Volution (FAN) 201p

Gain to date: 0.5%

Original entry price: Buy at 200p, 22 March 2018

Our positive call on ventilation products supplier Volution (FAN) is yet to be rewarded but the company continues to make solid progress and a recent acquisition looks a good fit with the company’s strategy of pursuing bolt-on acquisitions to supplement solid organic growth.

A full year trading update on 10 August could be the catalyst to get the share price moving assuming it shows an improvement from the negative takeaways seen in the first half trading period.

These encompassed margin pressure caused by the loss of some high return work in the UK and a profitability drag as it gets newly acquired businesses up to speed. There was also softer cash flow thanks to a short-term increase in spend on customer service during a transitional period for the business in the UK.

On 6 July the company announced the £10.2m purchase of Finnish operator Oy Pamon Ab, with a further £1.8m contingent on earnings performance. The deal is expected to be earnings enhancing in the year to 31 July 2019.

Chief executive Ronnie George says: ‘The business will be highly complementary to our position in the Nordics providing us with an enlarged presence in the new build sector in Finland and the Nordics, in the growing and regulatory driven market for mechanical ventilation with heat recovery units.’

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