Genuit Group is looking out for acquisitions to drive growth and boost its offering in climate solutions for the built environment, CEO Joe Vorih said.

The UK-based company is considering making bolt-on acquisitions in its core segments, climate management, water management, and sustainable building solutions, as well as in adjacent sectors, Vorih said. Organic growth is also a priority, he said.

“We would like to be cultivating five to ten deals at any given time and have access to a deal or two a year,” he said.

Genuit, which recorded 2024 revenues of GBP 561m, has an extensive list of targets on its radar. Its primary focus is the UK, but it is also considering expanding in Europe through M&A, as well as the US in the long term. There is good scope for consolidation given fragmentation across its core sectors, he said.

Acquisitions will strengthen or complement Genuit’s core offering, Vorih said. UK- and EU-based ventilation and heat recovery technology businesses are high on the agenda, for instance those providing electric heating solutions, pumping and water saving mechanism technologies. “These kinds of climate management companies are in our funnel,” he said.

Water management solutions providers in Europe and the US are also of interest – with US expansion as a longer-term plan, Vorih said.

Genuit is cash generative and can fund M&A using its balance sheet. “The company has around GBP 120m-GBP 150m of balance-sheet firepower utilising committed facilities now to deploy on targets with typically GBP 50m-GBP 100m in Enterprise value [EV],” Vorih said.

The company could easily replenish its war chest, he said. It prefers to finance deals with debt funding to raising equity, given ongoing market volatility, he added.

Genuit had underlying operating cash conversion of 99.3% in 2024, with GBP 91.6m free cashflow. It reduced its net debt from 1.1x to 0.9x pro-forma EBITDA, providing strategic optionality for investment, the company said in its FY24 results statement.

The company’s 2024 revenue was down 2.6% year on year (YoY) from GBP 587m in 2023, due to headwinds in the residential boiler and commercial ventilation markets, per the results statement. Operating margins improved YoY, with 16.4% adjusted operating margin in 2024, compared to 16% in 2023.

Genuit prefers to engage in bilateral deals with founder-led businesses but has also acquired private equity-owned businesses, Vorih said.

In August 2024, Genuit acquired two UK-based companies: Sky Garden, a green-roof technology provider; and Omnie & Timoleon, an underfloor heating board manufacturer, for a combined sum of GBP 5.2m.

President Trump’s ‘Liberation Day’ tariffs are unlikely to directly impact Genuit’s end customers – major house builders and commercial property developers – given that the construction industry is a local-for-local market and Genuit is largely focused on the UK, Vorih said.

“The broader impact [of tariffs] remains to be seen, but we are not too concerned about the first- or second-order impact,” he added.

Despite ongoing headwinds in the building sector, there is cause for optimism in the mid- to long-term with tailwinds including increased government spending on new house building and stricter regulations around building and ventilation standards, which is driving demand in the heating, ventilation and air-conditioning (HVAC) market, Vorih said.

The water-management sector is also set for an influx of investment in the coming five years as part of government plans to improve water quality, he noted.

Leeds-headquartered Genuit was founded in 1980 as Polypipe, a drainage and plumbing specialist. The company listed on the London Stock Exchange (LSE) in 2014. It has a market cap of GBP 999.2m