TIDMFAN
RNS Number : 9571U
Volution Group plc
30 October 2017
Monday 30 October 2017
Volution Group plc
Annual Report and Accounts 2017 and Notice of Annual General
Meeting
Volution Group plc ("Volution" or the "Company", LSE: FAN), a
leading supplier of ventilation products to the residential and
commercial construction markets, announces that following the
release by Volution on 10 October 2017 of the Company's Preliminary
Results Announcement for the year ended 31 July 2017, it has today
posted and made available to shareholders on its website,
http://www.volutiongroupplc.com/ the documents listed below:
-- Annual Report and Accounts 2017
-- Notice of Annual General Meeting 2017
-- Form of Proxy for the Annual General Meeting 2017
Copies of these documents are also being submitted to the
National Storage Mechanism and will shortly be available for
inspection at: http://www.hemscott.com/nsm.do
The Company's Annual General Meeting will be held at 12.00 noon
on Wednesday 13 December 2017 at the offices of Norton Rose
Fulbright LLP, 3 More London Riverside, London SE1 2AQ.
A condensed set of financial statements and information on
important events that have occurred during the year ended 31 July
2017 and their impact on the financial statements, were included in
the Company's Preliminary Results Announcement made on 10 October
2017, which is available on the Company's website referred to
above. That information together with the information set out below
in the appendices to this announcement (which is extracted from the
Annual Report and Accounts 2017), constitute the material required
by Disclosure Guidance & Transparency Rule 6.3.5(2)(b) which is
required to be communicated to the media in full unedited text
through a Regulatory Information Service. This announcement is not
a substitute for reading the full Annual Report and Accounts
2017.
- ends -
Enquiries:
Volution Group plc
Michael Anscombe, Company Secretary +44 (0) 1293 441662
Note to Editors:
Volution Group plc (LSE: FAN) is a leading supplier of
ventilation products to the residential and commercial construction
markets in the UK, the Nordics and Central Europe.
The Volution Group operates through two divisions: the
Ventilation Group and the OEM (Torin-Sifan) division. The
Ventilation Group consists of 13 key brands - Vent-Axia, Manrose,
Diffusion, National Ventilation, Airtech, Breathing Buildings,
Fresh, PAX, VoltAir System, Welair, inVENTer, Brüggemann and
Ventilair, focused primarily on the UK, the Nordic and Central
European ventilation markets. The Ventilation Group principally
supplies ventilation products for residential and commercial
ventilation applications. The OEM (Torin-Sifan) division supplies
motors, fans and blowers to OEMs of heating and ventilation
products for both residential and commercial construction
applications in Europe.
For more information, please go to: www.volutiongroupplc.com
Legal Entity Identifier: 213800EPT84EQCDHO768
APPICES
Appendix A: Directors' Responsibility Statement
The following Directors' Responsibility Statement is extracted
from page 88 of the Annual Report and Accounts 2017 and is repeated
in this announcement solely for the purpose of complying with DTR
6.3.5 (2) (b). The statement relates to the full Annual Report and
Accounts 2017 and not the extracted information contained in this
announcement:
The Directors are responsible for preparing the Annual Report
and the Group and parent company financial statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare Group and parent
company financial statements for each financial year. Under that
law they are required to prepare the Group financial statements in
accordance with IFRS as adopted by the EU and applicable law and
have elected to prepare the parent company financial statements in
accordance with IFRS as adopted by the EU.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and parent company and of
their profit or loss for that period. In preparing each of the
Group and parent company financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether the Group and parent company financial statements
have been prepared in accordance with IFRS as adopted by the
EU; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and the
parent company will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent
company's transactions and disclose with reasonable accuracy at any
time the financial position of the parent company and enable them
to ensure that its financial statements comply with the Companies
Act 2006. They have general responsibility for taking such steps as
are reasonably open to them to safeguard the assets of the Group
and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a strategic report, directors' report,
directors' remuneration report and corporate governance statement
that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the UK governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
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 Group and the undertakings included in the consolidation
taken as a whole; and
-- the Strategic Report and the Directors' Report include a fair
review of the development and performance of the business and the
position of the issuer and the undertakings included in the
consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face; and
-- the Annual Report, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Company's performance, business model
and strategy.
By order of the Board
Ronnie George
Chief Executive Officer
10 October 2017
Ian Dew
Chief Financial Officer
10 October 2017
Appendix B: Principal Risks and Uncertainties
The following is extracted from pages 32 to 37 of the Annual
Report and Accounts 2017 and is repeated in this announcement
solely for the purpose of complying with DTR 6.3.5 (2) (b). The
information relates to the full Annual Report and Accounts 2017 and
not the extracted information contained in this announcement:
The Board is committed to protecting and enhancing the Group's
reputation and assets, while safeguarding the interests of
shareholders. It has overall responsibility for the Group's system
of risk management and internal control.
The Group's businesses are affected by a number of risks and
uncertainties. These may be impacted by internal and external
factors, some of which we cannot control. Many of the risks are
similar to those found by comparable companies in terms of scale
and operations.
The risks and uncertainties facing the Group have also been
considered in the context of the UK leaving the European Union.
Whilst negotiations continue between the UK and the European Union,
it is still too early to judge the long-term implications, and at
the current time we consider that the principal risks affecting the
Group are unchanged. The Board will, however, continue to closely
monitor market conditions and will react accordingly.
Our approach
Risk management and maintenance of appropriate systems of
control to manage risk are the responsibilities of the Board and
are integral to the ability of the Group to deliver on its
strategic priorities. The Board has developed a framework of risk
management which is used to establish the culture of effective risk
management throughout the business by identifying and monitoring
the material risks, setting risk appetite and determining the
overall risk tolerance of the Group. This framework of risk
management has been enhanced this year and additional processes
have been introduced across the Group which will assist the Board
to monitor and assess the principal risks throughout the year. In
addition, to enhance risk awareness, embed risk management and gain
greater participation in managing risk across the Group, a
programme of employee communication commenced during the year.
The Group's risk management systems are monitored by the Audit
Committee, under delegation from the Board. The Audit Committee is
responsible for overseeing the effectiveness of the internal
control environment of the Group.
BDO LLP (BDO) continued to act in the capacity of internal
auditor and provide independent assurance that the Group's risk
management, governance and internal control processes are operating
effectively. BDO continued to act in this capacity throughout the
financial year ended 31 July 2017.
Identifying and monitoring material risks
Material risks are identified through a detailed analysis of
individual processes and procedures (bottom-up approach) and a
consideration of the strategy and operating environment of the
Group (top-down approach).
The risk evaluation process begins in the operating businesses
with a biannual exercise undertaken by management to identify and
document the significant strategic, operational, financial and
accounting risks facing the businesses. This process ensures risks
are identified and monitored and management controls are embedded
in the businesses' operations.
The risk assessments from each of the operating businesses are
then considered by Group management, which evaluates the principal
risks of the Group with reference to the Group's strategy and
operating environment for review by the Board.
Our principal risks and uncertainties
The UK Corporate Governance Code (the Code) states that the
Board is responsible for determining the nature and extent of the
principal risks it is willing to take in achieving its strategic
objectives and that it should maintain sound risk management and
internal control systems. In accordance with provision C.2.1 of the
Code, the Directors confirm that they have carried out a robust
assessment of the principal risks facing the Group, including those
which would threaten the business model, future performance,
solvency or liquidity.
Set out in this section of the Strategic Report are the
principal risks and uncertainties which could affect the Group and
which have been determined by the Board, based on the robust risk
evaluation process described above, to have the potential to have
the greatest impact on the Group's future viability. These risks
are similar to those reported last year, although with some
movement on the direction of the perceived risk. For each risk
there is a description of the possible impact of the risk to the
Group, should it occur, together with strategic consequences and
the mitigation and control processes in place to manage the risk.
This list is likely to change over time as different risks take on
larger or smaller significance.
Risk Impact Strategic Likelihood Potential Risk Direction Mitigation
consequence impact
-------------- --------------------- ---------------- ----------- ---------- --------------- ---------------------
Economic Demand for Our ability Possible High Stable Geographic spread
risk our products to achieve from our
including serving the our ambition Trading international
the UK exit residential for continuing patterns acquisition
from the and commercial organic growth during strategy helps
EU. construction would be the year to mitigate
markets would adversely have remained the impact of
A decline decline. This affected. stable local fluctuations
in general would result including in economic
economic in a reduction any which activity.
activity in revenue may be
and/or a and profitability. attributed New product
specific to the development,
decline decision the breadth
in activity to leave of our product
in the the EU. portfolio and
construction the strength
industry, and specialisation
including, of our sales
but not forces should
exclusively, allow us to
an economic outperform against
decline a general decline.
caused by
the UK We are heavily
leaving exposed to the
the European RMI market,
Union. which is more
resilient to
the effects
of general economic
decline affecting
the construction
industry. This
remains true
even under current
circumstances
where conditions
specific to
the public RMI
market mean
that our sales
in that sector
have recently
declined.
Our business
is not capital
intensive and
our operational
flexibility
allows us to
react quickly
to the impact
of a decline
in volume.
-------------- --------------------- ---------------- ----------- ---------- --------------- ---------------------
Acquisitions. Revenue and Our strategic Possible Medium Stable The ventilation
profitability ambition industry in
We may fail would not to grow by We continue Europe is fragmented
to identify grow in line acquisition to implement with many
suitable with management's may be our strategy, opportunities
acquisition ambitions compromised. completing to court acquisition
targets and investor two targets.
at an expectations. acquisitions
acceptable during Senior management
price or Failure to the year. has a clear
we may fail properly integrate understanding
to complete a business of potential
or properly may distract targets in the
integrate senior management industry and
the from other a track record
acquisition. priorities of ten acquisitions
and adversely over the past
affect revenue five years.
and profitability.
Management is
Financial experienced
performance in integrating
could be impacted new businesses
by failure into the Group.
to integrate
acquisitions Our policy of
and to secure rigorous due
possible synergies. diligence prior
to acquisition
and a structured
integration
process post
acquisition
has been maintained.
-------------- --------------------- ---------------- ----------- ---------- --------------- ---------------------
Foreign The commerciality Our ambition Likely Medium Increasing. Significant
exchange of transactions to grow transactional
risk. denominated internationally Our policy risks are hedged
in currencies through on foreign by using forward
The exchange other than acquisition currency currency contracts
rates between the functional exposes us risk has to fix exchange
currencies currency of to increasing remained rates for the
that we our businesses levels of unchanged. ensuing financial
use may and/or the translational year.
move perceived foreign Our exposure
adversely. performance exchange to the Revaluation
of foreign risk. translation of foreign
subsidiaries effect currency-denominated
in our of foreign assets and
Sterling-denominated earnings liabilities
consolidated has increased is partially
financial following hedged by
statements the corresponding
may be adversely acquisition foreign currency
affected by of VoltAir bank debt.
changes in System
exchange rates. in Sweden
during
the year.
-------------- --------------------- ---------------- ----------- ---------- --------------- ---------------------
IT Systems Failure of We could Possible Medium Increasing Disaster recovery
including our IT and temporarily and data backup
cyber breach. communication lose sales We believe processes are
systems could and market there in place, operated
We may be affect any share and is an diligently and
adversely or all of could increasing tested regularly.
affected our business potentially risk as
by a processes damage our the frequency A significant
breakdown and have significant reputation and Enterprise Resource
in our IT impact on for customer sophistication Planning system
systems our ability service. of upgrade is underway
or a failure to trade, cyberattacks for several
to properly collect cash on businesses key sites, managed
implement and make payments. has been by a dedicated
any new increasing. team of experienced
systems. senior employees
from the business.
A disaster failover
site has been
implemented.
We have a
three-layered
system of network
security protection
against cyberattack
or breaches
of security.
This infrastructure
is maintained
to withstand
the increasingly
sophisticated
worldwide cyber
threats. We
also undertake
regular cyber
security testing.
-------------- --------------------- ---------------- ----------- ---------- --------------- ---------------------
Customers. Any deterioration Our organic Possible Medium Stable We have strong
in our relationship growth brands, recognised
A significant with a significant ambitions Our underlying and valued by
amount of customer could would be risk of our end users,
our revenue have an adverse adversely losing and this gives
is derived significant affected. the revenue us continued
from a small effect on of any traction through
number of our revenue one customer our distribution
customers from that continues channels and
and from customer. unchanged; with consultants
our however, and specifiers.
relationships our recent
with heating acquisitions We have a very
and have further wide range of
ventilation served ventilation
consultants. to diversify and ancillary
We may fail our customer products that
to maintain base. enhance our
these brand proposition
relationships and make us
. a convenient
"one--stop-shop"
supplier.
We continue
to develop new
and existing
products to
support our
product portfolio
and brand
reputation.
We provide an
excellent level
of customer
service.
-------------- --------------------- ---------------- ----------- ---------- --------------- ---------------------
Legal and The shift Our organic Possible Medium Stable We participate
Regulatory towards higher growth in trade bodies
environment. value-added ambitions There that help to
and more may be has been influence the
Changes energy-efficient adversely no significant regulatory
in laws products may affected. new environment
or regulation not develop legislation in which we
relating as anticipated We may need or regulation, operate and
to the carbon resulting to review or changes as a consequence
efficiency in lower sales our acquisition to current we are also
of buildings, and profit criteria legislation well placed
the growth. to reflect or regulation, to understand
efficiency the dynamics which future trends
of electrical If our products of a new has had, in our industry.
products, are not compliant regulatory or could
or compliance and we fail environment. have, We are active
may change. to develop a material in new product
new products We may have impact development
in a timely to redirect on the and have the
manner we our new product business. resource to
may lose revenue development react to and
and market activity. anticipate necessary
share to our changes in the
competitors. specification
of our products.
Failure to
manage certain We employ internal
compliance specialist
risks adequately expertise,
could lead supported where
to death or needed by suitably
serious injury qualified and
of an employee experienced
or third party, external providers.
and/or penalties Local operational
for non-compliance compliance audits
in health are undertaken.
and safety,
anti-bribery, We have training
data protection and awareness
or competition programmes in
law. place such as
health and safety
and anti-bribery.
We have a
whistleblowing
hotline managed
by an independent
third party
providing employees
with a process
to raise
non-compliance
issues.
-------------- --------------------- ---------------- ----------- ---------- --------------- ---------------------
Supply chain Sales and Organic growth Unlikely Medium Stable We establish
and raw profitability may be reduced. long-term
materials. may be reduced Our pattern relationships
during the Our product of purchasing with key suppliers
Raw materials period of development and to promote
or components constraint. efforts may relationships continuity
may become be redirected with our of supply and
difficult Prices for to find long-term where possible
to source the input alternative supplier we have alternative
because material may materials base remains sources identified.
of material increase and and components. unchanged.
scarcity our costs
or disruption may increase. Our policy
of supply. of ensuring
a resilient
supply
base remains
a priority.
-------------- --------------------- ---------------- ----------- ---------- --------------- ---------------------
Innovation. Scarce development Our organic Possible Low Stable Our product
resource may growth innovation is
We may fail be misdirected ambitions We continue driven by a
to innovate and costs depend in to demonstrate deep understanding
commercially incurred part upon innovation of the ventilation
or unnecessarily. our ability with new market and its
technically to innovate product economic and
viable Failure to new and launches, regulatory drivers.
products innovate may improved and a The Group starts
to maintain result in products number with a clear
and develop an ageing to meet and of awards marketing brief
our product product portfolio create market were received before embarking
leadership which falls needs. In during on product
position. behind that the medium the year. development.
of our competition. term, failure
to innovate
may result
in a decline
in sales
and
profitability.
-------------- --------------------- ---------------- ----------- ---------- --------------- ---------------------
People. Skilled and Our Possible Low Stable Regular employee
experienced competitiveness appraisals allow
Our employees and growth There two-way feedback
continuing may decide potential, have been on performance
success to leave the both organic no significant and ambition.
depends Group, potentially and inorganic, changes
on retaining moving to could be to the A Management
key personnel a competitor. adversely supply Development
and affected. and retention Programme was
attracting Any aspect of quality initiated in
skilled of the business employees. 2013 (with the
individuals. could be impacted latest to be
with resultant launched in
reduction late 2017) to
in prospects, provide key
sales and employees with
profitability. the skills needed
to grow within
the business
and to enhance
their contribution
to the business.
The Group aims
to reward and
incentivise
employees
competitively.
-------------- --------------------- ---------------- ----------- ---------- --------------- ---------------------
Appendix C: Related Party Transactions
The following description of related party transactions
involving the Company and its subsidiaries during the financial
year ended 31 July 2017 is extracted from page 137 of the Annual
Report and Accounts 2017 and is repeated in this announcement
solely for the purpose of complying with DTR 6.3.5 (2)(b):
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 2017
or 31 July 2016.
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.
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 (see pages 67 to 84).
Compensation of key management personnel
2017 2016
====================================
GBP000 GBP000
==================================== ====== ======
Short-termemployeebenefits 2,714 2,292
Share-basedpaymentchange(seenote32) 512 389
==================================== ====== ======
Total 3,226 2,681
==================================== ====== ======
Key management personnel is defined as the CEO, the CFO and the
ten (2016: nine) individuals who report directly to the CEO.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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