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Funny we all think theirs real upside but never really see many trades each day.....
Does the company need better PR?
Jim89
I am far from concerned here, this is a huge opportunity...
100% agree Medium and long term looking very encouaging
Those in the know will very probably have already bought and are topping up on this dip...
Understand that the market will obviously react badly to what was included in today's announcement, they always do when forecasts are reduced but its only forecasts. Teething issues were bound to occur on a new contract, in a new facility. However, the bigger picture needs to be looked at here. There is obviously another large contract on the horizon in the US, the facility can treble in production as has been stated numerous times. This potential (I firmly believe the deal is closer than has been stated) will not be baked in to the current numbers, therefore, I certainly see a huge upturn in the next 12 months with two major tier 1 companies on board. Will the next contract be larger, very possibly but that is just my opinion. Transformational was the word used by Andy Beadon...
The risk/reward ratio certainly swings in favour of reward here if you look at the potential and hints provided by the company over the last 6 months.
I am far from concerned here, this is a huge opportunity...
A bit of timing delay here and I get a whiff of the same potential fundraise Gavster-NBC.
Was going to put in a few more K but will hang back for now just in case.
No doubt it has bright future. Just needs to be a little bit more transparent on funding.
Back down to the early 40s with so much 'Jam tomorrow', but IMO a lower SP suggest buying opportunities.
I get a whiff of fund raising which as we all know means dilution, but hopefully they'll be experienced enough to do this at as high share price as possible, I imagine by borrowing until the first cash from the $100m contract starts to roll in, and the clients are happy. Also at some point there is surely going to buying from those in the know about this contract as they also see an investing bargain.
Meantime.. the next 6 months will surely see a slow rise.
Good news re below
The Board is pleased to announce that it is in advanced discussions with a large, global Tier 1 composites manufacturer with multiple sites in the US on another agreement. Further announcements will be made, as appropriate.
In the UK, demand is growing. In FY2023, growth of at least 15% is expected compared to FY2022. In FY2024, Velocity is planning for extra work from a UK manufacturer seeking to expand its capacity to meet growing demand. With expected UK growth and the start of the full rate production under the Agreement in the US, the Company can deliver profitability in FY2024.
As of 30th April they had £1.2M cash, GKN are also supportive as noted in the Half Year results-
' working capital will be supported by supply chain finance lines provided by GKN, helping to provide a self-funding mechanism until the profit from the contract can then fund the work under the contract in the long-term'.
Moving in the right direction but with the typical teething issues seen in these company expansions.
One very positive statement which highlights why this company offers lots of potential-
'The Board is pleased to announce that it is in advanced discussions with a large, global Tier 1 composites manufacturer with multiple sites in the US on another agreement. Further announcements will be made, as appropriate.'
Delays with approvals will have an impact on short term revenues although ultimately this years income will now be in excess of the original contract from GKN which will still deliver $100M, but starting from next year.
Cenkos-
'Our forecasts: We are lowering our FY23E revenue forecast from £20.1m to £16.2m based on the revised schedule for GKN, and we reduce our FY23E adjusted EBITDA forecast from £0.1m to £(1.5m). We maintain our FY24E forecast at £33.4m, which includes a less favourable $/£ exchange rate and a reduced Q1 contribution from the GKN programme, offset by an assumed £3m incremental contribution from an additional customer in the USA. We are reducing our FY24E adjusted EBITDA forecast from £3.5m to £2.1m, reflecting the additional investment costs as well as a gross margin assumption reduced from 25% to 23.5%, which is driven by a higher proportion of revenue coming from ramp-up stage activity.
Conclusion: We believe that Velocity has a strong medium-term revenue trajectory, driven by the civil aerospace demand environment and by expansion of the customer base. The announced slower ramp-up schedule leads to a reduction in our near-term forecasts. We believe the company has an increased level of visibility now that the first work packages for GKN are in production and maintain a BUY recommendation. '
Suddenly, there's more than £40k's worth of investment - just out of the blue! Obviously, more news on Alabama must be imminent and now is the time to top up.
I think so Gavster. The market is probably cautious on the cash situation and awaiting news of further business. This should double from here in the next 18 months if all goes to plan
Somewhat disappointing in the short term.. The share I took the cash to buy back before results has since shot up 10%, and VEL down 10%, and is almost at the bottom of the trend line on the daily chart (around 42p) which we should expect it to bounce from.
Waiting game it is. News of first US payments, jobs being accepted and UK growth, should all help to take us up from the somewhat ridiculous market cap of £16.25m.
Surely and MC of £25m to £30m is on the cards.
Cheers all and GL
'Not long'... Well, six months to a year at least.
I don't see anything particularly new in today's accounts. I did expect some sort of financial deposit or news of first delivery and some received USA payments to be included.
Looks like no jolt upwards today, more a slow rise over the coming months.
Surely we're all anticipating the good news to solidify and continue with this weeks updates...
Some profit would be good as well as new contracts. Market cap is still so low !
I top sliced 50% of my holding at 55p a few weeks back, now back in with the same cash and with a higher holding at a lower average. Pretty happy with that, as so often these kind of trades go sideways but VEL looks pretty consistent with chart wise retraces.
Cheers and GL
The SP should go well clear of a quid, if expectations are anything to go by. Up 15% and further progress being concentrated on Alabama. Should be a good month, this.
11th July as per last RNS. Expect a presentation also and hopefully news of new significant contract in US
Until some news comes our way. I believe that results are due mid July (18th?). Hope they are better at their job than updating their website! https://www.velocity-composites.com/investors/financial-calendar/
Hopefully the news, and potentially more contracts (?), will help push the share price up to new highs and sustain them.
That price is all pretty much in line with Cenkos price with revenues at £33m for 2024E, clearly if/when they double the revenue to the £75m p/a then the upside is greater.
I think that there is also a lot of potential outside of aerospace (both civilian and defence) which is what makes this such an interesting holding.
With the expansion into the US and further contracts on the way, I expect to see minimum £50M annual revenues within the next 18-24 months.
The CEO stated that the current US facility can double in production. Contracted business should deliver a three-fold increase in sales from 2022-2024.
Don't forget the aerospace sector is set to achieve net zero by 2050. Demand for composites will grow as new generation aircraft are built and this sector alone is potentially worth $6.5b per annum.
My target here is £2, as this company is in the perfect position to take advantage of the above.
Interested to know other views
The market cap is currently £17.91m.
USA Warehouse bringing in minimum $100m over next 5 years.
Will the UK revenues go back to pre-pandemic levels of over £20m a year ? The current rate is £14m.
The CEO sees overall annual revenues of £75m.
Surely they will turn a profit now instead of year after year of small losses.
IMO a fairer value surely would be £25m to £30m, and and SP to match above 68p.
Very positive update.
CEO reckons the value has trebled. Let's hope the SP will treble too.
Some healthy director buys would be good signs to the market IMO.
"The current UK and US manufacturing facilities are being expanded to meet this rapid increase in order book and with the new US facility setup, can be doubled again in capacity, to meet further new business and contracted volumed growth, of up to £70m. ..
Andy Beaden, Chairman, Velocity, said: "The recent start of manufacturing at our new facility in Alabama was a major milestone and demonstrated the significant progress we have made over the last 12 months. We have trebled the value of commercial business under contract compared to this time last year. The global aerospace industry continues to recover, and alongside our new US base, we anticipate significant revenue growth in the coming years, particularly in North America."
Overall look to be on track. UK/EU production was nearly £1m ahead of Cenkos estimate (in Jan) which made up for a similar shortfall in the US. The US is not lost work, just delayed, and they are now build on their manufacturing there.
In a past presentation they commented about how GKN are good at supporting supply lines with credit and ensuring prompt payment this is highlighted in the rns so providing there are no major hiccups they should be OK for cash flow.
The second half will be key, if they show the expected revenues/profit then this should fly.
Nice to see a few decent buys going through this morning in anticipation of further contract news.
Hope to see this have a nice run back up to previous highs and beyond soon
Bought in a small tranche this morning, and will add next month. Looks well placed now manufacturing is up and running in US. I expect this will be a key trigger for more sales with further announcements forthcoming. GLA