Unaudited Half Year Results
Velocity Composites plc (AIM: VEL), the leading supplier of advanced composite material kits to aerospace and high-performance manufacturers, is pleased to announce the Company’s unaudited results for the six months to 30 April 2022.
- Revenue of £5.9m (2021: £4.4m) as aerospace sales volumes stabilised post Covid-19.
- Gross margin of 23.5% (2021: 25.1%) - reflecting some contractual margin squeeze and short term labour inefficiencies as the Group begins to increase staffing following recovery.
- Adjusted EBITDA1 loss reduced to £0.2m (2021: loss of £0.6m).
- Loss before tax reduced to £0.7m (2021: loss of £1.1m).
- Cash at bank as at 30 April 2022 of £2.0m (30 April 2021: £3.5m). To support growth, additional £2.5m available through Invoice Discounting Facilities.
1 Adjusted EBITDA defined as 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 activities.
- Strong pipeline of new business, especially in North America. The Group has invested in people resource with a renewed focussed on growth.
- Contracted sales encouraging with signs of recovery as confidence in the aviation sector improves.
- Work continues on internal process technology to improve labour productivity and material utilisation in the second half, as higher production rates enable greater efficiencies through 2023 and 2024.
- Continued investment and development of the Company’s technology - with roll-out of new “Digital Manufacturing Cell” expected in second half to underpin margin delivery.
Andy Beaden, Chairman of Velocity, said:
“Over the last six months, we have seen signs of recovery in the global aerospace industry, which is starting to reflect in our manufacturing sales volumes. Further growth is expected over the next 12-18 months.
“Our technology innovation is aimed at providing both material and labour efficiencies, which in turn benefits both our customers and our own margins. Though there has been some small margin squeeze with labour inflation and customer pricing pressures, we believe our innovations should ensure we maintain our long term margin and profit objectives. These steps include the internal deployment of a new “Digital Manufacturing Cell” later this year that utilises Industry 4.0 technology to increase the size and efficiency of our production batches while digitising and standardising production processes in real-time to improve labour productivity.
“Despite the challenges we have faced due to the pandemic, we have sustained investment in R&D and business development as the aviation sector recovers. We have continued our expansion efforts in Europe and North America and expect to see progress in H2 2022 through rolling out our solutions to support more customer facilities. We have had some initial success with customers outside the aerospace industry, including automotive. Increased use of composites will be key to delivering net zero in many industries. We will continue to work with our customers and partners to investigate revenue streams where our technology can drive operational efficiency and margins for the company.”
Certain of the information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK version of the EU Market Abuse Regulation 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended and supplemented from time to time. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
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Velocity Composites - +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
SEC Newgate (Financial PR) - +44 (0)7540 106 366
Robin Tozer / Richard Bicknell