Final Results for Year ended 31 October 2022
Velocity Composites plc (AIM: VEL), the leading supplier of composite material kits to aerospace and other high-performance manufacturers, is pleased to announce the Company’s audited results for the twelve months to 31 October 2022.
- Revenue increased 22% to £12.0m (FY21: £9.8m) as the UK civil aerospace market began to recover.
- Gross margin decreased from 26% to 23% due to significant inflationary pressures. This should prove to be temporary as prices increase and efficiencies catch up in the medium term.
- Full year adjusted EBITDA[*] loss of £0.5m (FY21: loss of £0.5m) as anticipated, due to prioritising investment and carrying overheads to achieve long term growth objectives.
- Net cash position of £0.2m as at 31 October 2022 (FY21: £0.9m) reflecting investment in new US facility.
- Development of the Velocity Resource Planning (VRP) system for better controls, more efficient operational scenarios and full traceability from long-term demand or order management to the delivery of composite kits to customers.
- Developing the digitisation of the entire demand and forecasting system, alongside the rollout of the digital cell from the development area into the production area, proving invaluable in managing material supply chain issues in the first half of the year.
- Implementation of a new business system for the non-VRP processes to help with the scalability and standardisation needed as the Company expands into the US.
- Continued to improve existing customer partnerships and targeted new business development in key locations and markets (aerospace, high-end automotive, lightweight transport).
- Five-year Work Package Agreement (“WPA”) signed in December 2022 with GKN Aerospace in the United States worth in excess of US$100 million in revenue over five years as part of US Expansion.
- As a result of the Company’s investments, the business is expected to grow very significantly in the next two years. Growth is largely expected to come in the North American region.
- The Company has contracted UK and US business which, when in full production (at current OEM run rates), will significantly increase revenue.
- Strong pipeline of new business which can also potentially increase revenue even further over the next few years
- Composites will play an important role in reducing the use of fossil fuels through greater fuel efficiency.
Andy Beaden, Chairman of Velocity, said: “As a result of our investments, we expect the business to grow very significantly in the next two years. This growth is largely expected to come in the North American region, and we have designed our new facility in Alabama so it can expand to manage this expected expansion. “To deliver our ambitious targets, we also expect some growth to come from the non-aerospace sector in industries such as high-performance automotive, alternative fuel solutions, and large consumer products. Global defence spending is expected to increase significantly in the next few years, and we believe this will feed further growth and opportunities. With both demand for and the costs of composite materials increasing, there will be greater pressure on manufacturers to save on material wastage, which is at the core of our VRP solution. The Board feel confident in Velocity’s ability to achieve strong growth opportunities over 2023.”
Jon Bridges, CEO, Velocity added: “Our actions in FY22 have prepared the business for a return to growth in FY23 in terms of cost management, targeted investment, a forecasted increase in existing programme production rates and significant new business opportunities in the UK and the US. Our scalable and digital business model will open up opportunities in the global industry at a scale much higher than historic programmes. Our business model is more relevant now as customers look to prioritise their core business post Covid-19, and the industry strives to meet its sustainability targets. Composites will play an important role in reducing the use of fossil fuels through greater fuel efficiency.” 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 (2014/596) 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.
Full RNS can be viewed at: https://www.londonstockexchange.com/news-article/VEL/final-results/15807440 Enquiries:
Velocity Andy Beaden, Chairman Jon Bridges, Chief Executive Officer Adam Holden, Group Finance Director
Tel: +44 (0) 1282 577577
Cenkos (Nominated Adviser and Broker) Katy Birkin Ben Jeynes George Lawson Tel: +44 (0) 20 7397 8900
SEC Newgate (Financial PR) Robin Tozer / George Esmond Harry Handyside
Tel: +44 (0) 7540 106 366 firstname.lastname@example.org