Velocity Composites PLC Trading Update & Notice of Results (2358K)
December 20 2022 - 2:01AM
UK Regulatory
TIDMVEL
RNS Number : 2358K
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 596/2014 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")
Trading Update & Notice of Results
Velocity Composites plc (AIM: VEL), the leading supplier of
digital technology driven composite material kits to aerospace and
other high-performance manufacturers, provides the following
trading update for the 12 months to 31 October 2022 ("FY2022"). The
Company expects to publish its FY2022 results on Tuesday 24 January
2023.
Financial Performance
The Company anticipates that FY2022 sales will be no less than
GBP11.9m (FY2021: GBP9.8m). While contracted sales remain
significantly below pre-pandemic levels, there have been
encouraging signs of stability and growth throughout FY2022. This
is in line with published OEM forecast production rates which show
continued recovery over the next three years. Velocity remains
well-positioned to benefit from this growth through its long-term
contracts and customer partnerships. Furthermore, the Board expects
the Company's projected EBITDA loss for FY2022 to be GBP0.5m
(FY2021: loss of GBP0.5m). This is in-line with the Company's
expectations and planned investments in R&D and business
development activities over the last 12-months.
Cash has been invested throughout FY2022 to support the
Company's international growth opportunities and in the development
of its digital manufacturing solutions. Cash at bank as at 31
October 2022 was GBP2.3m (FY2021: GBP3.4m). The Company has access
to an Invoice Discounting Facility with NatWest and a Supply Chain
Finance facility with a key customer. Total undrawn headroom on
both these facilities as of 31 October 2022 was GBP1.3m.
International Expansion into the USA
As announced at the half-year, the Company has continued its
investment in international business development using its existing
resources. The Company today announced a major contract success in
the USA with GKN (the "Agreement"). This Agreement will provide the
return on the investment made in the last year in this area and has
enabled Velocity to establish a new digital manufacturing facility
in the USA to service the largest composite aerospace market.
In 2022, there has been significant focus and investment in
developing Velocity's advanced manufacturing facility in Tallassee,
Alabama. As well as delivering the GKN contract, there is capacity
to target the US composite materials market which is larger than
the market in Europe. The site is near completion and has already
achieved its AS9100 quality approvals. A transfer plan leading to
volume production will commence in January 2023, with the first
production kits expected to be delivered in March 2023 and the full
transfer completed by August 2023. The Agreement is expected to be
worth in excess of US$100 million in revenue over five years. The
initial revenues for the Company under the Agreement are expected
to commence in Q1 FY2023 and will continue through to FY2028.
In the future, the site will become a launch hub for other
customer contracts, and high-level business development activities
are already underway with several potential large customers.
Outlook
The long-term trend towards wider adoption of composite material
technologies is expected to accelerate, with light-weighting and
composite strength being critical to all electrification and
hydrogen fuel developments, along with modern aerospace frames
increasing composite content. The industry has a major focus on
sustainability objectives in its supply chains. As a result, there
are high levels of interest in the Velocity offering globally, and
the Company has a healthy pipeline of new business in both the UK
and in particular North America. New business and recovery in
aerospace build volumes offers the opportunity for a significant
advancement in the Company's financial results.
Andy Beaden, Chairman, Velocity, said : "The last twelve months
has seen real progress at Velocity. We continue to benefit from the
recovery of the global aerospace industry after the pandemic. Our
strategy of international expansion and investment in modern
digital manufacturing and sustainable supply chain solutions is now
bearing fruit. Our business is now underpinned with some
significant long-term contracts, that should drive growth and
suitable financial returns for the significant investments made to
date in the business. The agreement with GKN in the US not only
provides us with significant long-term revenues, but also enables
us to build a base from which we can target other opportunities in
North America, which is the biggest potential market for Velocity
in the world. Demand for composite material technologies is growing
as more industries wrestle with the challenge of delivering net
zero. We are excited about the long-term prospects of the
Company."
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 PR) +44 (0)20 3757 6867
Robin Tozer velocity@secnewgate.co.uk
George Esmond
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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