Velocity Composites PLC Trading Update and Directorate Change (3507F)
October 26 2018 - 8:00AM
UK Regulatory
TIDMVEL
RNS Number : 3507F
Velocity Composites PLC
26 October 2018
VELOCITY COMPOSITES plc
("Velocity" or the "Company")
YEAR END TRADING UPDATE AND DIRECTORATE CHANGE
Velocity, the leading supplier of advanced composite material
kits, providing engineering value-solutions for the global
aerospace industry, today provides an update on trading ahead of
its financial year end of 31 October 2018 and provides an update on
Directorate change.
Results reflect continued progress
The Company has seen continued growth at both its Burnley site,
and its second site in Fareham, Hampshire.
Revenue for the year ending 31 October 2018 will be slightly
above GBP24 million and the net cash position (excludes finance
lease obligations) is forecast to be in the region of GBP3.6
million at the year end. The Company also has access to a
pre-agreed invoice discounting facility of up to approximately
GBP5.0 million (of which GBP1.0 million is expected to be drawn at
year end).
Gross margins in the second half of FY18 have stabilised to 19%
and above on a monthly basis and the Directors and senior
management are working hard on initiatives to increase this.
Intention to open new sites
The Directors remain committed to the opening of new sites, upon
significant customer contract awards, in new territories using the
remaining c.GBP4 million of EIS/VCT cash raised at the time of the
IPO and ahead of the timetable for this cash to be employed of 18
May 2019 when the EIS/VCT tax reliefs may then be affected (in the
absence of any other EIS/VCT qualifying expenditure). Under current
legislation, EIS/VCT cash can be considered to be employed in
advance of the date of actual cash expenditure.
The Company has continued its investment in sales and business
development, including on-going work in relation to opening a new
European facility and this, and the date when the remaining EIS/VCT
funds are employed, is dependent upon the company securing a
significant customer contract.
Revenue visibility
As previously reported, for both FY19 and FY20, the Company
continues to have visibility of revenues of GBP23 million per annum
from contractual relationships already in place, subject to
customer demand fluctuations. The Company's pipeline of live
opportunities continues to grow steadily and the Board remains
confident that it will secure future revenue growth from both new
customers and from new business wins with existing customers.
Mark Mills, Executive Chairman commented:
"We will finish this financial year in line with the previously
announced revised expectations. The Company faces challenges in
terms of timely new customer acquisition and onboarding. The
Company now needs to build momentum with increased focus on winning
additional work from existing customers and those close to the UK
to drive more rapid revenue growth and then build out from there in
terms of new territories."
Directorate change
Following the trading update issued on 4 September 2018 and
subsequent Directorate changes announced on 5 September 2018, Jon
Bridges will no longer serve on the Board of the Company with
immediate effect. Mark Mills will continue in his role as Executive
Chairman on an interim basis whilst the search for a new CEO is
accelerated with a view to seeking an external candidate.
Progress is being made with regard to the search for a new CFO
and the Company expects to be in a position to update on progress
on this search in early 2019 as well as updating on the progress of
the search for a new CEO thereafter.
The Company expects to publish its Final Results for the year
ended 31 October 2018 on 22 January 2019.
Ends
CONTACT DETAILS:
Velocity c/o Camarco
Mark Mills, Executive Chairman Tel: 020 3757
4980
finnCap (Nominated Adviser and Broker) Tel: 020 7220
Ed Frisby / Scott Mathieson / Hannah Boros 0500
(Corporate Finance)
Tim Redfern (ECM)
Camarco (Financial PR) Tel: 020 3757
Ed Gascoigne Pees, Georgia Edmonds 4980
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014. Upon the publication of this
announcement via a regulatory news service this inside information
will be considered to be in the public domain.
About Velocity Composites
Velocity Composites is a manufacturer of advanced composite
material kits for the aerospace industry disrupting the composites
supply chain to deliver engineered waste reduction solutions for
its customers to build aircraft components using less time and
material. The Company's customers include multi-national
manufacturers of composite parts and assemblies, who in turn
deliver to the world's leading civil and military aircraft
manufacturers. The Airbus A320, A330, A350, A380, Eurofighter
Typhoon, F35 Joint Strike Fighter and Boeing 737, 787 and V22
Osprey are all constructed using parts manufactured from Velocity's
kits. The Company's business model reduces the operating costs of
preparing composite materials ahead of their usage in the
construction of an aircraft part and as such, its offering is
disposed to being self-financing for aircraft parts' manufacturers.
Velocity's services are seeing increased demand as the global
aircraft industry enters a more-for-less era. Velocity currently
has customers in the UK and Continental Europe.
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 or visit www.rns.com.
END
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