Euribor + margin%
AUD	102,906	9 September 2027	One payment	AUD - BBSY+ margin%
Swedish Krona	14,555	9 September 2027	One payment	Stibor + margin%
Total	158,877

 

Revolving credit facility - at 31 July 2024

Currency	Amount outstanding £000	Termination date	Repayment frequency	Rate %
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 period ended 31 January 2025, Group leverage was equal or below 1.5:1 and therefore the margin remains at 1.50% in H2 2025.

 

The Group remained comfortably within its banking covenants, which are tested semi-annually. As at 31 January 2025, the multiple of EBITDA to net finance charges was 16.7 (31 July 2024: 14.8; 31 January 2024: 14.5), against a covenant minimum ratio of 4.0, and the multiple of net borrowings to EBITDA (leverage) was 1.5 (31 July 2024: 0.4; 31 January 2024: 0.7), against a covenant maximum ratio of 3.0.

 

On 10 September 2024, the Group refinanced its bank debt. The Group now has in place a new £230 million multicurrency 'Sustainability Linked Revolving Credit Facility', together with an accordion of up to £70 million. The facility matures in September 2027, with the option to extend for up to two additional years. The old facility was repaid in full.

 

At 31 January 2025, the Group had £71,123,000 of undrawn, committed bank facilities (31 July 2024: £100,200,000) and £10,677,000 of cash and cash equivalents (31 July 2024: £18,243,000).

 

13. Fair values of financial assets and financial liabilities

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

·           Level 1 - quoted (unadjusted) prices in active markets for identical assets or liabilities;

·           Level 2 - other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly; and

·           Level 3 - techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.

 

Financial instruments carried at fair value comprise the derivative financial instruments and the contingent consideration in note 11. For hierarchy purposes, derivative financial instruments are deemed to be Level 2 as external valuers are involved in the valuation of these contracts. Their fair value is measured using valuation techniques, including a DCF model. Inputs to this calculation include the expected cash flows in relation to these derivative contracts and relevant discount rates.

 

Contingent consideration is deemed to be Level 3; see note 11 for details on the valuation techniques used to measure the fair value.

 

14. Dividends paid and proposed

 

	6 months ended 31 January 2025 £000	6 months ended 31 January 2024 £000
Cash dividends on ordinary shares declared and paid
Final dividend for 2024: 6.2 pence per share (2023: 5.5 pence)	12,278	10,879
Proposed dividends on ordinary shares
Proposed interim dividend for 2025: 3.4 pence per share (2024: 2.8 pence)	6,733	5,538

 

A final dividend payment of £12,278,000 is included in the consolidated statement of cash flows relating to 2025 (2024: £10,879,000).

The Board has declared an interim dividend of 3.4 pence per ordinary share in respect of the half year ended 31 January 2025 (6 months to 31 January 2024: 2.8 pence per ordinary share) which will be paid on 6 May 2025 to shareholders on the register at the close of business on 28 March 2025. The total dividend payable has not been recognised as a liability in these accounts. The Volution EBT has agreed to waive its rights to all dividends.

 

15. 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.

 

No material related party balances, other than those transactions that have been eliminated on consolidation, exist at 31 January 2025 or 31 January 2024.

 

There were no material transactions or balances between the Company and its key management personnel or members of their close family. At the end of the period, key management personnel did not owe the Company any amounts (H1 2024: Nil).

 

16. 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. There are 2,077,163 dilutive potential ordinary shares at 31 January 2025 (H1 2024: 3,128,124).

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 less the operating activities part of the contingent consideration.

Adjusted operating profit: operating profit before adjustments for re-measurement of contingent consideration, costs of business combinations, amortisation of acquired inventory fair value adjustments and amortisation of assets acquired through business combinations.

Adjusted profit after tax: profit after tax before adjustments to re-measurement of contingent consideration, net gains, or losses on financial instruments at fair value, costs of business combinations, amortisation of acquired inventory fair value adjustments, amortisation of intangible assets acquired through business combinations and the tax effect on these items.

Adjusted profit before tax: profit before tax before adjustments for re-measurement of contingent consideration, net gains, or losses on financial instruments at fair value, costs of business combinations, amortisation of acquired inventory fair value adjustments and amortisation of assets acquired through business combinations.

Adjusted tax charge: the statutory tax charge less the tax effect on the adjusted items.

CAGR: compound annual growth rate.

Cash conversion: is 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 6 months ended 31 January 2025 at the average exchange rate for the period ended 31 January 2024. In addition, we have converted the UK operating companies' sale and purchase transactions in the period ended 31 January 2025, which were denominated in foreign currencies, at the average exchange rates for the period ended 31 January 2024.

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).