REG - Velocity Composites - Trading Update

Velocity CompositesAnnouncement

Today 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20251105:nRSE1977Ga&default-theme=true

RNS Number : 1977G  Velocity Composites PLC  05 November 2025

5 November 2025

Velocity Composites plc

("Velocity" or the "Company")

 

Trading Update

 

Velocity Composites plc (AIM: VEL), the leading supplier of advanced composite
material kits to the aerospace market, announces the following unaudited
trading update for the twelve months ended 31 October 2025 ("FY25"). The
Company expects to publish its FY25 Results on 27 January 2026.

 

Highlights:

 

 ●    Unaudited revenue for FY25 of £20.7m (FY24: £23.0m), lower than FY24 due to
      lower-than-expected A350 production rates and delays in programme transfers
      from the US customer
 ●    FY25 Adjusted EBITDA impacted by lower revenue but expected to be more than
      double FY24 (FY24: £0.4m)
 ●    Gross cash balance as at 31 October 2025 of £0.4m (FY24: £1.6m) and net cash
      (being cash less bank loans, excluding lease liabilities) as at 31 October
      2025 of £nil (FY24: £0.7m). £3m invoice discounting facility provided by
      NatWest Bank remains unutilised as at 31 October 2025 (FY24: Unutilised).

 

FY25 Trading

The Company has made good progress in terms of driving further efficiencies
and improving operating margins across various areas. This has meant increased
gross margin and reduced overhead costs.

 

Velocity was pleased to announce during FY25 a significant contract win for a
major Tier One Company on the A350 programme, as well as the renewal of
contracts at a defence OEM. The Company continues to work on new opportunities
in the US, UK and EU that can be serviced from existing facilities, including
servicing customers in the EU using a forward stock location model.

 

However, trading in H2 FY25 has been adversely affected by lower-than-expected
Airbus A350 production rates. The rates are below the level that Airbus had
previously planned in part due to the widely publicised supply chain issues
and delays. Velocity's North American operations have also been impacted by
delays in programme transfers from the Company's Tier One US customer, related
entirely to issues between the US Customer and the OEM.

 

As a result, unaudited revenue is expected to be £20.7m (FY24: £23.0m),
below market expectations and approximately 10% lower than the prior year.
However, adjusted EBITDA for FY25 is expected to show a significant
improvement over the prior year, continuing the progress made in H2 FY24 and
H1 FY25, a result of enhanced operational efficiency. Given the availability
of invoice discounting facilities, the Company's liquidity remains strong.

 

We are working closely with our US customer to help them unblock the causes of
the delays and are in constructive discussions to complete the transfer
process as soon as Velocity is enabled.

 

FY26 Outlook

As a result of the continuing delays in programme transfers the US, and our
European business being impacted by customers moving business to other
facilities we do not have a kitting agreement with, the Board anticipates FY26
revenue will be lower than current market expectations.

 

That said, adjusted EBITDA is expected to show a further improvement on FY25
as the Company continues to benefit from a combination of further operational
improvements and overhead restructuring. The overhead reduction activities are
likely to yield further annualised savings of approximately £0.6m in addition
to the £0.6m achieved in FY25.

 

FY26 cash requirements are expected to be manageable given the availability of
finance facilities, positive adjusted EBITDA and cash generation during the
year.

 

Jon Bridges, CEO, Velocity, commented: "We are positive about the long-term
outlook for Velocity and the industry, given the projected significant
increases in passenger traffic over the next decade and beyond.  This
optimism is in the face of the continued delays we have experienced in the US
and the slower than expected ramp up of existing civil aircraft programmes.
Demand for civil aerospace and defence programmes is positive, and the Company
is working on new opportunities on ascending programmes in the UK, EU and US
that utilise our technology and digital supply chain manufacturing services
that can be fulfilled from our existing facilities.  We remain focussed on
cash generation and improving operational efficiencies further to ensure that
we will be in a strong position to return to top line growth when production
rates increase."

 

Market abuse regulations

This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the
Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication
of this announcement, this information is now considered to be in the public
domain.

 

 

Enquiries:

 

 Velocity Composites plc             +44 (0) 1282 577577
 Andy Beaden, Chairman
 Jon Bridges, CEO
 Rob Smith, 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 3909 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 and other high-performance manufacturers, 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.

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTFSSEFLEISESF



            Copyright 2019 Regulatory News Service, all rights reserved