Velocity Composites plc, the leading supplier of advanced composite material kits, providing engineering value-solutions for the global aerospace industry, today announces its unaudited interim results for the six months ending 30 April 2019.
- Revenue increased 5.3% to £12.2m (H1 FY18: £11.6m)
- Significant improvement in Gross Margin (GM%), increasing to 20.9% (H1 FY18: 15.2%), and at the upper end of GM% achieved in H2 FY18 (21.1%)
- Gross profit increased as a result by 45% to £2.6m (H1 FY18: £1.8m)
- Adjusted profit1 of £0.3m (H1 FY18: loss £0.5m), reflects GM% gains and reductions in overheads delivered in H2 FY18 offset by continued investment aimed at delivering international growth
- Cash remains strong with net cash of £4.2m (Oct FY18: £4.1m) which comprises gross cash of £4.37m of which £1.8m is earmarked for EIS/VCT qualifying expenditure and is deemed to be ’employed’ for those purposes in accordance with the relevant regulations
- The recertification of Nadcap Special Process accreditation for both UK sites with zero audit findings.
Brian Tenner, Senior Independent Director, commented:
“We are pleased with the performance of the business during a period of uncertainty at Board level. Revenues grew and excellent GM% performance gains drove the business back into profit and allowed a cash break even Period. The Board remains confident of meeting its full year expectations for revenue while GM% will be at the upper end of expectations, subject to customer demand fluctuations.
The ongoing discussions with the Founders regarding the re-constitution of the Board are undoubtedly disappointing following what was thought to be an agreed process at the AGM. However, as announced today, the Board is hopeful of reaching a successful resolution to the dispute with the Founders in the short term that will avoid the risk of a disorderly transition.
Despite the distractions, exciting new investment opportunities are coming to fruition that allowed the Group to fully employ the EIS / VCT funds by the due date. These opportunities will allow the Group to build on the current recovery to deliver long term value. If the re-constitution of the Board can be agreed and put behind us, this will assist greatly in allowing the business to focus on achieving its true potential based on Velocity’s core strengths.”