Velocity Composites plc, the leading supplier of advanced composite material kits, providing engineering value-solutions for the global aerospace industry, provides the following trading update for the six months ended 30 April 2019.
Overall trading for the Period has been ahead of Board expectations with revenue approximately 5% ahead of the same period last year at just over £12.0m (H1 FY18: £11.6m). Gross margin ratio is significantly improved at over 20.0% (H1 FY18: 15.8%). This result is at the upper end of margins achieved in the second half of FY18 and delivers just under a 40% increase in gross profit for the Period. Adjusted Profit before tax1 is marginally ahead of breakeven compared to an equivalent adjusted loss before tax 1 of £0.7m in the comparative period.
Net cash (excluding lease obligations) as at 30 April 2019 was broadly in line with the £4.1m as at 31 October 2018, with net cash flow effectively neutral over the Period. The Company also has access to a pre-agreed invoice discounting facility of up to approximately £5.0m (of which £0.2m was drawn as at 30 April 2019).
Further to the announcement on 25 March 2019 the Board has now appointed independent search consultants to assist in the process to identify a new independent Non-Executive Chairman who can represent the views of all shareholders. The Board, being cognisant of recent events, have invited the Founder Shareholders to participate in various stages of this recruitment process including the opportunity to meet with a shortlist of Non-Executive Chairman candidates should they wish to do so. As previously announced, following the appointment of a Non-Executive Chairman, the enlarged Board will then be responsible for the processes to identify a permanent CEO, permanent CFO, and an additional new independent Non-Executive Director. Jonathan Bridges and Andrew Hebb continue in their respective non-Board roles of interim CEO and interim CFO and Company Secretary.
1 Adjusted Profit (loss) before tax is defined as earnings before tax and excludes the impact of future growth expenditure relating to UK and overseas, non-recurring exceptional items and exceptional share based payments.