LSE:FAN

Stock Analysis Report

Executive Summary

Volution Group plc, together with its subsidiaries, manufactures and supplies ventilation products to residential and commercial construction markets in the United Kingdom and internationally.

Rewards

Trading at 11.3% below its fair value

Earnings grew by 36.8% over the past year

Risk Analysis

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Solid track record with mediocre balance sheet.


Similar Companies

Share Price & News

How has Volution Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FAN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.0%

FAN

1.8%

GB Building

-1.1%

GB Market


1 Year Return

58.6%

FAN

28.8%

GB Building

12.7%

GB Market

Return vs Industry: FAN exceeded the UK Building industry which returned 27.1% over the past year.

Return vs Market: FAN exceeded the UK Market which returned 12.7% over the past year.


Shareholder returns

FANIndustryMarket
7 Day-2.0%1.8%-1.1%
30 Day-2.8%2.7%0.07%
90 Day22.0%19.6%6.2%
1 Year62.7%58.6%33.2%28.8%18.6%12.7%
3 Year45.4%35.4%31.5%19.5%21.8%6.3%
5 Year84.7%64.5%73.6%48.1%42.5%9.6%

Price Volatility Vs. Market

How volatile is Volution Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Volution Group undervalued compared to its fair value and its price relative to the market?

2.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FAN (£2.35) is trading below our estimate of fair value (£2.65)

Significantly Below Fair Value: FAN is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: FAN is poor value based on its PE Ratio (25.6x) compared to the Building industry average (16.8x).

PE vs Market: FAN is poor value based on its PE Ratio (25.6x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate FAN's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: FAN is overvalued based on its PB Ratio (2.6x) compared to the GB Building industry average (1.7x).


Next Steps

Future Growth

How is Volution Group forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

2.9%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if FAN's forecast earnings growth is above the savings rate (0.5%).

Earnings vs Market: Insufficient data to determine if FAN's earnings are forecast to grow faster than the UK market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: FAN's revenue (3.2% per year) is forecast to grow slower than the UK market (3.6% per year).

High Growth Revenue: FAN's revenue (3.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FAN's Return on Equity is forecast to be low in 3 years time (14.8%).


Next Steps

Past Performance

How has Volution Group performed over the past 5 years?

28.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FAN has high quality earnings.

Growing Profit Margin: FAN's current net profit margins (7.7%) are higher than last year (6.5%).


Past Earnings Growth Analysis

Earnings Trend: FAN has become profitable over the past 5 years, growing earnings by 28.8% per year.

Accelerating Growth: FAN's earnings growth over the past year (36.8%) exceeds its 5-year average (28.8% per year).

Earnings vs Industry: FAN earnings growth over the past year (36.8%) exceeded the Building industry 1.4%.


Return on Equity

High ROE: FAN's Return on Equity (10.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Volution Group's financial position?


Financial Position Analysis

Short Term Liabilities: FAN's short term assets (£90.7M) exceed its short term liabilities (£48.3M).

Long Term Liabilities: FAN's short term assets (£90.7M) do not cover its long term liabilities (£103.3M).


Debt to Equity History and Analysis

Debt Level: FAN's debt to equity ratio (48.5%) is considered high.

Reducing Debt: FAN's debt to equity ratio has increased from 40.5% to 48.5% over the past 5 years.

Debt Coverage: FAN's debt is well covered by operating cash flow (37.3%).

Interest Coverage: FAN's interest payments on its debt are well covered by EBIT (12.4x coverage).


Balance Sheet

Inventory Level: FAN has a low level of unsold assets or inventory.

Debt Coverage by Assets: FAN's debt is covered by short term assets (assets are 1.1x debt).


Next Steps

Dividend

What is Volution Group's current dividend yield, its reliability and sustainability?

2.03%

Current Dividend Yield


Dividend Yield vs Market

company2.0%marketbottom25%1.8%markettop25%5.0%industryaverage2.8%forecastin3Years2.3%

Current dividend yield vs market & industry

Notable Dividend: FAN's dividend (2.09%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: FAN's dividend (2.09%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, FAN has been paying a dividend for less than 10 years.

Growing Dividend: FAN's dividend payments have increased, but the company has only paid a dividend for 5 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (53.3%), FAN's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FAN's dividends in 3 years are forecast to be well covered by earnings (31.4% payout ratio).


Next Steps

Management

What is the CEO of Volution Group's salary, the management and board of directors tenure and is there insider trading?

5.4yrs

Average management tenure


CEO

Ronnie George 0

5.7yrs

Tenure

UK£885,000

Compensation

Mr. Ronnie George has been the Chief Executive Officer of Volution Group plc since May 15, 2014 and serves as its Director. Mr. George served as the Chief Executive Officer of the then holding company, Vol ...


CEO Compensation Analysis

Compensation vs Market: Ronnie's total compensation ($USD1.15M) is about average for companies of similar size in the UK market ($USD1.13M).

Compensation vs Earnings: Ronnie's compensation has been consistent with company performance over the past year.


Management Age and Tenure

5.4yrs

Average Tenure

Experienced Management: FAN's management team is seasoned and experienced (5.4 years average tenure).


Board Age and Tenure

5.6yrs

Average Tenure

58yo

Average Age

Experienced Board: FAN's board of directors are considered experienced (5.6 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£19,88724 May 19
Paul Hollingworth
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares11,583
Max PriceUK£1.72

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Michael Anscombe (53yo)

    Company Secretary

    • Tenure: 5.4yrs
  • Ronnie George

    CEO & Executive Director

    • Tenure: 5.7yrs
    • Compensation: UK£885.00k
  • Lee Nurse

    Marketing Director of Ventilation Group

    • Paul Davies

      Group Operations Director

      • Andy O'Brien

        CFO & Executive Director

        • Tenure: 0.4yrs

      Board Members

      • Tony Reading (74yo)

        Senior Independent Non-Executive Director

        • Tenure: 5.6yrs
        • Compensation: UK£63.00k
      • Peter Hill

        Non-Executive Chairman

        • Tenure: 5.6yrs
        • Compensation: UK£143.00k
      • Paul Hollingworth (58yo)

        Independent Non-Executive Director

        • Tenure: 5.6yrs
        • Compensation: UK£58.00k
      • Claire Tiney (58yo)

        Independent Non-Executive Director

        • Tenure: 3.4yrs
        • Compensation: UK£48.00k
      • Ronnie George

        CEO & Executive Director

        • Tenure: 5.7yrs
        • Compensation: UK£885.00k
      • Amanda Mellor (55yo)

        Independent Non-Executive Director

        • Tenure: 1.8yrs
        • Compensation: UK£48.00k
      • Andy O'Brien

        CFO & Executive Director

        • Tenure: 0.4yrs

      Company Information

      Volution Group plc's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: Volution Group plc
      • Ticker: FAN
      • Exchange: LSE
      • Founded: 2014
      • Industry: Building Products
      • Sector: Capital Goods
      • Market Cap: UK£476.908m
      • Shares outstanding: 197.89m
      • Website: https://www.volutiongroupplc.com

      Number of Employees


      Location

      • Volution Group plc
      • Fleming Way
      • Crawley
      • West Sussex
      • RH10 9YX
      • United Kingdom

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      FANLSE (London Stock Exchange)YesOrdinary SharesGBGBPJun 2014
      FANLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJun 2014
      VO1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 2014
      VLUT.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJun 2014

      Biography

      Volution Group plc, together with its subsidiaries, manufactures and supplies ventilation products to residential and commercial construction markets in the United Kingdom and internationally. The company operates through two segments, Ventilation Group and OEM (Torin-Sifan). The company’s products include 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 and fan coils; commercial 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, National Ventilation, Airtech, Breathing Buildings, Fresh, PAX, VoltAir, Welair, Kair, Air Connection, inVENTer, Ventilair, and Simx brands. Volution Group plc was incorporated in 2014 and is headquartered in Crawley, the United Kingdom. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/25 22:11
      End of Day Share Price2020/01/24 00:00
      Earnings2019/07/31
      Annual Earnings2019/07/31


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.