TIDMVEL
RNS Number : 5508D
Velocity Composites PLC
30 June 2021
30 June 2021
VELOCITY COMPOSITES PLC
("Velocity", the "Company" and together with its subsidiaries
the "Group")
UNAUDITED HALF YEAR RESULTS
For the six months ended 30 April 2021
Velocity Composites plc (AIM: VEL), the leading supplier of
advanced composite material kits to the Aerospace sector, is
pleased to announce its unaudited half-year results for the six
months ended 30 April 2021 (the "Period" or "H1 FY21").
Financial Highlights:
-- Sales volumes stabilised following impact of Covid-19 on Aerospace
sector, with revenue for six months to 30 April 2021 of GBP4.4m
(H1 FY20: GBP9.5m)
-- Successful drive for technological, operational and cash flow
efficiencies have been successful, with improved gross margin
of 25.1% (H1 FY20: 20.5%)
-- Adjusted EBITDA (1) loss for H1 FY21 of GBP0.6m (H1 FY20:
loss GBP0.3m)
-- Operating loss before tax for H1 FY21 of GBP1.1m (H1 FY20:
loss GBP0.6m)
-- Cash at Bank as at 30 April 2021 of GBP3.5m including GBP0.7m
of EIS funds2 (30 April 2020: GBP2.8m and including GBP1.2m
of EIS funds)
Since the period end Velocity has been successful in partnering
with Close Brothers to secure an additional GBP0.6m net cash
inflow through a Top-up CBILS and asset financing facility
-- Velocity remains on track to move back into positive EBITDA
during H2 2021
(1) Adjusted EBITDA defined as earnings before interest, tax,
depreciation, amortisation, impairment, adjusted for exceptional
administrative costs and share based payments. The business uses
this Alternative Performance Measure to appropriately measure the
underlying business performance, as such it excludes costs
associated with non-core activities.
(2) EIS f unds earmarked for EIS/VCT qualifying expenditure and
is deemed to be 'employed' for those purposes in accordance with
the relevant regulations.
Operating highlights
-- The new Velocity partnership proposition has been utilised by
both existing and prospective new customers, allowing the wider
value of the Velocity service to be highlighted and recognised,
particularly through the disruption of 2020-2021.
-- Developments in the Company's core technology, particularly
around real time supply chain/demand management, material
efficiency and operational performance has driven improved service
offerings to customers and internal margins.
-- Following a period of development with a large, multinational
defence group the Company achieved full approval to supply
structural material kits for the F35 joint strike fighter
programme.
-- Strong pipeline of new business remains notwithstanding
continued disruption for civil aviation customers and restrictions
on the Company's ability to travel to international customer
locations.
Current trading and outlook
Since period end significant progress has been made with three
of the Company's largest customers, with whom contract extensions
entered into during H1 FY21 secured future annual revenues of
GBP8.1m at what are currently suppressed build rates. The Board
remains confident in the long-term prospects of the Company, with
Velocity well placed to capitalise on the underlying recovery of
the Aerospace sector and to benefit from new customer acquisition
as industry priorities refocus on supply chain efficiencies as the
wider industry builds back from the impact of Covid-19. With the
pipeline expected to continue to improve as travel restrictions are
eased, the Board is now cautiously optimistic as to the prospects
for an improved second half performance in FY21 and into FY22.
Enquiries:
Velocity
Jon Bridges, Chief Executive Officer
Andy Beaden, Chairman +44 (0) 1282 577577
Cenkos (Nominated Adviser and Broker) +44 (0)20 7397 8900
Russell Cook +44 (0)20 7397 1977
Ben Jeynes +44 (0)20 7397 1974
About Velocity
Velocity Composites is a manufacturer of composite material kits
for the aerospace industry, delivering engineered kits for its
customers to build component parts. The Company's clients 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, Boeing 737, Boeing 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 Composites also exports to Europe and North America.
Chairman's Statement
Introduction
H1 FY21 ending 30 April 2021 saw significant progress with three
of the Company's largest customers. With these contract renewals
securing future annual revenues of GBP8.1m at currently suppressed
build rates this has helped to secure the long-term prospects of
the Company as well as leaving the Company well placed to
capitalise on the underlying sector recovery.
Although December 2020 saw particularly impacted demand rates
with prolonged customer site closures, this was partially offset by
a successful March 2021. This saw development with a large,
multinational defence group which enabled Velocity to achieve full
approval to supply structural material kits for the F35 fighter and
supports the ongoing strategy of diversification outside of Civil
Aerospace.
The Group's liquidity position has also remained robust over the
period, with the Velocity's cost-base now reduced in line with a
GBP13.5m breakeven business and continued focus on lean stock
management supporting the Company's cash flow.
H1 FY21 Financial Review
Revenue in the period was GBP4.4 m (H1 FY20: GBP9.5m) as the
Company continued to see COVID-19 impacted production rates
suppressing demand from its key customers. In addition, prolonged
customer site closures over the Christmas period particularly
impacted December 2020 performance. The Company, however, increased
its gross margin by 4.6 percentage points to 25.1% (H1 FY20: 20.5%)
as a result of successful efforts from management to further
improve operational efficiencies and the new Velocity partnership
proposition delivering higher value benefit to customers as all
parties worked through the disruption.
Administrative expenses, excluding exceptional items, were
reduced by GBP0.5m to GBP2.1m (H1 FY20: GBP2.6m) as cost
improvements have become realised following the business's
right-sizing drive in H2 FY20, continuing in FY21. This includes
only GBP0.1m of furlough support through the Government furlough
scheme and GBP0.1m hardship grant income from Burnley Local
Authority. No exceptional costs were incurred in the period (H1
FY20: Nil)
Though the adjusted EBITDA loss in the period increased by
GBP0.3m to GBP0.6(H1 FY20: loss of GBP0.3m), as a result of the
continuing suppressed demand levels, this was significantly reduced
from the second half loss of GBP1.9m in 2020 on similar revenue
levels. Loss before tax from continuing operations was GBP1.1m (H1
FY20: loss of GBP0.7m), resulting in an increased loss per share of
3.0p (H1 FY20: loss of 2.0p).
Cash at bank at 30 April 2021 was GBP3.5m, compared to GBP3.3m
at 31 October 2020 driven by focussed cash retention efforts within
the business, particularly through lean stock management. Both
period ends had the same benefit from the GBP2.0mmillion CBILS
facility support. Since the period end, Velocity has been
successful in partnering with the finance provider Close Brothers
to secure additional CBILS and asset finance. This will further
support Velocity's Covid-19 recovery plans with an additional Net
Cash inflow of GBP0.6m and a similar 5 year repayment tenor as the
existing GBP2.0m facility. Cash at bank includes an amount of
GBP0.7m of EIS/VCT funds, which are allocated for investment in new
production facilities in the US, mainland Europe and the UK. In
addition to the CBILS, the Company has access to an Invoice
Discounting Facility, which was undrawn as at 30 April 2021, but
has current capacity of GBP1.6m based on outstanding receivables.
The business remains in a net cash positive position, after
deducting debt drawing.
Risk
In preparing these interim financial statements, the management
is required to make accounting assumptions and estimates. The
assumptions and estimation methods are consistent with those
applied to the Annual Report and financial statements for the year
ended 31 October 2020. With one exception, the principal risks and
uncertainties that may have a material impact on activities and
results of the Group remain materially unchanged from those
described in the Annual Report. The exception is the risk of losing
a key contract, which the Board now deem as a lower risk given the
Company's three largest customers have all signed contract
extensions during H1 FY21 for the next 3 years.
COVID-19 continues to be a risk to the sector that is impacting
demand heavily through greatly reduced civil air travel volumes.
With the Company's cost-base now successfully reset to a GBP13.5m
sales breakeven business and sales levels appearing to have
stabilised during H1 FY21, Velocity is well placed to benefit from
the longer-term market recovery. This is supported by the Company's
robust liquidity position and unique offering to the market. In
addition, management continue to develop opportunities to diversify
into other sectors, such as defence, with progress having been made
in H1 FY21 in supporting F35 production at several customer sites
within the UK.
Outlook
In addition to the recent re-contracting of all major customers
the new business opportunity pipeline for the Company looks strong,
albeit with currently impacted production rates. The disruption in
the industry has led to all customers re-evaluating their own
operational footprint and as such significant changes to their
supply chains have been deferred whilst the full effects of the
pandemic were understood. As air travel resumes it is expected that
build rates for the major aircraft programmes will begin to
recover, firstly on the single aisle platforms (A320, B737),
followed by the twin aisle platforms (A350, B787). With capacity at
customers sites having been cut, the Board believe that the
Company's technology driven enhanced service offering coupled with
the highly operational gearing available for immediate deployment
will open up significant opportunities as the industry increases
its utilisation of outsourcing as part of its recovery. For
example, Airbus recently announced that it had asked suppliers to
prepare for an increase in A350 build rates for 2022 by 20% - from
the current rates of 5 per month to 6. The A350 is a platform
served by Velocity.
As the in-house technology developments drive further
performance gains the Company is also working on additional ways to
partner with customers and deploy its technology and services
directly to customers' sites. This model is currently in final
development and brings significant flexibility to the Company's
proposition by allowing for a tailored approach to the exact
customer requirements, without the need for large scale capital
investments to support single customer locations. Discussions have
begun with target launch customers with an expectation of this
being a major 2022 opportunity for profit and margin expansion.
Despite the continued COVID-19 suppressed demand levels across
the whole industry, the Board is now cautiously optimistic as to
the prospects for an improved second half performance in FY21 and
into FY22. W ith the organisational restructuring process completed
and gross margins improving, the Company's cost-base is now beyond
a target GBP13.5m sales breakeven position. With further new
business wins and cost reduction activities Velocity is well placed
to breakeven in H2 FY21, albeit in challenging and uncertain market
conditions.
Andy Beaden
Non-Executive Chairman
29 June 2021
Condensed consolidated statement of total comprehensive
income
For the six months ended 30 April 2021
Half year Half year Year ended
ended ended
30 April 30 April 31 October
2021 2020 2020
(unaudited) (unaudited) (audited)
Note GBP'000 GBP'000 GBP'000
--------------------------- --------------------------- --------------------------
Revenue 3 4,439 9,502 13,561
Cost of sales (3,323) (7,558) (11,237)
--------------------------- --------------------------- --------------------------
Gross profit 1,116 1,944 2,324
Administrative
expenses
excluding
exceptional
costs (2,110) (2,589) (5,132)
Exceptional
administrative
expenses - - (341)
Other operating - - -
income
Operating loss (994) (645) (3,149)
------------------------------ ------------------- --------------------------- --------------------------- --------------------------
Operating loss
analysed as:
Adjusted EBITDA (559) (259) (1,925)
Depreciation &
Amortisation (224) (218) (517)
Depreciation on
right to use
assets (151) (108) (246)
Share based
payments (60) (60) (120)
Exceptional
administrative
expenses - - (341)
Finance income
and expense (65) (40) (98)
--------------------------- --------------------------- --------------------------
Loss before tax
from
continuing
operations (1,059) (685) (3,247)
Income tax
income /
(expense) - 67 117
Loss for the
period and
total
comprehensive
loss (1,059) (618) (3,130)
=========================== =========================== ==========================
Losses per
share - Basic
(pence
per share)
from
continuing
operations 4 (3.0p) (2.0p) (8.0p)
=========================== =========================== ==========================
Losses per
share -
Diluted (pence
per share)
from
continuing
operations 4 (3.0p) (2.0p) (8.0p)
=========================== =========================== ==========================
The notes below form part of this interim report.
Condensed consolidated statement of financial position
At 30 April 2021
As at As at As at
30 April 30 April 31 October
2021 2020 2020
(unaudited) (unaudited) (audited)
Note GBP'000 GBP'000 GBP'000
Non-current
assets
Intangible
assets 123 281 167
Property,
plant and
equipment 1,583 2,733 1,723
Right-of-use
assets 977 380 1,127
--------------------------- --------------------------- --------------------------
Total
non-current
assets 2,683 3,394 3,017
--------------------------- --------------------------- --------------------------
Current
assets
Inventories 769 3,361 1,908
Trade and
other
receivables 2,477 2,924 2,464
Cash and cash
equivalents 3,450 2,841 3,268
--------------------------- --------------------------- --------------------------
Total current
assets 6,696 9,126 7,640
Total assets 9,379 12,520 10,657
--------------------------- --------------------------- --------------------------
Current
liabilities
Loans 300 - 500
Trade and
other
payables 1,444 2,699 1,504
Net
obligations
under
finance
leases 362 436 411
--------------------------- --------------------------- --------------------------
Total current
liabilities 2,106 3,135 2,415
--------------------------- --------------------------- --------------------------
Non-current
liabilities
Loans 1,700 - 1,500
Net
obligations
under lease
liabilities 890 1,252 1,060
--------------------------- --------------------------- --------------------------
Total
non-current
liabilities 2,590 1,252 2,560
Total
liabilities 4,696 4,387 4,975
Net assets 4,683 8,133 5,682
Equity
attributable
to equity
holders
of the
company
Share capital 5 91 90 91
Share premium 9,727 9,727 9,727
Share-based
payments
reserve 550 559 490
Retained
earnings (5,685) (2,243) (4,626)
--------------------------- --------------------------- --------------------------
Total equity 4,683 8,133 5,682
=========================== =========================== ==========================
The notes below form part of this interim report.
The financial statements were approved and authorised for issue
by the Board of Directors on 29 June 2021 and were signed on its
behalf by
Christopher Williams
Company Secretary Co No: 06389233
Condensed consolidated statement of changes in equity
For the six months ended 30 April 2021
Share-based
Share Share Retained payments Total
capital premium earnings Reserve equity
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- ---------------------- ----------------------- -------------------------- ----------------------
As at 31 October 2019 90 9,727 (1,663) 537 8,691
Loss for the period - - (618) - (618)
---------------------- ---------------------- ----------------------- -------------------------- ----------------------
90 9,727 (2,281) 537 8,073
Transactions
with
shareholders:
Share-based payments - - - 60 60
Vesting of share options - - 38 (38) -
---------------------- ---------------------- ----------------------- -------------------------- ----------------------
As at 30 April 2020 90 9,727 (2,243) 559 8,133
Loss for the period - - (2,512) - (2,512)
---------------------- ---------------------- ----------------------- -------------------------- ----------------------
90 9,727 (4,755) 559 5,621
Transactions
with
shareholders:
Share-based payments - - - 60 60
Vesting of share options 1 - 129 (129) 1
---------------------- ---------------------- ----------------------- -------------------------- ----------------------
As at 31 October 2020 91 9,727 (4,626) 490 5,682
Loss for the period - - (1,059) - (1,059)
---------------------- ---------------------- ----------------------- -------------------------- ----------------------
Transactions
with
shareholders:
Share-based payments - - - 60 60
As at 30 April 2021 91 9,727 (5,685) 550 4,683
====================== ====================== ======================= ========================== ======================
The notes below form part of this interim report.
Condensed consolidated statement of cash flows
For the six months ended 30 April 2021
Half year Half year Year ended
ended ended
30 April 30 April 31 October
2021 2020
(unaudited) (unaudited) 2020 (audited)
GBP'000 GBP'000 GBP'000
--------------------------- --------------------------- ------------------------------
Operating activities
Loss for the period (1,059) (618) (3,130)
Taxation - (67) (117)
(Profit)/ Loss on (11) - -
disposal of assets
Finance costs 65 39 98
Amortisation of
intangible assets 44 65 118
Impairment of tangible
asset - - 72
Depreciation of
property, plant and
equipment 180 153 327
Depreciation of right
to use assets 151 108 246
Share-based payments 60 60 120
(570) (260) (2,266)
(Increase)/Decrease in
trade and other
receivables (13) 1,225 1,685
Decrease/(Increase) in
inventories 1,139 (184) 1,269
(Decrease)/Increase in
trade and other
payables (60) (1,331) (1,526)
--------------------------- --------------------------- ------------------------------
Cash generated from
operations 496 (550) (838)
Income taxes received/ - 142 -
(paid)
--------------------------- --------------------------- ------------------------------
Net cash
inflow/(outflow) from
operating
activities 496 (408) (838)
Investing activities
Purchase of property,
plant and equipment (41) (730) (991)
Development
expenditure
capitalised - (28) (39)
Proceeds from disposal
of property,
plant and equipment 10 - 3
Net cash used in
investing activities (31) (758) (1,027)
Financing activities
Loan received - - 2000
Finance lease proceeds - - 211
Finance costs paid (64) (39) (98)
(Decrease)/Increase in - 807 -
invoice discounting
Repayment of finance
lease capital (219) (185) (404)
--------------------------- ---------------------------
Net cash generated
from/ (used in)
financing activities (283) 583 1,709
--------------------------- --------------------------- ------------------------------
Net
increase/(decrease)in
cash and
cash equivalents 182 (583) (156)
Cash and cash
equivalents at
beginning
of period 3,268 3,424 3,424
--------------------------- --------------------------- ------------------------------
Cash and cash
equivalents at end of
period 3,450 2,841 3,268
=========================== =========================== ==============================
Notes to Interim Report
1. General information
Velocity Composites plc (the 'Company') is a public limited
company incorporated and domiciled in England and Wales. The
registered office of the company is AMS Technology Park, Billington
Road, Burnley, Lancashire, BB11 5UB, United Kingdom. The registered
company number is 06389233.
The Company holds shares in a wholly owned subsidiary company,
Velocity Composites Sendirian Berhad, which is domiciled in
Malaysia. During this financial period, the company has provided
engineering services to the Group. The Company also wholly owns
Velocity Composites Aerospace Inc. to prepare for future expansion
in the United States of America. These subsidiaries together with
Velocity Composites plc, now forms the Velocity Composites Group
('the Group').
The Group's principal activity is that of the sale of kits of
composite material and related products to the aerospace
industry.
The condensed consolidated interim financial statements are
unaudited and do not constitute statutory financial statements
within the meaning of Section 435 of the Companies Act 2006. The
review report on these interim financial statements is set out
below. The financial information for the year ended 31 October 2020
has been derived from the published statutory financial statements
for the Company. A copy of the full accounts for that period, on
which the auditor issued an unmodified report that did not contain
statements under Section 498(2) or 498(3) of the Companies Act
2006, has been delivered to the Registrar of Companies.
These interim financial statements will be posted to the
Company's shareholders and are available from the Registered Office
at AMS Technology Park, Billington Road, Burnley, Lancashire, BB11
5UB or from our website at www.velocity-composites.com.
2. Accounting policies
Basis of preparation
These condensed consolidated interim financial statements are
for the six months ended 30 April 2021. This interim financial
report has been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', as adopted
by the European Union, and has been prepared using consistent
accounting policies as applied in the Company's full year accounts
to 31 October 2020 and as expected to be applied in the full year
accounts to 31 October 2021. They have therefore been prepared in
compliance with the measurement and recognition criteria of IFRS as
adopted by the European Union.
These financial statements have been prepared on a going concern
basis and using the historical cost convention, as stated in the
accounting policies. These policies have been consistently applied
to all periods presented, unless otherwise stated.
The financial statements are presented in sterling and have been
rounded to the nearest thousand (GBP'000) except where otherwise
indicated.
No new standards have been adopted for the first time in the
current financial year.
Going concern
The current climate continues to present challenges and impact
the business significantly through suppressed sales demand. As a
result, Management have continued the longer-term financial
planning announced in the FY21 Annual Report to ensure liquidity is
robust and any future cash flow requirements are identified as
early as possible. This involves a 24-month rolling period forecast
which is then extended a further 5 years at a high level and
revisited monthly through the Integrated Business Planning process.
The Aerospace sector lends itself to this kind of long-term
planning due to the nature and length of customer programmes,
typically a minimum of 3 years, but often 5 years or more.
This financial forecasting process has helped the Board to
balance the extent of cost reductions required in FY20 to stabilise
the business with the resource requirements needed to support
future growth potential. It has also supported the business case
for the GBP2.0m CBILS facility, as well as the subsequent 5-year
extension of tenor announced at year end. As such, Velocity now has
a cost base beyond a GBP13.5m sales breakeven position and is on
target to breakeven at an adjusted EBITDA level in H2 FY21.
Management continues to utilise this tool routinely to undertake
sensitivity analysis and 'stress testing' as part of Velocity's
ongoing risk management strategy.
With due regard for these latest projections, H1 FY21 has seen
some reassuring progress for Velocity, with sales demand seemingly
stabilised during the half year, three of the Company's largest
customers committed to long-term contract renewals and successful
diversification into the Military sector. Whilst there undoubtedly
remains uncertainty in the Aerospace industry, with available cash
at 30 April 2021 of GBP3.5m, an invoice discounting facility of
GBP1.6m based on debtor levels as yet undrawn and continued support
of our bank and shareholders, it is the opinion of the Board that
the Group is in a robust liquidity position and has adequate
resources to continue to trade as a going concern.
3. Segmental analysis
The Group supplies a single range of kitted products into a
single industry and so has a single segment. Additional information
is given below regarding the revenue receivable based on
geographical location of the customer.
Half year Half year Year ended
ended ended
30 April 30 April 31 October
2021 (unaudited) 2020
(unaudited) 2020
(audited)
GBP'000 GBP'000 GBP'000
-------------------------------- --------------------------- --------------------------
Revenue
United
Kingdom 4,428 8,413 12,337
Rest of
Europe 11 1,066 1,224
Rest of - 23 -
World
4,439 9,502 13,561
================================ =========================== ==========================
Four customers of the Group are responsible for over 90% of the
total revenue in each of the periods presented. The majority of
revenue arises from the sale of goods. Where engineering services
form a part of revenue it is only in support of the development or
sale of the goods.
4. Reconciliation of reported profit
Half year Half year Year ended
ended ended 31 October
30 April 30 April 2020
2021 2020 (audited)
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
---------------------------- ---------------------------- ----------------------------
Loss for the
period (1,059) (618) (3,130)
Weighted Shares Shares Shares
average
number of
shares
---------------------------- ---------------------------- ----------------------------
Weighted
average
number of
shares
in issue 36,265,983 35,943,337 35,995,289
Weighted
average
number of
share
options 2,184,120 2,195,402 2,143,440
---------------------------- ---------------------------- ----------------------------
Weighted
average
number of
shares
(diluted) 38,450,103 38,138,739 38,138,729
============================ ============================ ============================
Share options have not been included in the Diluted calculation
as they would be anti-dilutive with a loss being recognised.
Half year Half year Year ended
ended ended
30 April 30 April 31 October
2021 (unaudited) 2020 (unaudited)
2020
(audited)
GBP GBP GBP
-------------------------------- -------------------------------- --------------------------
Loss
per
share
Basic & (GBP0.03) (GBP0.02) (GBP0.08)
Diluted
5. Share capital of the Company
Number of Share Capital Share Premium
shares
GBP GBP
------------------------- ---------------------------- ----------------------------
Share capital
issued and fully
paid
Ordinary shares
of GBP0.0025
each
as at 1
November 2019, 35,916,179 89,791 9,727,158
Shares issued to
satisfy
exercise
of share
options on 20
February
2020 70,000 175 -
------------------------- ---------------------------- ----------------------------
Ordinary shares
of GBP0.0025
each
as at 30 April
2020 35,986,179 89,966 9,727,158
Shares issued to
satisfy
exercise
of share
options on 15
September
2020 241,200 603 -
------------------------- ---------------------------- ----------------------------
Ordinary shares
of GBP0.0025
each
as at 31
October 2020 36,227,379 90,569 9,727,158
Shares issued to
satisfy
exercise
of share
options on 12
February
2021 38,604 97 -
------------------------- ---------------------------- ----------------------------
Ordinary shares
of GBP0.0025
each
as at 30 April
2021 36,265,983 90,666 9,727,158
========================= ============================ ============================
Ordinary shares carry the right to one vote per share at general
meetings of the Company and the rights to share in any distribution
of profits or returns of capital and to share in any residual
assets available for distribution in the event of a winding up.
6. Capital Commitments
At 30 April 2021 the Group had GBPNIL (2020: GBPNil) of capital
commitments relating to the purchase of leasehold improvements,
plant and machinery and fixture and fittings.
Independent Review Report to the members of Velocity Composites plc .
Introduction
We have reviewed the consolidated, condensed set of financial
statements in the half-yearly financial report of Velocity
Composites PLC (the 'group') for the six months ended 30 April 2021
which comprises consolidated statement of total comprehensive
income, consolidated statement of financial position, consolidated
statement of changes in equity, consolidated statement of cash
flows and the related notes. We have read the other information
contained in the half-yearly financial report and considered
whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of
financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors.
As disclosed in note 2, the annual financial statements of the
group are prepared in accordance with International Financial
Reporting Standards as adopted by the European Union. The condensed
set of financial statements included in this half-yearly financial
report has been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', as adopted
by the European Union.
Our responsibility
Our responsibility is to express a conclusion to the company on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity'. A review of interim financial information consists
of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK) and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
The impact of macro-economic uncertainties on our audit
Our review of the condensed set of financial statements in the
half-yearly financial report requires us to obtain an understanding
of all relevant uncertainties, including those arising as a
consequence of the effects of macro-economic uncertainties such as
Covid-19 and Brexit. Such reviews assess and challenge the
reasonableness of estimates made by the directors and the related
disclosures and the appropriateness of the going concern basis of
preparation of the financial statements. All of these depend on
assessments of the future economic environment and the company's
future prospects and performance.
Covid-19 and Brexit are amongst the most significant economic
events currently faced by the UK, and at the date of this report
their effects are subject to unprecedented levels of uncertainty,
with the full range of possible outcomes and their impacts unknown.
We applied a standardised firm-wide approach in response to these
uncertainties when assessing the company's future prospects and
performance. However, no review of interim financial information
should be expected to predict the unknowable factors or all
possible future implications for a company associated with a course
of action such as Brexit.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
April 2019 is not prepared, in all material respects, in accordance
with International Accounting Standard 34, 'Interim Financial
Reporting', as adopted by the European Union.
Use of our report
This report is made solely to the company, as a body, in
accordance with International Standard on Review Engagements (UK
and Ireland) 2410, 'Review of Interim Financial Information
performed by the Independent Auditor of the Entity'. Our review
work has been undertaken so that we might state to the company
those matters we are required to state to them in an independent
review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company as a body, for our review work, for
this report, or for the conclusion we have formed.
Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Manchester
29 June 2021
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END
IR QKLFLFQLLBBV
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June 30, 2021 02:00 ET (06:00 GMT)
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