Velocity Composites (LSE:VEL) reported first-half revenue of £8.4 million, compared with £10.4 million in the prior year period, as the timing of programme transfers in the United States and customer ordering patterns impacted sales performance. Despite the lower revenue base, the company delivered its third consecutive reporting period of positive adjusted EBITDA, generating £0.1 million during the half year.
Gross margin remained stable at 28%, demonstrating resilience in the underlying business, although loss before tax increased to £1.0 million. The result was partly affected by exceptional costs associated with the closure of the company’s Fareham facility as part of its ongoing operational restructuring programme.
Financially, Velocity strengthened its balance sheet, ending the period with net cash of £0.5 million. The company also retained access to a £3.0 million invoice discounting facility, which remained fully undrawn at the reporting date.
Operational progress continued across several areas of the business. Additional Airbus A350 programmes have now transitioned into sustained production, while UK operations have been consolidated into the Burnley facility to improve efficiency and reduce overhead costs. The company also reported stronger-than-anticipated demand from established UK customers and secured a number of smaller contract awards during the period.
Management highlighted improving production rates across major commercial aerospace platforms, including the Airbus A350, Boeing 737 and Boeing 787 programmes, while demand from the US defence sector remains robust. However, the company cautioned that an unfavourable product mix is expected to weigh on second-half margins.
As a result, Velocity now expects full-year adjusted EBITDA of approximately £0.5 million, with results anticipated to come in below current market forecasts. Nevertheless, management remains confident in the longer-term outlook as the company continues to expand its presence in the US market and pursue opportunities within the growing defence sector.
More about Velocity Composites
Velocity Composites plc is a UK-based supplier of advanced composite material kits and logistics solutions for the aerospace industry. Working with major manufacturers including Airbus, Boeing and GKN, the company helps customers improve manufacturing efficiency, reduce material waste and lower production costs through its proprietary technologies and services. In addition to aerospace, Velocity is exploring growth opportunities in sectors such as defence, wind energy, urban air mobility and electric vehicles.
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