REG - Velocity Composites - Trading Update and Notice of Results

Velocity CompositesAnnouncement

24/05/2022 07:16

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RNS Number : 5159M  Velocity Composites PLC  24 May 2022

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24 May 2022

 

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 aerospace and high-performance manufacturers, is pleased to
provide the following trading update for the six months to 1 May 2022 ("H1
FY22"). The Company expects to announce its H1 FY22 results on 29 June 2022.

 

The Board is pleased to report that Velocity's sales for H1 FY22 are in line
with management expectations at £5.9 million (H1 FY21: £4.4 million), albeit
impacted by sales mix due to extended effects of the pandemic and material
supply chain pressures. The Company invested £0.3 million in H1 FY22 to
support growth, international business development and R&D in Velocity's
proprietary digital technology. This investment is expected to deliver an
adjusted EBITDA loss for H1 FY22 of £0.3 million (H1 FY21: loss £0.5
million), slightly ahead of management expectations.

 

The Company is seeing progress with international markets re-opening as the
pandemic subsides, which has improved the global recovery in aerospace
manufacturing. As a result, the Company is planning to resume expansion into
North America and Europe. Furthermore, in H1 FY22, there has been initial
success in diversifying the focus of Velocity from civil aerospace into other
sectors, including high-performance automotive manufacturing and defence. The
Company is looking to develop these sectors further with targeted resources
and investment.

 

The Company's cost base has stabilised, and the Company has successfully
sustained investment in growth in H1 FY22. Underlying demand from aerospace
manufacturing for the Company's products and services is returning, with signs
of further recovery in FY22, which is expected to be more significant in terms
of sales in FY23.

 

Velocity's cash flow and liquidity are also in line with management
expectations. The Company continues to drive cash flow efficiencies through
improved working capital management and is monitoring working capital closely
ahead of the expected sales recovery and future growth.

 

As at 1 May 2022, the Company's cash at bank was £2.0 million (1 May 2021:
£3.5 million), with anticipated key movements through underlying business
performance (£0.3 million), debt servicing (£0.5 million), and working
capital investment to support recovery (£0.6 million). Post period end, the
Company's cash balance has improved to £2.4 million as at 20 May 2022. The
Company has access to two invoice discounting facilities, including a key
customer facility, both of which remain undrawn as at 1 May 2022. At current
sales levels, these facilities offer a combined drawdown capacity of £2.5
million.

 

The Board and management look forward to the future with confidence in the
long-term prospects of Velocity.

 

 

 

 

Enquiries:

 

 Velocity Composites plc                  +44 (0)1282 577577

 Andy Beaden, Chairman

 Jon Bridges, Chief Executive Officer

 Chris Williams, Finance Director
 Cenkos Securities                        +44 (0)20 7397 8900

 (Nominated Adviser and Broker)

 Katy Birkin

 Ben Jeynes

 SEC Newgate (Financial Communications)   +44 (0)7540 106366

 Robin Tozer / Richard Bicknell           velocitycomposites@secnegwate.co.uk

 

 

 

 

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