Velocity Composites plc, the leading supplier of advanced composite material kits, providing engineering value-solutions for the global aerospace industry, is pleased to announce its interim results for the six months ended 30 April 2018.

Highlights

Financial

• Continued revenue growth up 25% to £11.6m (H1 FY17 £9.3m)
• Gross profit delivered a contribution of £1.8m (H1 FY17 £1.9m)
• Overall gross margin for period of 15.2%, with continued improvements resulting in gross margin in April of 18.2%
• Operating loss of £919k (H1 FY17 £208k), reflecting continued investment in international growth
• At 30 April 2018, cash on balance sheet of £5.8m, net cash of £4.2m

Operational

• NADCAP special process accreditation in March 2018 for Composites scope KSP (Kitting Service Provider)
• Long term agreement with existing customer for Boeing 737 Max programme through to December 2021
• Long term agreement with new European customer for LEAP engines for Airbus A320 NEO and Boeing 737 Max programmes through to December 2020

Outlook

• Board remains confident of meeting the market’s revised full year expectations, subject to customer demand fluctuations
• Customer and programme pipeline remains strong with over 60% of FY19 revenue market expectations and over £60m of business for the remainder of FY18 through to FY20 under contract.

Jon Bridges, Chief Executive Officer of Velocity said:

“The six months ended 30 April 2018 have seen growth during a period for the industry incorporating a significant degree of consolidation and corporate change, with the resultant delays in contract award experienced by the Company, as previously announced. We continue to successfully execute our growth strategy through delivering new contract wins and look to progress new manufacturing sites in Europe and further afield.”

“The first half of the year has seen growing demand for our services as the aerospace composites industry continues to look to “make more for less”, and hence our customers look for new ways to reduce the cost of manufacture, both in the supply chain and their own manufacturing areas. The gross profit contribution in the period reflects the onboarding of new programmes and customer consumption experienced, with a recovering position in recent months, which was reflected in the revised market forecasts.”

“We continue to work through and respond to Request For Quotations (“RFQs”) from a range of large, global new and existing customers. Velocity has a clear strategy to capitalise on this growth opportunity and as such, the Board remains confident of meeting the market’s revised full year expectations, subject to customer demand fluctuations.”

A full copy of the interim report can be downloaded on our Reports & Presentations page.