2020 Annual Report & Financial Statements
Velocity Composites plc is pleased to report its audited results for the year ended 31 October 2020 (“FY20”).
- Revenue down at £13.6m (FY19: £24.3m) impacted by industry-wide effects of Covid-19
- Gross margin decreased to 17.1% for FY20 (FY19: 21.7%) due to provisions made for slow-moving stock reflecting significantly reduced demand on existing contracts
- Operating loss for FY20 of £3.1m (FY19: Loss £0.6m), after charging £0.3m (FY19: £0.7m) of exceptional restructuring costs
- Adjusted EBITDA* loss for FY20 of £1.9m (FY19: Profit £0.8m) due to significant reduction in sales demand of existing contracts and time needed to right-size the business accordingly
- Cash at Bank at 31 October 2020 of £3.3m (FY19: £3.4m)
- Confirmed extension of existing £2.0m Coronavirus Business Interruption Loan (CBIL) term extended from 2 to 6 years (post year-end)
- Appointment of Margaret Amos as an Independent Non-Executive Director and Chris Williams as Chief Financial Officer to the Velocity Board
*Adjusted EBITDA defined as earnings before finance charges, tax, amortisation, depreciation, impairment, share based payments and exceptional restructuring costs. During the year the Group has applied IFRS 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under IAS 17. In the adjusted EBITDA for 2019 the rent payments for those assets now accounted for as Right of Use assets under IFRS 16 have been added back so that both years can be compared. The rent payments are not significantly different to the depreciation charge.
Andy Beaden, Executive Chairman of Velocity, said:
“2020 was a uniquely challenging time for our industry, however, we have used this period to right-size our own business, develop, refocus our senior management team and consolidate our relationships within the supply chain. This has been done successfully and prepares Velocity well for recovery when the sector begins to improve. The recovery will happen, but realistically this will not be until 2022. Though top-line revenue has been compressed, by the reduction in OEM build rates, we are now securing new business and the long term value of our contracts will grow significantly in the years ahead. The pipeline of new opportunities also remains strong, with our existing customers showing their commitment to Velocity’s unique offering.”