REG - Velocity Composites - Half-Year Results
09/07/2024 07:00
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RNS Number : 5843V Velocity Composites PLC 09 July 2024
9 July 2024
VELOCITY COMPOSITES PLC
("Velocity", the "Company", the "Group")
Unaudited Half Year Results for the six months ended 30 April 2024
On track to achieve profitability and be cash generative in H2 FY24
Velocity Composites plc (AIM: VEL), the leading supplier of composite material
kits to aerospace, is pleased to announce the Company's unaudited results for
the six months ended 30 April 2024.
Financial Highlights:
· Revenue increased 53.9% to £10.7m (2023: £7.0m) with UK sales up 4% and a
£3.6m contribution from the US as programmes continue to transfer and ramp up
· Gross margin was 22.5% (2023: 21.8%) with UK margins slightly lower and US
margins benefitting from increasing site utilisation as the programmes
transfer
· EBITDA loss of £0.2m (2023: £0.9m loss)
· Loss before tax of £1.1m (2023: £1.4m loss)
· Cash at bank as at 30 April 2024 of £1.8m (30 April 2023: £1.2m)
· Net cash of £0.6m (H1 FY23: net debt of £1.7m)
· UK invoice discounting facility of £3m is undrawn
Operating Highlights:
· As announced on 11 March 2024, the Company received OEM approval for phase 4
of the First Article Inspection ("FAI") process. As at 22 May 2024, Velocity
has completed FAIs which enable the Company to satisfy 91% of FY24 US revenue
and 85% of FY25 US revenue, with the remainder expected to be completed in
FY24. This supports the £79m in revenue expected under this US Contract over
the five years from 1January 2024.
· Robert (Rob) Smith was appointed to the Board as Group Chief Financial Officer
(CFO) and Company Secretary, on 3 June 2024.
Outlook:
· Group guidance for FY24 remains unchanged, with H2 revenue attributable to
inflationary price rises for existing contracts taking effect and production
rates increasing in the US facility.
· In line with previous guidance, Company expects to be profitable and cash
generative in H2 FY24 underpinned by contracted revenues for FY24 of £27m
(FY23: £16.4m) growing to £33m in FY25.
· OEMs continue to announce increases in long term production rates. For
example, Airbus 350 rates are set to double for 2028.
· Price increases continue to be agreed to reflect previous cost increases and
these are expected to be in balance by end of FY24, along with extensions in
UK customer agreements.
· US demand on current contracts continues to be strong with the potential to
exceed the original $20m expectation in FY25.
· Issues at Boeing and its supply chain have had no impact on the Company's FY24
revenue or forecasts
· The Board is confident that it will meet market expectations for the full
year.
Andy Beaden, Chairman, Velocity, said: "The successful onboarding process of
our first US customer, and increasing global production rates in the aerospace
industry mean that we are on track to be profitable and cash generative in the
second half. The Board is confident that it will meet market expectations for
the full year. The first US project is delivering the expected efficiency
gains to the customer which acts as a show case for future large-scale
projects. The industry trends of increasing use of composites to meet net
zero targets, and greater outsourcing as manufacturers look to reduce costs
means Velocity is primed for a successful future. We have a large, qualified
pipeline of potential contracts in the US and Europe of £200m, which makes us
excited about the Company's long-term prospects."
Enquiries:
Velocity Composites plc +44 (0) 1282 577577
Andy Beaden, Chairman
Jon Bridges, Chief Executive Officer
Rob Smith, Group Chief Financial Officer
Canaccord Genuity Limited +44 (0) 20 7523 8000
Nominated Adviser and Joint Broker
Max Hartley
George Grainger
Dowgate Capital Limited +44 (0) 20 3903 7715
Joint Broker
Russell Cook
Nick Chambers
SEC Newgate +44 (0)7540 106 366
Financial Communications velocity@secnewgate.co.uk
Robin Tozer
George Esmond
Harry Handyside
About Velocity Composites plc
Based in Burnley, UK, Velocity is the leading supplier of composite material
kits to aerospace, that reduce costs and improve sustainability. Customers
include Airbus, Boeing, and GKN.
By using Velocity's proprietary technology, manufacturers can also free up
internal resources to focus on their core business. Velocity has significant
potential for expansion, both in the UK and abroad, including into new market
areas, such as wind energy, urban air mobility and electric vehicles, where
the demand for composites is expected to grow.
Chairman's Statement
Overview
The first six months has been one of further operational and financial
progress. Group guidance for FY24 remains unchanged, with H2 revenue growing
through increasing production rates on the US Contract, where we have
substantially completed the extensive onboarding and approval processes of new
business at our new facility in Alabama. H2 revenue has also benefited from
price rises for existing contracts to recover the impact of cost inflation.
I am pleased to report that we are on track to be profitable and cash
generative in the next six months underpinned by our contracted revenues for
FY24 of £27m (FY23: £16.4m) growing to £33m in FY25.
Across the global aerospace industry, production rates continue to recover.
Airbus has announced a doubling of A350 production rates through to 2027. The
Company is continuing to work on securing additional contracts and has live
bids in with customers in the US and in Europe. Although progress has slowed
in some cases in the US due to the well-publicised issues with Boeing, these
issues have no impact on the Company's contracted revenues for FY24 or FY25.
The industry's biggest challenge is to now increase production rates in civil
and military aircraft, to meet longer term demand. Back-logs on order books
have grown and our services can support the need for sustainable and efficient
production expansion at Tier 1 and OEM level. There is clear long-term demand
for the productivity gains our services provide.
Velocity has a balanced pipeline of current and prospective contracts, civil
and defence sectors, and is focusing on non-Boeing customer engagement in the
short term in the US and winning additional business with existing European
customers.
Financial Performance
Revenue during the period increased 53.9% to £10.7m (2023: £7.0m) as
production rates have increased on the Company's initial major US contract.
Price increases have been agreed with key customers and will provide greater
benefit in the second half.
Gross Margin rose to 22.5% (2023: 21.8%). Investments in the new US facility
in Alabama began to bear fruit. Margins will continue to improve in H2 with
the benefit of inflationary price increases, to recover inflationary cost
increases and the US volumes increasing further, which gives better recovery
against fixed costs.
As planned, administrative expenses of £3.3m were 18% higher (£0.5m) than
FY23 with all of the increase in cost relating to the higher US overheads and
depreciation following the investment.
EBITDA loss was £0.2m (2023: loss of £0.9m), with the expectation that the
Company will have positive EBITDA and Profit before tax in H2. The operating
loss reduced, as the US production increased. In H1 there was still some
impact of the lag in cost inflation versus price increases, we expect this to
reverse in the remainder of the year.
The loss before tax reduced to £1.1m (2023: loss of £1.4m). This was reduced
to £0.7m after recovery of the R&D tax credits. We remain on track to
achieve an operating profit in H2.
Cash at bank as at 30 April 2024 was £1.8m (30 April 2023: £1.2m), with net
cash of £0.6m (H1 FY23: net debt of £1.7m). US working capital has been
supported by supply chain finance lines provided by our lead US customer,
helping to provide the additional working capital required until profit from
the US contract can fund working capital in the long term. In H2 we start the
transition which will continue on a phased basis into FY25 to take on the
direct purchase of raw material from suppliers in the US. The Company
continues to have access to its invoice discounting facility in the UK of up
to £3m which was undrawn at the half year and also holds debt relating to
Coronavirus Business Interruption Loans of £1.2m (2023: £1.8m), which are
being repaid by instalments with final amounts due in 2026.
US Contract
Velocity signed a five-year contract with expected revenue of £79 million
($100 million) in December 2022 (the "Contract") with a leading US
manufacturer ("The Customer"). The Company was selected to improve efficiency
and support increased production rates, building on Velocity's long-standing
relationship with the Customer, which it also services across existing UK
sites.
To deliver the Contract, the Company developed its first advanced
manufacturing facility outside of the United Kingdom, a 40,000 sq. ft facility
in Alabama. Velocity invested £3 million to develop the facility which has
capacity to deliver $40 million revenue per annum.
Since completing the construction of the facility in Alabama in 2023, Velocity
has been on-boarding the new business for the Contract. This is a complex and
lengthy process, including a detailed qualification procedure known as First
Article Inspection ("FAI"). The total project is split into a number of
individual aircraft programme blocks, to be delivered sequentially within a
12-month transfer plan. The project involves close co-operation between
Velocity and the Customer to verify that the kit engineering data for each
block had been transferred accurately, followed by the manufacture of the
first kit for each component manufactured for evaluation by the Customer. Once
transferred, Velocity becomes the sole approved supplier of the kits. Only
once each block completes the FAI process is Velocity then able to build
towards full volume production.
Following a key OEM approval in March 2024, Velocity expects the FAI process
to be fully complete for all the programme blocks by the end of FY2024. To
date, Velocity has completed FAIs which enable the Company to satisfy 91% of
FY24 US revenue and 85%% of FY25 US revenue.
It is encouraging to see that our UK sites have seen production rates start to
rise, particularly around the newer programmes such as A350. With Kevin Hickey
re-joining Velocity as Chief Operating Officer ("COO") last year, he has
reviewed the operations structure needed for the future growth of the Company
and made structural changes to deliver this. Each site now has a standard
management structure focused on the Site Operations Manager role, leading
teams with clearer, real-time performance management of safety, quality, cost,
delivery and people to ensure each customer programme is operating in line
with targeted levels. This not only brings stability and efficiency to
existing customer programmes but provides the sound basis for expected growth.
Investment in Growth & Customer Proposition
Velocity continues to maintain the required investment to support its growth
and R&D activities. The Company has been able to self-fund this through
the pandemic, which suppressed short-term demand in the aerospace
manufacturing sector, with the UK civil aerospace sector particularly hard
hit.
This includes further development of the Company's TCO (total cost of
ownership) Business Case process, which allows Velocity business development
staff to accurately map the current, internal costs of customers in-house
processes. This includes detailed breakdown of the key areas - raw material,
labour resources, packaging and logistics, overheads and supply chain finance
costs, and for them to be compared to Velocity's proposal forming a very
thorough and proven business case document for review by senior stakeholders.
In addition, work has been done to develop the Company's customer proposition
through investment in R&D. A new "Digital Manufacturing Cell" that enables
further standardisation and automation of production is expected to be
deployed in the second half of the year. It is likely to improve future gross
margin through material and labour efficiencies. The Digital Cell combines
with our composite tailored material planning technology, Velocity Resource
Planning, or VRP. These technology hardware and software systems enable the
efficiencies in our services to existing customers, in labour, materials and
inventory levels, and feed back into future TCO business cases for new
customers.
Board Changes
On 3 June 2024, we were delighted to welcome Robert (Rob) Smith to the Board
as Group Chief Financial Officer (CFO) and Company Secretary. Rob is a
chartered management accountant with significant experience in leadership
roles in a number of AIM quoted technology companies, where he has been
instrumental in leading growth strategies and improving operational
efficiencies.
Rob has a proven track record in advanced manufacturing at both CFO and CEO
level, including manufacturing systems implementation and international
commercial leadership. Most recently Rob served as Group CFO at Biome
Technologies plc and prior to that, in the CFO and CEO roles at Filtronic plc
between 2014 and 2020, an electronics designer and manufacturer of advanced
filters, antennas and transceivers. Rob was Finance Director of APC
Technology Group, a specialist distributor and manufacturer of electronic
components and semiconductor products with a focus on green technology
industries between 2010 and 2014.
The Board would like to thank Andrew Hebb for his significant contribution as
the Company's Interim Chief Financial Officer since August 2023.
Outlook
Velocity is benefiting from the long-term trend of increasing use of
lightweight composite materials within modern aircraft to meet environmental
targets. This trend is contributing to forecasts for the use of lighter-weight
aircraft to grow by ten times over the next two decades. At the same time,
OEMs are focusing on outsourcing to reduce costs. Velocity has first mover
advantage on its turn-key package of services and is the only company to
provide an end-to-end solution for manufacturers, offering them significant
savings on material and time costs, as well as improving sustainability.
The Company has a healthy short-term pipeline of new business opportunities in
Europe and North America. The Company has contracted revenues for FY24 of
£27m (FY23: £16.4m) growing to £33m in FY25. The current UK and US
manufacturing facilities are being better utilised to meet this increase in
the order book. The new US facility could be doubled again in capacity, to
meet further new business and contracted volumed growth, and the Company has
the capacity to deliver up to circa £70m with only minimal additional
investment. We have a highly qualified pipeline of new business of c.£200m.
The Board have set a five-year target of achieving a contracted revenue of
£100m and 10% EBITDA margin.
We are looking forward to the future with confidence.
Andy Beaden
Non-Executive Chairman
9 July 2024
Condensed consolidated statement of total comprehensive income
for the 6 months ended 30 April 2024
6 months ended 6 months ended 12 months
30 April 30 April ended
2024 2023 31 October
(unaudited) (unaudited) 2023
(audited)
Note £'000 £'000 £'000
Revenue 3 10,745 6,980 16,411
Cost of sales (8,331) (5,459) (13,325)
Gross profit 2,414 1,521 3,086
Administrative expenses (3,325) (2,806) (5,783)
Exceptional administrative expenses - - (120)
Other operating income 50 - -
Operating loss (861) (1,285) (2,817)
Operating loss analysed as:
Adjusted EBITDA (157) (858) (1,606)
Depreciation of property, plant and equipment (192) (116) (297)
Amortisation (120) (20) (116)
Depreciation of right-of-use assets under IFRS 16 (269) (206) (472)
Share-based payments (123) (85) (206)
Exceptional administrative expenses - - (120)
Finance income and expense (219) (152) (326)
Loss before tax (1,080) (1,437) (3,143)
Corporation tax recoverable 400 - -
Loss for the period and total comprehensive loss (680) (1,437) (3,143)
Loss per share - Basic (pence per share) 4 (0.01p) (0.04p) (0.08p)
Loss per share - Diluted (pence per share) 4 (0.01p) (0.04p) (0.08p)
The notes below form part of this interim report.
Condensed consolidated statement of financial position at 30 April 2024
As at As at As at
30 April 30 April 31 October
2024 2023 2023
(unaudited) (unaudited) (audited)
Note £'000 £'000 £'000
Non-current assets
Intangible assets 953 499 890
Property, plant and equipment 1,935 1,739 2,095
Right-of-use assets 1,833 2,299 2,129
Total non-current assets 4,721 4,537 5,114
Current assets
Inventories 2,096 1,633 2,743
Trade and other receivables 3,463 2,976 3,667
Corporation tax recoverable 450 - -
Cash and cash equivalents 1,786 1,208 3,178
Total current assets 7,795 5,817 9,588
Total assets 12,516 10,354 14,702
Current liabilities
Loans 503 536 503
Trade and other payables 3,468 4,298 4,587
Obligations under lease liabilities 489 470 487
Total current liabilities 4,460 5,304 5,577
Non-current liabilities
Loans 719 1,222 970
Obligations under lease liabilities 1,325 1,779 1,587
Total non-current liabilities 2,044 3,001 2,557
Total liabilities 6,504 8,305 8,134
Net assets 6,012 2,049 6,568
Equity attributable to equity holders of the
company
Share capital 5 134 92 133
Share premium 4,870 9,727 4,870
Share-based payments reserve 601 769 478
Retained earnings 407 (8,539) 1,087
Total equity 6,012 2,049 6,568
The notes below form part of this interim report.
The financial statements were approved and authorised for issue by the Board
of Directors on 8 July 2024 and were signed on its behalf by:
Rob Smith
Company Secretary Company Number: 06389233
Condensed consolidated statement of changes in equity for the 6 months ended
30 April 2024
Share Share Retained Share-based payments Total
capital premium earnings reserve equity
£'000 £'000 £'000 £'000 £'000
As at 31 October 2022 91 9,727 (7,102) 684 3,400
Loss for the period - - (1,437) - (1,437)
91 9,727 (8,539) 684 1,963
Transactions with shareholders:
Share-based payments 1 - - 85 86
As at 30 April 2023 92 9,727 (8,539) 769 2,049
Loss for the period - - (1,707) - (1,707)
92 9,727 (10,246) 769 342
Transactions with shareholders:
Share-based payments - - - 121 121
Vesting of share options - - 412 (412) -
Issue of shares net of transaction costs 42 6,063 - - 6,105
Reduction of Share Premium Account - (10,920) 10,920 - -
As at 31 October 2023 133 4,870 1,087 478 6,568
Loss for the period - - (680) - (680)
133 4,870 407 478 5,888
Transactions with shareholders:
Share-based payments 1 - - 123 124
As at 30 April 2024 134 4,870 407 601 6,012
The notes below form part of this interim report.
Condensed consolidated statement of cash flows
for the 6 months ended 30 April 2024
6 months 12 months ended
ended 6 months 31 October
30 April ended 2023
2024
30 April (audited)
(unaudited)
2023
(unaudited)
£'000 £'000 £'000
Operating activities
Loss for the period (680) (1,437) (3,143)
Taxation (450) - -
Profit on sale of assets - (4) (4)
Finance costs 219 152 326
Amortisation of intangible assets 120 20 116
Depreciation of property, plant and equipment 192 116 297
Depreciation of right-to-use assets 269 206 472
Share-based payments 123 85 206
(207) (862) (1,730)
Operating cash flows before movements in working capital
Decrease/(Increase) in trade and other receivables 204 (455) (1,146)
Decrease/(Increase) in inventories 647 (226) (1,336)
(Decrease)/Increase in trade and other payables (1,119) 2,091 2,380
Cash from operations (475) 548 (1,832)
Net cash inflow from operating activities (475) 548 (1,832)
Investing activities
Purchase of property, plant and equipment net of intercompany transfers (6) (756) (1,293)
Purchase of development expenditure (183) (346) (833)
Proceeds from disposal of property, plant and equipment - 4 4
Net cash used in investing activities (189) (1,098) (2,122)
Financing activities
Proceeds from issue of ordinary shares - - 6,590
Share issue transaction cost - - (485)
Finance costs paid (219) (151) (326)
Loan repayment (248) (251) (536)
Repayment of lease liabilities capital (261) (184) (455)
Net cash used in financing activities (728) (586) 4,788
Net Decrease in cash and cash equivalents (1,392) (1,136) 834
Cash and cash equivalents at beginning of period/year 3,178 2,344 2,344
Cash and cash equivalents at end of period/year 1,786 1,208 3,178
The notes below form part of this interim report.
Notes to Interim Report
1. General information
Velocity Composites plc (the 'Company') is a public limited company
incorporated and domiciled in England and Wales. The registered office of the
Company is AMS Technology Park, Billington Road, Burnley, Lancashire, BB11
5UB, United Kingdom. The registered company number is 06389233.
In order to prepare for future expansion in the Asia region, the Company
established a wholly owned subsidiary company, Velocity Composites Sendirian
Berhad, which is domiciled in Malaysia. The subsidiary company commenced
trading on 18 April 2018. The Company also established a wholly owned
subsidiary company, Velocity Composites Aerospace Inc. to prepare for future
expansion in the United States of America. These subsidiaries, together with
Velocity Composites plc, now form the Velocity Composites Group ('the Group').
The Group's principal activity is that of the sale of kits of composite
material and related products to the aerospace industry.
The condensed consolidated interim financial statements are unaudited and do
not constitute statutory financial statements within the meaning of Section
435 of the Companies Act 2006. The review report on these interim financial
statements is set out below. The financial information for the year ended 31
October 2023 has been derived from the published statutory financial
statements for the Company. A copy of the full accounts for that period, on
which the auditor issued an unmodified report that did not contain statements
under Section 498(2) or 498(3) of the Companies Act 2006, has been delivered
to the Registrar of Companies.
These interim financial statements will be available from the Company's
website at www.velocity-composites.com.
2. Accounting policies
Basis of preparation
These condensed consolidated interim financial statements are for the six
months ended 30 April 2024. This interim financial report has been prepared in
accordance with International Accounting Standard 34, in accordance with
UK-adopted international accounting standards, and has been prepared using
consistent accounting policies as applied in the Company's full year accounts
to 31 October 2023 and as expected to be applied in the full year accounts to
31 October 2024. They have therefore been prepared in compliance with the
measurement and recognition criteria of UK-adopted international accounting
standards.
These financial statements have been prepared on a going concern basis and
using the historical cost convention, as stated in the accounting policies.
These policies have been consistently applied to all periods presented, unless
otherwise stated.
The financial statements are presented in sterling and have been rounded to
the nearest thousand (£'000) except where otherwise indicated.
No new standards have been adopted for the first time in the current financial
year.
Going concern
Management continues to undertake a significant level of cash flow forecasting
and detailed financial projections for the period to 31 October 2025 have been
prepared. A number of sensitivities have been performed to understand the cash
flow impact of various scenarios which continue to show that the business has
sufficient liquidity to continue trading as a going concern.
The aerospace sector lends itself to long-term planning due to the nature and
length of customer programmes, typically a minimum of three years, but often
five years or more. This has enabled the business to fully model the period to
31 October 2025 and incorporate more strategic, longer-term planning for
growth as the industry continues its recovery from the pandemic.
2. Accounting policies (continued)
Going concern (continued)
Cash flow forecasts are reviewed monthly through Management's Integrated
Business Planning (IBP) process and the assumptions updated for any new
knowledge to ensure there is no change in the Group's liquidity outlook. This
is linked in with Management's monthly risk review and should the outlook
change significantly with no mitigating actions, the Group's liquidity risk
rating on the risk register will be adjusted to reflect this and subsequently
discussed at Board level.
The latest financial projections incorporate revenue forecasts based on
current contracted demand in both the UK and US. It is important that the
business continues to move towards full rate production in the US in order to
meet this customer demand, generating revenue and cash in the process. The
cost base included in the projections is reflective of the significant cost
reductions that have already taken place in the Group, but also realistic
about the investment required to continue to implement growth.
It is this investment in growth and technological advancements that has
resulted in the forecasts indicating that the Group's Invoice Discounting
Facility, secured against Trade Debtors, will not be utilised during the going
concern period. Whilst this facility is designed to be short-term and can be
withdrawn with 3 months' notice, the latest discussions have reflected the
bank's support for Velocity's growth strategy and as such we expect this
facility will remain available for the foreseeable future. The Group is also
reliant on the supply chain facilities and support offered by the current US
customer as it continues to develop the Tallassee site and move towards full
rate production and again, it is the expectation that this will remain in
place.
Should alternative financing be required, the Group would preserve cash by
delaying further investment activities until longer-term funding could be
implemented, such as asset-based financing against new capital expenditure,
new banking facilities or equity funding.
Having due regard for the latest deliverables and latest projections, together
with the facilities available, it is the opinion of the Board that the Group
has adequate resources to continue to trade as a going concern.
3. Segmental analysis
The Group supplies a single range of kitted products into a single industry
and so has a single segment. Additional information is given below regarding
the revenue receivable based on geographical location of the customer.
12 months
6 months ended 6 months ended ended
30 April 30 April 31 October
2024 (unaudited)
2023
2023
(unaudited)
(audited)
£'000 £'000 £'000
Revenue
United Kingdom 7,143 6,844 14,350
Rest of Europe 6 6 41
US 3,588 - 1,967
Rest of World 8 130 53
10,745 6,980 16,411
Four customers of the Group are responsible for over 90% of the total revenue
in each of the periods presented. The majority of revenue arises from the sale
of goods. Where engineering services form a part of revenue it is only in
support of the development or sale of the goods.
4. Reconciliation of reported earnings per share
12 months ended
6 months ended 6 months ended 31 October
30 April 30 April 2023 (audited)
2024 (unaudited)
2023 (unaudited)
£'000 £'000 £'000
Loss for the period/year (680) (1,437) (3,143)
Weighted average number of shares Shares Shares Shares
Weighted average number of shares in issue 53,433,561 36,600,099 38,410,094
Weighted average number of share options 1,648,430 2,254,694 1,348,066
Weighted average number of shares (diluted) 55,081,991 38,854,793 39,758,160
Share options have not been included in the diluted loss per share calculation
as they would be anti-dilutive with a loss being recognised.
12 months ended 31 October 2022 (audited)
6 months ended 30 April 2024 (unaudited) 6 months
ended 30
April 2023
(unaudited)
Loss per share
Basic & Diluted (0.01p) (0.04p) (0.08p)
5. Share capital of the Company
Number of shares Share capital Share premium
£ £
Share capital issued and fully paid
Ordinary shares of £0.0025 each as at 31 October 2022 36,458,997 91,147 9,727,158
Shares issued to satisfy exercise of share options on 6 March 2023 461,788 1,154 -
Ordinary shares of £0.0025 each as at 30 April 2023 36,920,785 92,301 9,727,158
Ordinary shares issued 15 August 2023 3,972,583 9,932 1,579,102
Ordinary shares issued 6 October 2023 12,500,000 31,250 4,968,750
Transaction costs - - (485,000)
Reduction of Share Premium Account - - (10,919,658)
Ordinary shares of £0.0025 each as at 31 October 2023 53,393,368 133,483 4,870,352
Shares issued to satisfy exercise of share options on 6 March 2023 75,000 188 -
Ordinary shares of £0.0025 each as at 30 April 2024 53,468,368 133,671 4,870,352
Ordinary shares carry the right to one vote per share at general meetings of
the Company and the rights to share in any distribution of profits or returns
of capital and to share in any residual assets available for distribution in
the event of a winding up.
6. Capital commitments
At 30 April 2024 the Group had £158,000 (2023: £Nil) of capital commitments
relating to the purchase of leasehold improvements, plant and machinery and
fixture and
fittings.
Independent Review Report to Velocity Composites plc
Conclusion
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
April 2024 which comprises the condensed Consolidated Statement of
Comprehensive income, the condensed Consolidated Statement of Financial
Position, the condensed Consolidated Statement of Changes in Equity, the
condensed Consolidated Statement of Cash Flows and the related notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 April 2024 is not prepared, in
all material respects, in accordance with UK adopted International Accounting
Standard 34.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, ''Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued for use in the United Kingdom. A
review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with International
Standards on Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with UK adopted IFRSs. The condensed set of financial
statements included in this half-yearly financial report has been prepared in
accordance with UK adopted International Accounting Standard 34, "Interim
Financial Reporting.
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis of Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE, however future events or conditions may cause the entity to cease
to continue as a going concern.
Responsibilities of Directors
The directors are responsible for preparing the half-yearly financial report
in accordance with International Accounting Standard 34, 'Interim Financial
Reporting'.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statements in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Cooper Parry Group Limited
Statutory Auditor
Sky View
Argosy Road
East Midlands Airport
Castle Donington
Derby
DE74 2SA
8 July 2024
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