TIDMVEL
RNS Number : 2338K
Velocity Composites PLC
20 December 2022
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the UK version of the EU Market Abuse Regulation (2014/596) which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended and supplemented from time to time. Upon the
publication of this announcement, this inside information is now
considered to be in the public domain.
20 December 2022
VELOCITY COMPOSITES PLC
("Velocity or the "Company")
FIRST ENTRY INTO THE US MARKET WITH US$100M GKN AGREEMENT
Velocity Composites plc (AIM: VEL), the leading supplier of
composite material kits to aerospace and other high-performance
manufacturers, is delighted to announce the signing of a five-year
Work Package Agreement ("WPA") with GKN Aerospace (the "Agreement")
in the United States expected to be worth in excess of US$100
million in revenue over five years.
The investment required to deliver the Agreement will come from
Velocity's existing resources. To support this international
expansion, the Company is developing its first advanced
manufacturing facility outside of the United Kingdom, in the State
of Alabama, which will deliver the Agreement.
GKN Aerospace is a global leader in the use of composite
materials in aerospace engineering structures. The collaboration
with GKN Aerospace will utilise Velocity's advanced Velocity
Resource Planning ("VRP") technology and supply chain services to
support GKN Aerospace's sustainability and efficiency objectives in
the aerospace industry. Such initiatives are seen as vital in the
industry's push to achieving significant environmental and
sustainability improvements this decade.
The initial revenues for the Company under the Agreement are
expected to commence in Q1 FY2023 and will continue through to
FY2028.
The work being undertaken by Velocity will cover a diverse range
of high-performance composite structures across military, civil,
and business jet programmes.
The work will be undertaken at a new advanced manufacturing
facility currently being developed by Velocity. The 40,000 sq. ft
facility is close to the GKN Aerospace site in Alabama and has been
upgraded to the Velocity-required clean room standard. The upgrade
includes the Company's proprietary digital technology and latest
manufacturing systems.
Work on the facility is at an advanced stage, and it is expected
that site approvals and first article tests will be completed by
the end of February 2023, followed by volume production under the
Agreement in Q1 2023, with all programmes expected to be
transferred to Velocity under the Agreement by Q3 2023. Velocity
plans to train and employ up to 30 local staff, supported initially
by existing staff from the UK.
The Agreement builds on Velocity's long-standing relationship
with GKN Aerospace which started in 2015 and includes existing
contracts at three of GKN Aerospace's UK sites, including Bristol,
Luton, and the Isle of Wight. This is the first time that Velocity
has worked with GKN Aerospace outside of the UK, and represents
Velocity's first entry into the US, the largest aerospace
manufacturing market in the world.
Andy Beaden, Chairman of Velocity, said:
"This is a major milestone for Velocity as we make a permanent
entry into the US market and expand our long-standing relationship
with GKN Aerospace. During the pandemic, we worked hard to deepen
our relationships with clients and further invest in our technology
to prepare for the recovery.
"We believe this Agreement will be part of a long-term positive
trend from which Velocity will benefit, as customers look to
recover from the pandemic and to achieve new and improved ways of
working, with a key focus on sustainability, as production rates
increase to pre-pandemic levels.
"We expect a step change in the use of carbon fibre in aircraft
structures to improve fuel efficiency and deliver greater
sustainability in the move to net zero. We believe this will
increase the adoption of Velocity's technology and services to
improve manufacturing efficiencies and inventory supply lead
times.
"As a Company with its roots firmly in the North of England,
this Agreement is a significant endorsement of both Velocity's, and
the region's, manufacturing expertise from one of the world's
leading aerospace suppliers. In the future, we look forward to
expanding further in the US."
Enquiries:
Velocity
Andy Beaden, Chairman
Jon Bridges, Chief Executive Officer
Adam Holden, Group Finance Director +44 (0) 1282 577577
Cenkos (Nominated Adviser and Broker)
Katy Birkin
Ben Jeynes
George Lawson +44 (0) 20 7397 8900
SEC Newgate (Financial Communications) +44 (0) 7540 106 366
Robin Tozer / George Esmond velocitycomposites@secnewgate.co.uk
About Velocity Composites
Based in Burnley, UK, Velocity Composites 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, Safran 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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