Velocity Composites PLC Trading Update & Notice of Results (1223U)
December 01 2021 - 2:00AM
UK Regulatory
TIDMVEL
RNS Number : 1223U
Velocity Composites PLC
01 December 2021
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constitute inside information as stipulated under the Market Abuse
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1 December 2021
VELOCITY COMPOSITES PLC
("Velocity or the "Company")
Trading Update & Notice of Results
Velocity Composites plc (AIM: VEL), the leading supplier of
composite material kits to aerospace and other high-performance
manufacturers, that reduce costs and improve sustainability ,
provides the following trading update for the 12 months to 31
October 2021, ahead of the publication of its results on Monday 24
January 2022.
The Board is pleased to confirm that trading has continued in
line with the performance reported by the Company in its interim
results for the six months ended 30 April 2021 on 24 May 2021.
Furthermore, in line with previous guidance, the Board expects the
Company will achieve its stated target of an EBITDA breakeven
position in the second half of FY2021. It is therefore expected
Velocity will report an EBITDA loss of GBP0.5m for the full year
(FY2020: GBP1.9m), being the loss incurred in the first half of the
financial year.
The Company anticipates that sales for the year to 31 October
2021 will be no less than GBP9.5m (FY2020: GBP13.6m). Contracted
sales remained suppressed as a result of the reduced levels of OEM
aircraft production rates. Industry forecasts show that production
rates are expected to pick up in 2022, with stronger growth
expected in 2023. Importantly, the trend continues to towards the
increasing use of composite materials by global aerospace
manufacturers, in defence and civil sectors, driven by commercial
aircraft requirements to be more fuel efficient through
light-weighting, as a key element of global sustainability
policies. As a result, Velocity is seeing increased opportunities
for new business, as the sector emerges from the pandemic.
The Company has benefited during 2021 from continued Government
COVID-19 support and has been able to realise gains during the
period from inventories that were previously expected to become
obsolete due to suppressed demand being utilised. As a result the
Company has been able to maintain ongoing investment in its
technology and engineering capabilities throughout the year. Moving
into 2022, some additional cost savings and increases in underlying
volumes will replace the support received in 2021.
Investment in growth will be central to the Company's strategy
in 2022, especially given the expected opportunities for large
increases in industry volumes from 2023 onwards. The potential for
increases in new business wins over the coming years will be
significant.
The Company's focus on maintaining robust liquidity during the
period means the Board is confident that Velocity is well placed to
invest in and capitalise on these future opportunities. As at 31
October 2021, cash at bank was GBP3.4m (FY2020: GBP3.3m) with a net
cash position of approximately GBP0.7m (FY2020: GBP0.9m), net of
GBP2.3m CBIL liabilities and GBP0.5m hire purchase agreement
liabilities. All invoice discounting facilities, of GBP1.3m based
on outstanding receivables, remain undrawn at year end.
Andy Beaden, Velocity Composites Chairman, said : "We renewed
all our major long term contracts during the past year and were
able to continue to invest in our technology and engineering supply
chain skills. This puts the Company in a stronger position to
exploit the large potential gains from an industry now increasing
its production rates once again and increasing its adoption of
composites in Aerospace. Our smart technology solutions provide the
perfect answer to the need for the industry to reduce material
waste and drive forward the changes needed to meet the global
sustainability agenda."
Enquiries:
Velocity
Andy Beaden, Chairman
Jon Bridges, Chief Executive Officer
Chris Williams, Finance Director +44 (0) 1282 577577
Cenkos (Nominated Adviser and Broker) +44 (0)20 7397 8900
Ben Jeynes +44 (0)20 7397 1974
Katy Birkin +44 (0)20 7397 1976
SEC Newgate (Financial PR)
Robin Tozer
Richard Bicknell +44 (0)20 3757 6867
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