DAVY VIEW

Volution’s trading update confirms, as expected, another year of very impressive progress for the group. The group continues to advance, with healthy organic growth supplemented by attractive M&A — with AC Industries the most recent example of the latter. Given updated guidance, we expect to increase our existing EPS forecast for the year to end-July by circa 4%, which is an excellent outcome in the current environment. The stock has largely traded sideways recently (-2% year-to-date), but we believe there is decent upside to play for with no material valuation headwind.