EIS/VCT qualifying funds update

RNS Number : 1778C

Velocity Composites PLC

14 June 2019

 

Velocity Composites PLC

14 June 2019

VELOCITY COMPOSITES PLC

("Velocity", the "Company" or the "Group")

EIS/VCT qualifying funds update

Velocity Composites plc, the leading supplier of advanced composite material kits, providing engineering value-solutions for the global aerospace industry, provides the following update on the status of the utilisation of the EIS/VCT qualifying funds of £5.0m that were raised at the time of the Company's admission to trading on AIM in May 2017.

The Group has made promising and rapid progress in recent months on new business opportunities in a number of new territories. In particular, as announced on 12 June 2019, the Group is now able to leverage a potentially significant collaboration agreement with Wesco Aircraft Holdings, Inc. (NYSE: WAIR), a leading independent distributor and provider of comprehensive supply chain management services to the global aerospace industry. The agreement will require investment by Velocity in the US (a new territory for the Group).

The agreement will allow Velocity to bring its expertise to bear in close physical proximity to a number of significant business opportunities. Physical proximity is considered a critical issue for many aerospace supply chains. While no revenue generating contracts have been signed yet, the Board is confident that by investing in a new and fully resourced facility, co-located at a site with the collaboration partner, the chances of winning major new customers in the current pipeline of commercial opportunities will be significantly enhanced.

A smaller but still significant investment is also planned for a new site in mainland Europe. The Group has also committed to a significant new Research & Development centre at its head office in Burnley, UK. The US and UK projects are expected to be complete and fully operational in the next twelve months with the timing of the European site in a similar time frame though dependent on customer demand.

Therefore, the Group now considers that the combination of monies already spent (£3.2m) and monies firmly earmarked for the expenditure noted above (which use is in accordance with the EIS Advance Assurance application made to HMRC) means that the EIS/VCT funding of £5.0m has been employed within the necessary timeframe for tax purposes.

As the Group has retained the EIS/VCT monies within a separate bank account kept solely for this purpose, the Group is able to fund the expenditure detailed above with only a small amount of additional funding required which is expected to come from cash flows generated by the Group's improved trading performance.

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CONTACT DETAILS:

Velocity Brian Tenner, Senior Independent Director	c/o Camarco Tel: [phone]
finnCap (Nominated Adviser and Broker) Scott Mathieson / Hannah Boros (Corporate Finance) Tim Redfern (ECM)	Tel: [phone]
Camarco (Financial PR) Ed Gascoigne Pees / James Crothers	Tel: [phone]

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.  Upon the publication of this announcement via a regulatory news service this inside information will be considered to be in the public domain. 

About Velocity Composites

Velocity Composites is a manufacturer of advanced composite material kits for the aerospace industry disrupting the composites supply chain to deliver engineered waste reduction solutions for its customers to build aircraft components using less time and material. The Company's customers 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 and Boeing 737, 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's services are seeing increased demand as the global aircraft industry enters a more-for-less era. Velocity currently has customers in the UK and Continental Europe.

 

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