Final Resuts


Final Resuts

Velocity Composites plc (AIM: VEL.L), the leading supplier of advanced composite material kits, announces 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
Andy Beaden, 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.”

Summary & Outlook

It has been a challenging year for all in the aerospace sector, including Velocity, but whilst 2020 has seen significant impact due to Covid-19, it is with a cautious optimism we look to 2021, and beyond, for signs of recovery. Since our last trading update, the business has successfully completed the right-sizing of its cost base in line with latest demand forecasts, whilst continuing its new business focus and maintaining sufficient liquidity for the foreseeable future.

Through a number of new initiatives the business has now reduced the cost-base in line with a £13.5m turnover breakeven business and is in a good position to take advantage of operational gearing as recovery begins, though this is not expected until the second half of 2021. The new customer proposition is continuing to be rolled and is being received very positively by both new and existing customers. Our major customers have all expressed support through engaging in new contract extensions and the opportunity for additional lines of business, starting in 2021. We will be reporting on the progress of these in the next few months. We remain on track to be achieving a break-even position in adjusted-EBITDA* in the second half of this new financial year, as announced in November 2020. As airline travel returns, the industry then expects increases in production rates going into 2022 and beyond, enabling the opportunity for profitable growth at Velocity.

Velocity finishes the year with relatively strong liquidity. With the final year end numbers reflecting a positive net cash position, resulting from efforts to release cash from slow-moving stock and, through extensive forecasting and scenario testing. Post year-end we have also secured an extension to the term of the existing £2.0m CBIL facility, from 2 to 6 years.

Full RNS can be viewed here Final Results


Velocity Composites plc

  • Andy Beaden, Chairman
  • Jon Bridges, Chief Executive Officer
  • Chris Williams, Finance Director +44 (0)1282 577577

Cenkos Securities (Nominated Adviser and Broker)

  • Russell Cook
  • Ben Jeynes +44 (0)20 7397 8900

Please use the following contact details for all media enquiries relating to Velocity Composites.