Pre-Close Trading Update

RNS Number : 1916T

Velocity Composites PLC

13 November 2019

 

13 November 2019

VELOCITY COMPOSITES PLC

("Velocity Composites" or the "Company")

Pre-Close Trading Update

Velocity Composites plc (AIM: VEL.L), the leading supplier of advanced composite material kits to the aerospace market, provides an update on its trading performance for the year to 31 October 2019 ahead of release of its preliminary results statement in January 2020.

Financial

-  Revenue for the year approximately £24.2m (FY 2018: £24.5m)

-  Gross margin improvement over FY 2018 (18.3%) and H1 2019 (20.9%)

-  Results for the year to October 2019 are expected to be in line with market expectations

-  Net cash (before finance leases) £3.4m as at 31 October 2019

Operational

-  New integrated business plan now being implemented with target-based incentivised remuneration for all staff

-  Renewed focus on operational excellence, margin improvements and return on capital

-  Expanding pipeline of global opportunities for existing and new Tier 1 customers

-  First US facility targeted to be operational in 2020 and now working on bids with several major customers to support launch

-  Developing a new investment model to be applied at new sites across US and Europe, requiring limited capital to maximise ROCE and generate further margin improvements

-  New Board structure with effect from July 2019 with Jon Bridges reappointed as CEO.  Andy Beaden and Rob Soen appointed as NEDs, bringing significant industry experience.  Search process underway for additional board members for an independent audit chair and permanent CFO.

Andy Beaden, Velocity Composites Chairman, commented:

"Since joining the Board three months ago I have been impressed by the drive, dynamism and professionalism of the management and staff throughout the Company. 

The Company is focused upon supporting and developing its key customer relationships, while at the same time capturing specific, targeted market opportunities within the UK, but more specifically involving our partners in Europe and across North America.

Revenues are stable and we are already achieving some gains in operating efficiencies and therefore margin improvement. There is much further to go in this direction, and we will be able to report further progress through 2020 and beyond. The prospects for Velocity Composites are very exciting."

The Company will be meeting with certain institutional shareholders over the coming days.  A copy of the investor presentation prepared for these meetings will be available for all investors on the company's website https://www.velocity-composites.com/

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

Enquiries:

Velocity Composites plc Andrew Beaden, Chairman Jon Bridges, CEO	Tel: [phone]
Cenkos Securities plc (Nominated Adviser and Broker) Russell Cook Ben Jeynes	Tel: [phone]
Camarco (Financial PR) Ed Gascoigne Pees James Crothers	Tel: [phone]

About Velocity Composites

Velocity Composites manufactures advanced carbon fibre and ancillary material kits for use in the production of aircraft.  The Company uses its process knowledge, business processes and proprietary software to reduce the amount of material required by its customers and also reduce the associated material waste when making aircraft parts.  In turn, this reduces the aircraft manufacturer's costs, with the kits delivered on time and in the required form to allow its customers to more readily meet the significant increases in build rates.

The Company trades under the name "Velocity Composites".

 

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