By George, he’s right! Shares rise as boss buys

JUST over a week ago, Volution chief executive Ronnie George bought 10,000 shares in his firm. The purchase, at 170p a share, cost £17,000 and took his stake in the ventilation business to nearly 3per cent. George called the move as ‘a protest’ – his way of saying that the shares were undervalued.

The stock closed at 178p on Friday so George has already gone some way to proving his point. But brokers who know the firm well believe it has a lot further to go.

Volution makes ventilation products from bathroom extractor fans in bathrooms to sophisticated air purifier systems, increasingly used in new homes, offices and warehouses.

Behind brands such as Vent-Axia, Ventilair and Diffusion, the company has doubled in size over five years – without recourse to shareholders – and George wants to do the same again by 2023, expanding organically and through well-placed acquisitions. The target is well within reach.

Volution listed on the stock market in 2014 at 150p and was recommended by Midas in September that year at 155p. The firm operated mainly in the UK at the time. Today, the UK accounts for less than half group revenues.

The group has a thriving Nordic division and has expanded into Belgium, Germany, the Netherlands and even New Zealand. Its factories export far and wide, from Crete to the Falkland Islands.

George is keen to beef up Volution’s presence in Europe, cement the group’s position in Britain and possibly move into Australia. Regulation is on Volution’s side too. Governments are keen to reduce energy use by making new homes and offices as well insulated as possible. That creates a need for effective ventilation products and Volution makes some of the best on the market. Annual results to July 31 showed an 11 per cent increase in sales to £206million, profits rose 4per cent to £37million and the dividend was up 7 per cent to 4.4p. Analysts expect sales of £230million, profits of £42million and a 4.8p dividend next year with further growth in 2020.