2021 - Final Results For Year Ended 31st October
Velocity Composites plc (AIM: VEL), the leading supplier of composite material kits to aerospace and other high-performance manufacturers, has today announced the Company’s audited results for the twelve months to 31 October 2021
- Revenue of £9.8m (2020: £13.6m) reflecting suppressed civil aircraft OEM volume productions because of Covid
- Gross margin improved 8.9% to 26.0% (2020: 17.1%) due to proactive management of previously written down stock, and investment in Velocity’s nesting technology
- Operating loss reduced to £1.4m (2020: loss of £3.1m)
- Full-year adjusted1 EBITDA loss reduced to £0.5m (2020: loss of £1.9m) in-line with expectations. Difficult decision to reduce workforce enabled break-even at an adjusted EBITDA level in H2 2021
- Gross cash balances of £3.5m and £0.7m of net cash as at 31 October 2021
1 Earnings before Interest, Tax, Depreciation, Amortisation, Impairment, adjusted for exceptional administrative costs and share based payments. The business uses this Alternative Performance Measure to appropriately measure the underlying business performance, as such it excludes costs associated with non-core activity.
- All major customers renewed and extended long-term contracts
- Focus on cost management and the integration of new proprietary digital technology to aid the delivery of future growth
- Enhancement of nesting and traceability production system to permit larger, multi raw material batch nests containing more kits to improve material efficiency. This system provides benefits for existing business, and future managed services
- Developed production into a “digital cell” based structure where the entire kit manufacturing software and hardware is contained within identical modules. These can be deployed internally at Velocity or remotely at a customer site
Andy Beaden, Chairman of Velocity, said: “In the global storm of the pandemic, our innovative technology and engineering skills have shone through. Over the last twelve months, the team has worked tirelessly with all our major customers to renew and extend our valuable long-term contracts, building deeper technical relationships with new and existing clients. This has laid the foundations for both our recovery and future growth.
“We believe it will take time for civil aircraft build rates to recover fully, potentially three to four years before we return to, or exceed, the long-term growth trends. However, new aircraft as they are built (including those designed to be electrically powered) will be more composite intensive. Velocity’s growth will come from new business and the recovery in our current contracted business volumes. That recovery will start in 2022 and we expect it to accelerate into 2023.
“The shift to electric power means the need to make lighter vehicles and to maximise range is expected to increase the demand for composites in other sectors. We are already in discussions with a variety of new potential customers outside of aerospace, creating long-term opportunities for the Company. “Having been able to maintain investment in the Company’s technology and engineering capabilities in the last year, the Board feel confident in Velocity’s ability to capture future growth opportunities, as we monitor the implications of the pandemic.”
Full RNS and results can be viewed here.
Velocity - +44 (0) 1282 577577 Andy Beaden, Chairman Jon Bridges, Chief Executive Officer Chris Williams, Finance Director
Cenkos (Nominated Adviser and Broker) - +44 (0)20 7397 8900 Ben Jeynes Katy Birkin
SEC Newgate (Financial PR) - +44 (0)7540 106 366 Robin Tozer / Richard Bicknell
Velocity will provide a live investor presentation for the Company’s results for the twelve months to 31 October 2021 via the Investor Meet Company (IMC) platform today at 10.00am.
The online presentation is open to all existing and potential shareholders. Investors can sign up to Investor Meet Company for free and add Velocity Composites plc via - http://www.investormeetcompany.com/velocity-composites-plc/register-investor