REG - Velocity Composites - Trading Statement

Velocity CompositesAnnouncement

26/05/2026 07:00

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RNS Number : 5253F  Velocity Composites PLC  26 May 2026

26 May 2026

Velocity Composites plc

("Velocity" or the "Company")

 

Trading Update and Notice of Results

Velocity Composites plc (AIM: VEL), the leading supplier of advanced composite
material kits to the aerospace market, announces the following trading update
for the six months ended 30 April 2026 ("H1 26"). The Company expects to
report its unaudited H1 26 results on 24 June 2026.

Highlights

 •    Expected revenue of £8.4 million (H1 25: £10.4 million)
 •    Adjusted EBITDA for H1 26 expected to be £0.1 million, being the third
      consecutive half year of positive adjusted EBITDA (H1 25: adjusted EBITDA of
      £0.3 million)
 •    Cash at bank as at 30 April 2026 of £0.6 million (31 October 2025: £0.4
      million)
 •    Net cash as at 30 April 2026 of £0.4 million (31 October 2025: net debt £0.1
      million)
 •    Continue to trade in line with full year expectation
 •    Delayed major programme with first US customer proceeding with the transfer
      process expected to commence in FY26
 •    Higher than expected demand from legacy UK customers
 •    Satellite facility at Fareham closed with all production transferred to
      Burnley, allowing for a reduction in overheads and improvements in operational
      efficiencies

 

Financial

For H1 26, Velocity expects to report revenue of £8.4m, compared to £10.4m
in the same period last year due primarily to phasing of shipments from H1 to
H2, while maintaining stable gross margin and lower overheads.

The Company continues to achieve its gross margin targets while controlling
overhead expenditure, with expected adjusted EBITDA of £0.1m for H1 26 (H1
25: £0.3m).

Management's full year revenue expectations remain unchanged as the phasing of
shipments is weighted to the second half, reflecting the receipt of work from
Velocity's lead US customer and higher demand from legacy UK customers. While
H1 26 saw lower sales than the prior year, this resulted from the timing of
the receipt of orders from UK customers (with delivery scheduled for H2 26) as
well as material supply delays that affected our US operations. This supply
has recommenced and we expect to recover lost sales associated with this
material during H2 26.

The balance sheet has sufficient headroom. At 30 April 2026, excluding lease
obligations, the net cash balance was £0.4m (31 October 2025: net debt
£0.1m). The Company continues to be undrawn on its £3m invoice discounting
facility and its outstanding CBIL loan balance had reduced to £0.2m (31
October 2025: £0.5m).

 

Market and Business Development

US

Velocity is working to secure additional US customers and is currently in
advanced discussions with prospective clients. A US Sales Executive has been
appointed to focus on this key market. It is envisaged that new US programmes
will be served from the Company's existing facility in Alabama, which has
successfully completed its NADCAP audit, achieving merit status.

While the transfer of the final work programme from the Company's first US
customer has experienced delays, the process is now committed to begin in H2
26, with completion anticipated as the Group enters FY27. The rates on this
programme are likely to be significantly higher than previously expected as
end customer demand has increased. In addition, further work packages outside
the original contract scope, including process materials, are being
transferred and have started to contribute revenues.

UK

In the UK, sales to legacy customers have been higher than management
originally expected and will contribute continuing revenue through H2 26, and
potentially beyond. A previously announced programme with an existing customer
has successfully completed First Article Inspection and ramped to full
production in Burnley.

The Group has also secured a number of smaller customer wins across a diverse
range of programmes, with new engagements from other customers, including at
former Spirit AeroSystems sites in the UK.

Velocity's satellite facility at Fareham has closed with all production
transferred to Burnley allowing for a reduction in overheads and improvements
in operational efficiencies, utilising a forward stock location model where
needed.

Outlook

Production rates across major civil aerospace programmes are improving as both
Airbus and Boeing work to fulfil substantial orderbooks. Current trends in
civil aircraft production remain positive, particularly across platforms such
as the A350, B737 and B787. While there has been no short-term impact from the
Iran conflict, we are monitoring any potential effects on airline traffic,
customer demand, and supply chain dynamics, particularly given that a
significant proportion of materials are oil-based.

We continue to pursue defence sector opportunities across the UK, Europe and
the US, supported by increasing defence spending in the US and an anticipated
uplift in UK and European investment. Encouragingly, we are seeing a strong
pipeline of engagements in both the US and UK. In the short term, higher
demand from legacy UK customers is offsetting the delayed onboarding of the
final US programmes at our lead customer.

Jon Bridges, CEO, Velocity, commented: "We have made further progress in the
first half, delivering a third consecutive half year of positive adjusted
EBITDA and strengthening our balance sheet, while taking action to streamline
operations and improve efficiency. While revenues reflect the phasing of
shipments, our full-year expectations remain unchanged, with a tone of
cautious optimism supported by the now-confirmed transfer of the final work
programme from our first US customer.

"Encouragingly, production rates across the global civil aerospace market
continue to improve. We are seeing a growing pipeline of opportunities in both
the civil and defence sectors across the US, UK and Europe, positioning
Velocity well for the second half and beyond."

Enquiries:

 

 Velocity Composites plc                    +44 (0) 1282 577577

 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

 Singer Capital Markets                     +44 (0) 20 3903 7715

 Joint Broker

 Russell Cook

 Dan Ingram

 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.

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