TIDMVEL
RNS Number : 5474Q
Velocity Composites PLC
29 June 2022
29 June 2022
VELOCITY COMPOSITES PLC
("Velocity", the "Company", the "Group")
UNAUDITED HALF YEAR RESULTS
For the six months ended 30 April 2022
Velocity Composites plc (AIM: VEL), the leading supplier of
advanced composite material kits to aerospace and high-performance
manufacturers, is pleased to announce the Company's unaudited
results for the six months to 30 April 2022.
Financial Highlights:
-- Revenue of GBP5.9m (2021: GBP4.4m) as aerospace sales volumes
stabilised post Covid-19.
-- Gross margin of 23.5% (2021: 25.1%) - reflecting some contractual
margin squeeze and short term labour inefficiencies as the
Group begins to increase staffing following recovery.
-- Adjusted EBITDA (1) loss reduced to GBP0.2m (2021: loss of
GBP0.6m).
-- Loss before tax reduced to GBP0.7m (2021: loss of GBP1.1m).
-- Cash at bank as at 30 April 2022 of GBP2.0m (30 April 2021:
GBP3.5m). To support growth, additional GBP2.5m available
through Invoice Discounting Facilities.
(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.
Operating Highlights:
-- Strong pipeline of new business, especially in North America.
The Group has invested in people resource with a renewed focussed
on growth.
-- Contracted sales encouraging with signs of recovery as confidence
in the aviation sector improves.
-- Work continues on internal process technology to improve labour
productivity and material utilisation in the second half,
as higher production rates enable greater efficiencies through
2023 and 2024.
-- Continued investment and development of the Company's technology
- with roll-out of new "Digital Manufacturing Cell" expected
in second half to underpin margin delivery.
Andy Beaden, Chairman of Velocity said: "Over the last six
months, we have seen signs of recovery in the global aerospace
industry, which is starting to reflect in our manufacturing sales
volumes. Further growth is expected over the next 12-18 months.
"Our technology innovation is aimed at providing both material
and labour efficiencies, which in turn benefits both our customers
and our own margins. Though there has been some small margin
squeeze with labour inflation and customer pricing pressures, we
believe our innovations should ensure we maintain our long term
margin and profit objectives. These steps include the internal
deployment of a new "Digital Manufacturing Cell" later this year
that utilises Industry 4.0 technology to increase the size and
efficiency of our production batches while digitising and
standardising production processes in real-time to improve labour
productivity.
"Despite the challenges we have faced due to the pandemic, we
have sustained investment in R&D and business development as
the aviation sector recovers. We have continued our expansion
efforts in Europe and North America and expect to see progress in
H2 2022 through rolling out our solutions to support more customer
facilities. We have had some initial success with customers outside
the aerospace industry, including automotive. Increased use of
composites will be key to delivering net zero in many industries.
We will continue to work with our customers and partners to
investigate revenue streams where our technology can drive
operational efficiency and margins for the company."
Certain of 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.
Enquiries:
Velocity
Jon Bridges, Chief Executive Officer
Andy Beaden, Chairman
Chris Williams, Finance Director +44 (0) 1282 577577
Cenkos (Nominated Adviser and Broker)
Ben Jeynes
Katy Birkin
George Lawson +44 (0) 2073 978900
SEC Newgate ( Financial Communications)
Robin Tozer
Richard Bicknell
velocitycomposites@secnewgate.co.uk +44 (0) 7540 106366
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, 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.
Chairman's Statement
Overview
As we emerge from the Covid-19 pandemic, we are pleased to
announce an improvement in revenue, and narrowing of the operating
loss as the aerospace manufacturing sector continues to recover.
The well-documented problems in the global supply chain in terms of
sourcing goods, materials and skilled labour have meant some
downward pressures on our gross margin, with the current mix of
sales being weaker in margin than in the prior period. We believe
we can mitigate this, and we are taking new actions to improve
labour productivity and material efficiency, and the r oll-out of
our new "Digital Manufacturing Cell" planned for the second half
will help underpin improved margin delivery. Therefore, our
longer-term margin targets remain the same.
Aircraft demand across the global industry has stabilised, with
more significant improvement and recovery forecast in 2023 and
beyond. As a result, we are planning to resume expansion in North
America and Europe, with progress expected in H2 2022.
Furthermore, we have had some initial success with
non-contracted sales in new sectors for the Company, including
high-performance automotive manufacturing and urban air mobility.
We hope to build on these successes by converting them into
longer-term contracts. We have continued to maintain our new
product engineering capability and plan to further invest in our
business development resource to enable further contract wins in
these areas with an element of the overhead cost base retained to
support this ambition.
Some challenges remain regarding the availability of raw
materials as the international supply chain restarts with the
recovery. This is inevitably linked to raw material commodity
price, localised Covid-19 lockdowns overseas and labour challenges
at supplier facilities. Part of our service provision is to work
closely with our suppliers and customers to distribute stock
proportionately across global manufacturing sites to maintain a
stable supply. We are also reviewing areas of particular disruption
where we may want to strategically increase stock to avoid any
supply volatility to customers in future.
Financial Performance
Revenue in the period grew 34% to GBP5.9m (2021: GBP4.4m) as
global production rates started to recover, compared with the prior
period that encompassed lockdowns and customer site closures. Gross
margin has reduced slightly to 23.5% (2021: 25.1%) primarily as a
result of certain production inefficiencies and labour cost
pressures, net of GBP0.2m successful recoveries on historical
inventory write-offs linked to a contract settlement as a result of
the pandemic. The longer-term margin target remains at 25%. The
current margin reduction was also in part a function of onboarding
new labour resources and preparing for higher long-term
volumes.
Administrative expenses have mainly remained in line with last
year at GBP2.0m (H1 FY21: GBP2.1m) despite investment in new
technology to enable future growth and diversification.
The adjusted EBITDA loss reduced by GBP0.4m to GBP0.2m (2021:
loss of GBP0.6m), resulting from improved contracted demand levels.
This can be further analysed as breaking even at EBITDA operating
level while maintaining investment in business development and
R&D of GBP0.3m. Loss before tax from continuing operations
reduced to GBP0.7m (2021: loss of GBP1.1m).
Velocity's cash flow and liquidity are in line with management
expectations. The Company continues to monitor its working capital
closely, with robust controls, ahead of the expected sales recovery
to ensure it can deliver growth in a cash-efficient manner .
Cash at bank as at 30 April 2022 was GBP2.0m (H1 FY21: GBP3.5m),
including anticipated movements through underlying business
performance and working capital investment to support recovery and
new contract terms with customers. Since period end, as at 24 June
2022, the Company's cash balance has improved to GBP2.7 million,
due to cash flow timings and improvements in customer receivables
collections. The Company has access to two invoice discounting
facilities, including a key customer facility, both of which remain
undrawn. At current sales levels, these facilities offer a combined
drawdown capacity of GBP2.5 million. While inventory levels have
increased compared to last year, this has been lower than our sales
growth of over 30% due to continued robust stock controls, and
improved stock turns through the pandemic.
Investment in Growth & Customer Proposition
Velocity continues to maintain the required investment to
support its growth and R&D activities. The Company has been
able to self-fund this, despite the suppressed demand the aerospace
manufacturing sector has experienced due to the pandemic.
In addition, work has been done to develop the Company's
customer proposition through investment in R&D. A new "Digital
Manufacturing Cell" that enables further standardisation and
automation of production is expected to be deployed in the second
half of the year. It is likely to improve future gross margin
through material and labour efficiencies. The Digital Cell combines
with our composite tailored material planning technology, Velocity
Resource Planning, or VRP. These technology hardware and software
systems enable the efficiencies in our services to customers, in
labour, materials and inventory levels.
Board Changes
We have strengthened the Board with additional non-executive
experience in international aerospace and defence and the expanding
use of composite materials outside these core sectors. This
supports our growth strategy and our technical and commercial
profiles with our customers.
In March 2022, we appointed Ms. Annette Rothwell to the Board as
an independent non-executive director. Ms. Rothwell is a seasoned
senior level executive and board member with extensive experience
in industries undergoing transformational change. She is a proven
executive leader in General Management, Procurement and Supply
Chain, Operational Excellence (CI) and Project Management, working
with senior stakeholders, including regional and national
government. Through her international executive career, she has
gained extensive aerospace and defence experience, managing the
supply chains of some major Tier 1 and OEMs, and more recently
advising SMEs across various industrial technology sectors.
In June 2022, we appointed Dr David Bailey FRAeS to the Board as
an independent non-executive director. He is currently CEO of
Composites UK, the trade association for the UK composites
industry. David is an experienced executive with extensive
management and technical expertise developed across the aerospace
and power generation industries. He is a renowned aerospace supply
chain specialist and has worked with the senior management teams of
over 100 aerospace and defence suppliers. As well as David bringing
his considerable understanding of the aerospace industry supply
chain, he has been working for several years with a large number of
world-class companies on the expansion of composite materials in
advanced manufacturing.
We welcome and are delighted to attract such high calibre
individuals to join the Board as we move forward with international
and sector expansion, endorsing the exciting future the Company
has.
As announced on 8 June 2022, Chris Williams will step down from
his position as Group Finance Director and leave the Company at the
end of December 2022 to pursue other business and personal
interests. The Company has commenced a process to identify and
appoint a new Group Finance Director. Mr Williams remains committed
to the Group until his departure and will provide an orderly
handover to the Company's new Group Finance Director.
Outlook
Continued supply chain disruption and cost inflation make for a
challenging commercial environment, but there are positive signs of
market recovery from FY23 onwards, as projected by the major OEMs.
Velocity's contracted sales are particularly linked to Airbus'
outlook and the A350 platform, which is expected to see a step up
in growth in H2 FY23. We believe our services and technology help
and support customers in this changing environment and objectives
around sustainability. Looking beyond aerospace, the need to
deliver net zero means efficient composite material adoption will
be central to many industry sectors. We are prepared and well
placed to take advantage of this and have made successful initial
steps into new sectors.
Our sustained investment in R&D and business development,
combined with a good cash position and available drawdown capacity,
means we can support the underlying business recovery and expansion
into new geographies and sectors. The Board looks forward to the
rest of the year and beyond with confidence.
Andy Beaden
Non-Executive Chairman
29 June 2022
Condensed consolidated statement of total comprehensive income
For the six months ended 30 April 2022
Half year Half year Year ended
ended ended
30 April 30 April 31 October
2022 2021 2021
(unaudited) (unaudited) (audited)
Note GBP'000 GBP'000 GBP'000
---------------------------- ---------------------------- ---------------------------
Revenue 3 5,864 4,439 9,767
Cost of sales (4,487) (3,323) (7,228)
---------------------------- ---------------------------- ---------------------------
Gross profit 1,377 1,116 2,539
Administrative
expenses (2,003) (2,110) (3,903)
Operating loss (626) (994) (1,364)
------------------------------ ------------------- ---------------------------- ---------------------------- ---------------------------
Operating loss
analysed as:
Adjusted EBITDA (189) (559) (548)
Depreciation of
property plant
and equipment* (105) (121) (229)
Amortisation (32) (44) (76)
Depreciation on
right to use
assets* (215) (210) (421)
Share based
payments (85) (60) (90)
Finance income
and expense (84) (65) (182)
---------------------------- ---------------------------- ---------------------------
Loss before tax
from
continuing
operations (710) (1,059) (1,546)
Income tax
income /
(expense) - - 340
Loss for the
period and
total
comprehensive
loss (710) (1,059) (1,206)
============================ ============================ ===========================
Losses per
share - Basic
(pence
per share)
from
continuing
operations 4 (2.0p) (3.0p) (3.0p)
============================ ============================ ===========================
Losses per
share -
Diluted (pence
per share)
from
continuing
operations 4 (2.0p) (3.0p) (3.0p)
============================ ============================ ===========================
* a prior year adjustment has been made between property, plant
and equipment and right-of-use asset please see note 7 for
details
The notes below form part of this interim report.
Condensed consolidated statement of financial position at 30 April
2022
As at As at As at
30 April 30 April 31 October
2022 2021 2022
(unaudited) (unaudited) (audited)
Note GBP'000 GBP'000 GBP'000
Non-current
assets
Intangible
assets 59 123 91
Property,
plant and
equipment* 957 1,136 1,051
Right-of-use
assets* 1,471 1,424 1,688
---------------------------- ---------------------------- ---------------------------
Total
non-current
assets 2,487 2,683 2,830
---------------------------- ---------------------------- ---------------------------
Current
assets
Inventories 948 769 877
Trade and
other
receivables 3,361 2,477 2,162
Corporation
Tax - - 341
Cash and cash
equivalents 2,038 3,450 3,476
---------------------------- ---------------------------- ---------------------------
Total current
assets 6,347 6,696 6,856
Total assets 8,834 9,379 9,686
---------------------------- ---------------------------- ---------------------------
Current
liabilities
Loans 530 300 514
Trade and
other
payables 1,258 1,444 1,058
Obligations
under lease
liabilities 245 362 309
---------------------------- ---------------------------- ---------------------------
Total current
liabilities 2,033 2,106 1,881
---------------------------- ---------------------------- ---------------------------
Non-current
liabilities
Loans 1,730 1,700 1,998
Obligations
under lease
liabilities 1,229 890 1,240
---------------------------- ---------------------------- ---------------------------
Total
non-current
liabilities 2,859 2,590 3,238
Total
liabilities 4,892 4,696 5,119
Net assets 3,942 4,683 4,567
Equity
attributable
to equity
holders of
the company
Share capital 5 91 91 91
Share premium 9,727 9,727 9,727
Share-based
payments
reserve 624 550 539
Retained
earnings (6,500) (5,685) (5,790)
---------------------------- ---------------------------- ---------------------------
Total equity 3,942 4,683 4,567
============================ ============================ ===========================
* a prior year adjustment has been made between property, plant
and equipment and right-of-use asset please see note 7 for
details
The notes below form part of this interim report.
The financial statements were approved and authorised for issue
by the Board of Directors on 28 June 2022 and were signed on its
behalf by
Chris Williams
Company Secretary Co No: 06389233
Condensed consolidated statement of changes in equity for the six
months ended 30 April 2022
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 2020 91 9,727 (4,626) 490 5,682
Loss for the period - - (1,059) - (1,059)
---------------------- ---------------------- ----------------------- -------------------------- ----------------------
91 9,727 (5,685) 490 4,623
Transactions
with
shareholders:
Share-based payments - - - 60 60
As at 30 April 2021 91 9,727 (5,685) 550 4,683
Loss for the period - - (146) - (146)
---------------------- ---------------------- ----------------------- -------------------------- ----------------------
91 9,727 (5,831) 550 4,537
Transactions
with
shareholders:
Share-based payments - - - 30 30
Vesting of share options - - 41 (41) -
---------------------- ---------------------- ----------------------- -------------------------- ----------------------
As at 31 October 2021 91 9,727 (5,790) 539 4,567
Loss for the period - - (710) - (710)
---------------------- ---------------------- ----------------------- -------------------------- ----------------------
91 9,727 (6,500) 539 3,857
Transactions
with
shareholders:
Share-based payments - - - 85 85
As at 30 April 2022 91 9,727 (6,500) 624 3,942
====================== ====================== ======================= ========================== ======================
The notes below form part of this interim report.
Condensed consolidated statement of cash flows
For the six months ended 30 April 2022
Year ended
Half year Half year 31 October
ended ended
30 April 30 April 2021
2022 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
---------------------------- ---------------------------- ---------------------------
Operating activities
Loss for the period (710) (1,059) (1,206)
Taxation - - (341)
(Profit)/ Loss on
disposal of assets - (11) (13)
Finance costs 84 65 182
Amortisation of
intangible assets 32 44 76
Depreciation of
property, plant and
equipment* 105 121 229
Depreciation of
right to use
assets* 215 210 421
Share-based payments 85 60 90
(189) (570) (562)
(Increase)/Decrease
in trade and
other receivables (1,199) (13) 302
(Increase)/Decrease
in inventories (71) 1,139 1,031
Increase/(Decrease)
in trade and
other payables 200 (60) (446)
---------------------------- ---------------------------- ---------------------------
Cash generated from
operations (1,259) 496 325
Income taxes 341 - -
received
---------------------------- ---------------------------- ---------------------------
Net cash
inflow/(outflow)
from operating
activities (918) 496 325
Investing activities
Purchase of
property, plant and
equipment (9) (41) (64)
Proceeds from
disposal of
property,
plant and equipment - 10 13
Net cash used in
investing
activities (9) (31) (51)
Financing activities
Loan received - - 634
Finance costs paid (84) (64) (181)
Loan repayment (252) - (119)
Repayment of lease
liabilities capital (175) (219) (400)
---------------------------- ----------------------------
Net cash generated
from/ (used in)
financing
activities (511) (283) (66)
---------------------------- ---------------------------- ---------------------------
Net
(decrease)/increase
in cash
and cash
equivalents (1,438) 182 208
Cash and cash
equivalents at
beginning
of period 3,476 3,268 3,268
---------------------------- ---------------------------- ---------------------------
Cash and cash
equivalents at end
of period 2,038 3,450 3,476
============================ ============================ ===========================
* a prior year adjustment has been made between property, plant
and equipment and right-of-use asset please see note 7 for
details
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 on
page 2 The financial information for the year ended 31 October 2021
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 Company's
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 2022. This interim financial
report has been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', in
accordance with UK-adopted international accounting standards, and
has been prepared using consistent accounting policies as applied
in the Company's full year accounts to 31 October 2021 and as
expected to be applied in the full year accounts to 31 October
2022. They have therefore been prepared in compliance with the
measurement and recognition criteria of UK-adopted international
accounting standards.
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.
2. Accounting policies (Cont.)
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 forecast which
is reviewed monthly through best practice Integrated Business
Planning ("IBP) processes and extended a further 5 years at a high
level. This is linked in with the Management's monthly risk review
and should the outlook change significantly with no mitigating
actions the Company's liquidity risk rating on the risk register
will be adjusted to reflect this and subsequently discussed at
Board through the Audit Committee's quarterly risk register review.
The Aerospace sector lends itself to this kind of long-term
planning and risk assessment due to the nature and length of
customer programmes and contracts, typically a minimum of 3 years,
but often 5 years or more.
This financial forecasting process continues to support the
Board and Management to balance the extent of cost reductions
required to stabilise the business with the resource requirements
needed to support future growth potential. As such, Velocity now
has a reduced cost base that is more in line with the activity
levels being seen in the sector. Management continues to utilise
this tool routinely to undertake sensitivity analysis and 'stress
testing' as part of Velocity's ongoing risk management strategy.
Latest sensitivities included an underlying sales decline of 10%pa
until FY24, no new sales over this period and separately a delay of
6 months to expected new sales growth.
Only in the latter of these circumstances did the business run
out of cash to support ongoing operations over the next 18 month
period assessed to 31 October 2023. Should such an event occur, the
IBP process offers Management clear advance notice of this with
pre-prepared mitigating actions as detailed below. These forecasts
indicate the group's Invoice Discounting Facility, secured against
Trade Debtors, will be utilised during certain months within the
going concern period. Whilst this facility is designed to be
short-term and can be withdrawn, the latest review reflected the
banks' support for Velocity's growth strategy and extended the
commitment of both parties to a minimum 3 months' notice and as
such we expect this facility will remain available throughout the
going concern period. Should alternative financing be required the
Group would preserve cash through slowing investment in growth
until longer-term funding could be implemented, such as asset-based
financing against new capex or equity funding.
Although work is still needed to improve underlying performance,
recent results and forecasts have shown that adjusted EBITDA
breakeven is achievable for Velocity. Future recovery will be made
possible through a combination of existing contracts recovering to
pre-COVID-19 run rates over the 3-to-5-year period, as well as new
contracts being won from the significant pipeline of opportunities
and targeted investment being made to support this. Cost
improvement programmes and efficiency drives also continue on an
ongoing basis through the Budgeting process. Should the current
strategy prove ineffective or insufficient to recover the
performance of the business, Management have contingency plans
ready to implement should this be needed.
With due regard for these latest projections, H1 FY22 has seen
some reassuring progress for Velocity, with sales demand seemingly
stabilised during the half year and recovery being forecast by the
OEMs, particularly going into FY23. Whilst there undoubtedly
remains uncertainty in the Aerospace industry, with available cash
at 30 April 2021 of GBP2.0m, an invoice discounting facility of
GBP2.5m 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
2022 (unaudited) 2021
(unaudited) 2021
(audited)
GBP'000 GBP'000 GBP'000
-------------------------------- ---------------------------- ---------------------------
Revenue
United
Kingdom 5,813 4,428 9,702
Rest of
Europe 20 11 26
Rest of
World 31 - 39
5,864 4,439 9,767
================================ ============================ ===========================
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. During the period, GBP0.2m of income relates to
successful recoveries on historical inventory write-offs linked to
a contract settlement that arose as a result of the pandemic.
4. Reconciliation of reported earnings per share
Half year Half year Year ended
ended ended 31 October
30 April 30 April 2021
2022 2021 (audited)
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
---------------------------- ---------------------------- ----------------------------
Loss for the
period (710) (1,059) (1,206)
Weighted Shares Shares Shares
average
number of
shares
---------------------------- ---------------------------- ----------------------------
Weighted
average
number of
shares
in issue 36,318,130 36,265,983 36,270,917
Weighted
average
number of
share
options 2,036,458 2,184,120 1,856,366
---------------------------- ---------------------------- ----------------------------
Weighted
average
number of
shares
(diluted) 38,354,588 38,450,103 38,127,283
============================ ============================ ============================
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
2022 (unaudited) 2021 (unaudited)
2021
(audited)
GBP GBP GBP
-------------------------------- -------------------------------- ---------------------------
Loss
per
share
Basic & (GBP0.02) (GBP0.03) (GBP0.03)
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 2020 36,227,459 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
2020 36,266,063 90,666 9,727,158
Shares issued to
satisfy
exercise
of share
options on 28
May 2021 37,001 92 -
------------------------- ---------------------------- ----------------------------
Ordinary shares
of GBP0.0025
each
as at 31
October 2021 36,303,064 90,758 9,727,158
Shares issued to
satisfy
exercise
of share
options on 5
April 2022 108,475 271 -
------------------------- ---------------------------- ----------------------------
Ordinary shares
of GBP0.0025
each
as at 30 April
2022 36,411.539 91,029 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 2022 the Group had GBPNil (2021: GBPNil) of capital
commitments relating to the purchase of leasehold improvements,
plant and machinery and fixture and fittings.
7. Prior Period Adjustment
The prior year HY results as at 30 April 2021 have been amended
to reflect the movement in the group and company reclassified
balances relating to leased assets that were incorrectly presented
within property, plant and equipment rather than right of use
assets. This arose due to an oversight and finance leases were
omitted when adopting IFRS 16. The adjustment had no impact on
opening retaining earnings. Details of the adjustment can be found
below.
Group and Original Revised
company presented presented Adjustment
statement of
financial
position
GBP'000 GBP'000 GBP'000
------------------------- ---------------------------- ---------------------------
Property plant
and equipment 1,583 1,136 (447)
Right of use
assets 977 1,424 447
2,560 2,560 -
============================= ========================= ============================ ===========================
Group and Original Revised Adjustment
company income presented presented
statement
and cash flow
GBP'000 GBP'000 GBP'000
------------------------- ---------------------------- ---------------------------
Depreciation
of property,
plant and
equipment 180 121 (59)
Depreciation of
Right to Use
assets
under IFRS 16 151 210 59
331 331 -
============================= ========================= ============================ ===========================
Independent Review Report to Velocity Composites plc
Introduction
We have reviewed the condensed set of financial statements in
the half-yearly financial report of Velocity Composites plc (the
'company') for the six months ended 30 April 2022 which comprises
the Condensed consolidated statement of total comprehensive income,
the Condensed consolidated statement of financial position, the
Condensed consolidated statement of changes in equity, the
Condensed 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 accounting
standards in conformity with the requirements of the Companies Act
2006. 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'.
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 review
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
Brexit and Covid-19. 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.
Brexit and Covid-19 are amongst the most significant economic
events for the UK, and at the date of this report its 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 group'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 group associated with a course of actions such
as Brexit and Covid-19.
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 2022 is not prepared, in all material respects, in accordance
with International Accounting Standard 34, 'Interim Financial
Reporting'.
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 it 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
28 June 2022
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END
IR BIGDLXDDDGDI
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