TIDMFAN
RNS Number : 8563P
Volution Group plc
21 October 2021
Thursday 21 October 2021
Volution Group plc
Annual Report and Accounts 2021 and Notice of Annual General
Meeting
Volution Group plc ("Volution", the "Group" or the "Company",
LSE: FAN), a leading international designer and manufacturer of
energy efficient indoor air quality solutions, announces that
following the release on 7 October 2021 of the Company's
Preliminary Announcement of Final Results for the year ended 31
July 2021, it has today posted and made available to shareholders
on its website, www.volutiongroupplc.com the documents listed
below:
-- Annual Report and Accounts 2021
-- Notice of Annual General Meeting 2021
-- Form of Proxy for Annual General Meeting 2021
Copies of these documents are also being submitted to the
Financial Conduct Authority's National Storage Mechanism and will
shortly be available for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
A condensed set of financial statements and information on
important events that have occurred during the year ended 31 July
2021 and their impact on the financial statements, were included in
the Company's Preliminary Announcement of Final Results made on 7
October 2021, 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 2021), constitute the material
required by Disclosure Guidance & Transparency Rule 6.3.5 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
2021.
- ends -
Enquiries:
Volution Group plc
Michael Anscombe, Company Secretary +44 (0) 1293 441562
Legal Entity Identifier: 213800EPT84EQCDHO768.
Note to Editors:
Volution Group plc (LSE: FAN) is a leading international
designer and manufacturer of energy efficient indoor air quality
solutions. Volution Group comprises 19 key brands across three
regions:
UK: Vent-Axia, Manrose, Diffusion, National Ventilation,
Airtech, Breathing Buildings, Torin-Sifan.
Continental Europe: Fresh, PAX, VoltAir, Kair, Air Connection,
Rtek, inVENTer, Ventilair, ClimaRad, ERI Corporation.
Australasia: Simx, Ventair, Manrose.
For more information, please go to: www.volutiongroupplc.com
APPICES
Appendix A: Directors' Responsibility Statement
The following Directors' Responsibility Statement is extracted
from page 120 of the Annual Report and Accounts 2021 and is
repeated in this announcement solely for the purpose of complying
with DTR 6.3.5. The statement relates to the full Annual Report and
Accounts 2021 and not the extracted information contained in this
announcement:
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulation.
The financial statements are prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006 and international financial
reporting standards adopted pursuant to Regulation (EC) No.
1606/2002 as it applies in the European Union and Company financial
statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards,
comprising FRS 101 Reduced Disclosure Framework and applicable
law). 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 Company
and of the profit or loss of the Group and Company for that period.
In preparing the financial statements, the Directors are required
to:
-- select suitable accounting policies and then apply them consistently;
-- state whether applicable IFRSs as adopted by the European
Union have been followed for the Group financial statements and
United Kingdom Accounting Standards, comprising FRS 101, have been
followed for the Company financial statements, subject to any
material departures disclosed and explained in the financial
statements;
-- make judgements and accounting estimates that are reasonable and prudent; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business.
The Directors are also responsible for safeguarding the assets
of the Group and Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Group and Company and enable
them to ensure that the financial statements and the Directors'
Remuneration Report comply with the Companies Act 2006 and, as
regards the Group financial statements, Article 4 of the IAS
Regulation.
The Directors are responsible for the maintenance and integrity
of the Company's website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Directors' confirmations
The Directors consider that the Annual Report and Accounts,
taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Group and
Company's position and performance, business model and
strategy.
Each of the Directors, whose names and functions are listed on
pages 72 and 73, confirms that, to the best of their knowledge:
-- the Company financial statements, which have been prepared in
accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, comprising FRS 101
Reduced Disclosure Framework and applicable law), give a true and
fair view of the assets, liabilities, financial position and profit
of the Company;
-- the Group financial statements, which have been prepared in
accordance with IFRSs as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position and
profit of the Group; and
-- the Directors' Report includes a fair review of the
development and performance of the business and the position of the
Group and Company, together with a description of the principal
risks and uncertainties that they face.
In the case of each Director in office at the date the
Directors' Report is approved:
-- so far as the Director is aware, there is no relevant audit
information of which the Group and Company's auditor is
unaware;
-- they have taken all the steps that they ought to have taken
as a Director in order to make themselves aware of any relevant
audit information and to establish that the Group and Company's
auditor is aware of that information; and
-- the financial statements on pages 130 to 182 were approved by
the Board of Directors on 6 October 2021 and signed on its behalf
by Ronnie George and Andy O'Brien.
On behalf of the Board
Ronnie George
Chief Executive Officer
6 October 2021
Andy O'Brien
Chief Financial Officer
6 October 2021
Appendix B: Principal Risks and Uncertainties
The following is extracted from pages 58 to 67 of the Annual
Report and Accounts 2021 and is repeated in this announcement
solely for the purpose of complying with DTR 6.3.5. The information
relates to the full Annual Report and Accounts 2021 and not the
extracted information contained in this announcement:
The Board is committed to protecting and enhancing the Group's
reputation and assets in the interests of shareholders as a whole,
while having due regard to the interests of all stakeholders. 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 other companies of similar scale and
operations.
The risks and uncertainties facing the Group have been
considered in the context of the continuing Covid-19 pandemic, as
well as the implications from the changes in the trading
relationship between the UK and the European Union (EU) from 1
January 2021. A specific assessment of the potential risks and our
approach to management of these risks can be found on pages 62 to
67
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. To enhance risk awareness,
embed risk management and gain greater participation in managing
risk across the Group, a programme of employee communication
continues with all new employees receiving a brochure on joining
Volution.
The Group's framework of risk management is 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 2021.
Identifying and monitoring material risks
Material risks (including emerging risks) that we consider may
lead to threats to our business model, strategy and liquidity are
identified through our framework of risk management, our 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 an annual 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 2018 UK Corporate Governance Code (the 2018 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 29 of the 2018 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. During this
review we also considered the emerging risks facing the Group, the
main one being the ongoing Covid-19 pandemic, and any impact on our
assessment of principal risks. 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.
Principal Risks
Risk Impact Strategic Likelihood Potential Risk Reason for Mitigation
consequence impact Direction risk direction
Economic Demand for Our ability Possible Medium Decreasing Following Geographic
risk our products to achieve the implementation spread from
serving our ambition of the new our
A decline the for continuing trading relationship international
in general residential organic between the acquisition
economic and commercial growth UK and the strategy helps
activity construction would be European to mitigate
and/or a markets adversely Union, the the impact
specific would decline. affected. well-publicised of local
decline This would issues around fluctuations
in activity result in imports and in economic
in the a reduction exports through activity.
construction in revenue UK ports New product
industry, and have created development,
including, profitability. some input the breadth
but not material of our product
exclusively, supply challenges; portfolio
an economic however, and the strength
decline our order and
caused by intake remains specialisation
the Covid-19 strong, and of our sales
pandemic our asset forces should
and the light and allow us to
new flexible outperform
relationship operating against a
between model continues general decline.
the UK and to be resilient We have a
the EU from in servicing strong presence
1 January demand. in the RMI
2021. Covid-19 market, which
has impacted is more
and will resilient
continue to the effects
to impact of general
economic economic decline
outlook and affecting
confidence the construction
in a number industry.
of regions This remains
in which true even
we operate. under current
That said circumstances.
we believe Our business
that government is not capital
responses intensive
and stimulus and our
packages operational
deployed flexibility
are likely allows us
to continue to react quickly
to be supportive to the impact
and help of a decline
underpin in volume.
demand with
a particular
focus on
energy efficient
and sustainable
technologies
including
ventilation
systems.
Specifically
in the UK,
which remains
our largest
market, the
speed and
success of
the vaccination
programme
and the current
lack of restrictions
have been
positive
for broader
confidence
and sentiment.
--------------- ---------------- ----------- ---------- ----------- --------------------- -----------------
Covid-19 Demand for Our ability Possible Low No change Covid-19 Our product
our products to achieve continues and geographic
Covid-19 serving our ambition to impact diversification
continues the for continuing all aspects assists in
to be a residential organic of society mitigating
significant and commercial growth and in particular the impact
risk to construction would be the economic of local
the economy markets adversely outlook of fluctuations
and impacts could decline. affected. all geographies in economic
many other Our supply in which activity as
risks chain could we operate, a result of
reported be disrupted. the supply Covid-19.
in the Group Our people chain of The regulatory
Risk may be input materials and demand
Register. impacted. and our people. changes
However, developing
the continuing from the
strong performance advantages
of the Group of ventilation
and the regulatory in preventing
and demand transmission
changes developing are assisting
from the the business
advantages in mitigating
of ventilation any potential
in preventing impact of
transmission Covid-19 on
mean the the Group.
overriding
risk of Covid-19
to the business
is not considered
significant.
--------------- ---------------- ----------- ---------- ----------- --------------------- -----------------
Acquisitions Revenue Our strategic Possible Medium No change The potential The ventilation
and ambition continuing industry in
We may fail profitability to grow impact of Europe remains
to identify would not by acquisition Covid-19 fragmented
suitable grow in may be and mitigating with many
acquisition line with compromised. factors set opportunities
targets management's out in the to court
at an ambitions Annual Report acquisition
acceptable and investor 2020 remain targets.
price or expectations. the same. Senior
we may fail Failure Whilst the management
to complete to properly timing and has a clear
or properly integrate opportunity understanding
integrate a business landscape of potential
the may distract for acquisitions targets in
acquisition. senior will vary the industry
management from time and a track
from other to time, record of
priorities we are positive 16 acquisitions
and adversely about the since IPO
affect revenue potential in June 2014.
and range of Management
profitability. opportunities is experienced
Financial in the coming in integrating
performance years as new businesses
could be exemplified into the Group.
impacted by the transactions Our policy
by failure completed of rigorous
to integrate during the due diligence
acquisitions year ended prior to
and to secure 31 July 2021. acquisition
possible and a structured
synergies. integration
process
post-acquisition
have been
maintained.
--------------- ---------------- ----------- ---------- ----------- --------------------- -----------------
Supply chain Sales and Organic Likely Medium Increasing The Covid-19 We establish
and raw profitability growth pandemic long-term
materials may be reduced may be and the associated relationships
during the reduced. potential with key
Raw materials period of Our product for disruption suppliers
or components constraint. development to supply to
may become Prices for efforts chains, especially promote
difficult input may be relating continuity
to source materials redirected to of supply
because may increase to find products and where
of material and our alternative and materials possible we
scarcity costs may materials sourced from have
or disruption increase. and components. China, continues alternative
of supply, Operational to be a specific sources
including excellence risk that identified.
as a may be we are managing We continue
consequence adversely very closely. to monitor
of the affected. Potential stock levels
Covid-19 impacts could and order
pandemic include inability patterns and
and the to service where deemed
new customer necessary
relationship demand due will adjust
between to non-availability inventory
the UK and of products, levels to
the EU from as well as help
1 January input cost mitigate any
2021. increases disruptions
The increased due principally in supply.
friction to the
and potential potential
for a "trade need to air
war" and freight.
disputes
primarily
between
the US and
China could
also
destabilise
supply chain
activity.
--------------- ---------------- ----------- ---------- ----------- --------------------- -----------------
Foreign The Our ambition Likely Medium Increasing Covid-19 Significant
exchange commerciality to grow has impacted transactional
risk of internationally the customer risks are
transactions through demand and hedged by
The exchange denominated acquisition supply chain using forward
rates between in currencies exposes patterns, currency
currencies other than us to which could contracts
that we the functional increasing lead to to fix exchange
use may currency levels unpredictable rates for
move of our of hedging of the ensuing
adversely. businesses translational currencies. financial
and/or the foreign We believe year.
perceived exchange that the Revaluation
performance risk. increased of foreign
of foreign economic currency
subsidiaries uncertainty denominated
in our in the context assets and
Sterling of Covid-19 liabilities
denominated and Brexit is partially
consolidated makes it hedged by
financial likely that corresponding
statements in the near foreign currency
may be term exchange bank debt.
adversely rates may
affected continue
by changes to see heightened
in exchange levels of
rates. volatility.
--------------- ---------------- ----------- ---------- ----------- --------------------- -----------------
IT Systems Failure We could Possible Medium No change We believe Disaster
including of our IT temporarily that when recovery
cyber breach and lose sales the Covid-19 and data backup
communication and market pandemic processes
We may be systems share and struck the are in place,
adversely could affect could risk increased operated
affected any or all potentially as there diligently
by a of our damage was the potential and tested
breakdown business our reputation for: regularly.
in our IT processes for customer -- new risks A significant
systems and have service. linked to Enterprise
or a failure significant employees Resource
to properly impact on working from Planning
implement our ability home; and system has
any new to trade, -- an increase been implemented
systems. collect in targeted for several
cash and phishing key sites.
make payments. campaigns A disaster
and failover site
fraud attempts. has been
However, implemented.
this risk We have a
is deemed three-layered
to have stabilised system of
during 2021. network security
protection
against
cyberattack
or breaches
of security.
This
infrastructure
is maintained
to withstand
increasingly
sophisticated
worldwide
cyber threats.
We also
undertake
regular cyber
security testing
and training
of our
employees.
We have
commenced
a process
of annual
internal and
external
penetration
testing with
quarterly
monitoring
checks.
--------------- ---------------- ----------- ---------- ----------- --------------------- -----------------
Customers Any Our organic Possible Low No change Covid-19 We have strong
deterioration growth increased brands,
A significant in our ambitions the risk recognised
amount of relationship and operational that customers and valued
our revenue with a excellence could fall by our end
is derived significant would be into financial users, and
from a small customer adversely difficulties this gives
number of could have affected. or change us continued
customers an adverse the way they traction through
and from significant do business, our distribution
our effect on moving to channels and
relationships our revenue more online with consultants
with heating from that trading and and specifiers.
and customer. a reduction We have a
ventilation in stock very wide
consultants. levels. range of
We may fail However, ventilation
to maintain this risk and ancillary
these is deemed products that
relationships to have stabilised enhance our
. during 2021. brand
proposition
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 focus on
providing
excellent
customer
service.
--------------- ---------------- ----------- ---------- ----------- --------------------- -----------------
Regulatory The shift Our organic Possible Medium Decreasing Covid-19 We participate
environment towards growth has further in trade bodies
higher ambitions heightened that help
Laws or value-added may be consumer to influence
regulation and more adversely and the regulatory
relating energy affected. regulator/government environment
to the carbon efficient We may awareness in which we
efficiency products need to of air quality operate and
of buildings, may not review and the role as a consequence
the develop our acquisition ventilation we are also
efficiency as anticipated criteria can play. well placed
of electrical resulting to reflect We therefore to understand
products in lower the dynamics believe that, future trends
and sales and of a new in addition in our industry.
compliance profit growth. regulatory to the already With the
may change. If our environment. supportive proposed
products We may regulatory UK Future
are not have to backdrop Homes Standard
compliant redirect and drivers and the European
and we fail our new around carbon Green Deal
to develop product and energy along with
new products development efficiency, Healthy Homes
in a timely activity. Covid-19 Standards
manner we is placing (HHS) in New
may lose additional Zealand,
revenue emphasis favourable
and market on governments regulatory
share to developing tailwinds
our appropriate have continued
competitors. regulations to develop.
in support This is
of improving especially
indoor air true since
quality. the outbreak
We believe of Covid-19.
this risk We are active
has reduced in new product
during 2021 development
and the regulatory and have the
environment resource to
has presented react to and
Volution anticipate
with opportunities. necessary
changes in
the
specification
of our products.
--------------- ---------------- ----------- ---------- ----------- --------------------- -----------------
Innovation Scarce Our organic Possible Low No change Covid-19 Our product
development growth has not impacted innovation
We may fail resource ambitions our innovation is driven
to innovate may be depend process. by a deep
commercially misdirected in part understanding
or and costs upon our of the
technically incurred ability ventilation
viable unnecessarily. to innovate market and
products Failure new and its economic
to maintain to innovate improved and regulatory
and develop may result products drivers. The
our product in an ageing to meet Group starts
leadership product and create with a clear
position. portfolio market marketing
which falls needs. brief before
behind that In the embarking
of our medium on product
competition. term, failure development.
to innovate
may result
in a decline
in sales
and
profitability.
Operational
excellence
may be
adversely
affected.
--------------- ---------------- ----------- ---------- ----------- --------------------- -----------------
People Skilled Our Unlikely Medium Decreasing The Covid-19 Regular employee
and competitiveness pandemic appraisals
Our experienced and growth has increased allow two-way
continuing employees potential, the risk feedback on
success may decide both organic to the health performance
depends to leave and inorganic, and wellbeing and ambition.
on retaining the Group, could be of our employees A Management
key personnel potentially adversely and we have Development
and moving to affected. taken appropriate Programme
attracting a competitor. Operational steps across is run
skilled Any aspect excellence our business periodically
individuals. of the may be to minimise to provide
business adversely this risk. key employees
could be affected. There have with the skills
impacted been no significant needed to
with resultant changes to grow within
reduction the supply the business
in prospects, and retention and to enhance
sales and of employees their
profitability. across the contribution
wider workforce to the business.
since the Succession
Covid-19 planning and
outbreak. key roles
Our continuing are regularly
growth has reviewed by
increased the Directors.
the size
and complexity
of our business.
--------------- ---------------- ----------- ---------- ----------- --------------------- -----------------
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 2021 is extracted from page 169 of the Annual
Report and Accounts 2021 and is repeated in this announcement
solely for the purpose of complying with DTR 6.3.5:
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 2021 or 31
July 2020.
There were no material transactions or balances between the
Company and its key management personnel or members of their close
family other than the compensation shown below. 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 97 to
116).
Compensation of key management personnel
2021 2020
GBP000 GBP000
------- -------
Short-term employee benefits 4,139 2,749
------- -------
Share-based payment change (see note 34) 1,605 58
------- -------
Total 5,744 2,807
------- -------
Key management personnel is defined as the CEO, the CFO and the
eleven (2020: eleven) individuals who report directly to the
CEO.
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ACSGZMZGDMKGMZM
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October 21, 2021 10:09 ET (14:09 GMT)
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