Velocity Composites PLC Trading Update and Notice of Results (5159M)
24 May 2022 - 04:00PM
UK Regulatory
TIDMVEL
RNS Number : 5159M
Velocity Composites PLC
24 May 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
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24 May 2022
Velocity Composites plc
("Velocity" or the "Company")
Trading Update and Notice of Results
Velocity Composites plc (AIM: VEL), the leading supplier of
advanced composite material kits to aerospace and high-performance
manufacturers, is pleased to provide the following trading update
for the six months to 1 May 2022 ("H1 FY22"). The Company expects
to announce its H1 FY22 results on 29 June 2022.
The Board is pleased to report that Velocity's sales for H1 FY22
are in line with management expectations at GBP5.9 million (H1
FY21: GBP4.4 million), albeit impacted by sales mix due to extended
effects of the pandemic and material supply chain pressures. The
Company invested GBP0.3 million in H1 FY22 to support growth,
international business development and R&D in Velocity's
proprietary digital technology. This investment is expected to
deliver an adjusted EBITDA loss for H1 FY22 of GBP0.3 million (H1
FY21: loss GBP0.5 million), slightly ahead of management
expectations.
The Company is seeing progress with international markets
re-opening as the pandemic subsides, which has improved the global
recovery in aerospace manufacturing. As a result, the Company is
planning to resume expansion into North America and Europe.
Furthermore, in H1 FY22, there has been initial success in
diversifying the focus of Velocity from civil aerospace into other
sectors, including high-performance automotive manufacturing and
defence. The Company is looking to develop these sectors further
with targeted resources and investment.
The Company's cost base has stabilised, and the Company has
successfully sustained investment in growth in H1 FY22. Underlying
demand from aerospace manufacturing for the Company's products and
services is returning, with signs of further recovery in FY22,
which is expected to be more significant in terms of sales in
FY23.
Velocity's cash flow and liquidity are also in line with
management expectations. The Company continues to drive cash flow
efficiencies through improved working capital management and is
monitoring working capital closely ahead of the expected sales
recovery and future growth.
As at 1 May 2022, the Company's cash at bank was GBP2.0 million
(1 May 2021: GBP3.5 million), with anticipated key movements
through underlying business performance (GBP0.3 million), debt
servicing (GBP0.5 million), and working capital investment to
support recovery (GBP0.6 million). Post period end, the Company's
cash balance has improved to GBP2.4 million as at 20 May 2022. The
Company has access to two invoice discounting facilities, including
a key customer facility, both of which remain undrawn as at 1 May
2022. At current sales levels, these facilities offer a combined
drawdown capacity of GBP2.5 million.
The Board and management look forward to the future with
confidence in the long-term prospects of Velocity.
Enquiries:
Velocity Composites plc
Andy Beaden, Chairman
Jon Bridges, Chief Executive Officer
Chris Williams, Finance Director +44 (0)1282 577577
Cenkos Securities
(Nominated Adviser and Broker)
Katy Birkin
Ben Jeynes +44 (0)20 7397 8900
SEC Newgate (Financial Communications) +44 (0)7540 106366
Robin Tozer / Richard Bicknell velocitycomposites@secnegwate.co.uk
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