Velocity Comp Share Chat (VEL)

Not good news. The team need to wake - up and get some new business in

Any response on this to date?

I am writing as a long term shareholder who supported Velocity because of the strategic vision you set out several years ago, particularly the ambition to become “the supplier of choice to all high value composite manufacturers globally for value engineered raw materials.”

However, looking at the company’s performance over the last two to three years, it is difficult to see meaningful progress towards that goal.

Historically, Velocity communicated a strong pipeline of opportunities expected to convert into revenue, yet few appear to have materialised into significant new business. Revenue growth has remained largely flat and there is little visible evidence that the company is gaining the commercial momentum implied by the strategy.

While the company has clearly taken steps to control costs and improve operational discipline, cost reduction alone is not why investors backed this business. The investment case has always been about growth: winning new programmes, expanding the customer base, and leveraging Velocity’s capabilities and infrastructure.

Against that backdrop, several issues are increasingly concerning:

• The lack of significant new programme wins in recent years

• The disappearance of the previously reported opportunity pipeline

• Continued senior appointments without a corresponding increase in commercial traction

• The risk that one of the company’s largest customers may internalise some of the work currently carried out by Velocity

Velocity now has significant capability in place, including facilities in both the UK and the United States. From the outside, this appears to be the platform of a business that should be scaling materially.

What shareholders would like to understand is where the next phase of revenue growth will come from, how the company plans to secure meaningful new programmes or customers, and what the realistic timetable is for delivering the commercial progress that investors have been waiting for.

I would welcome greater transparency around the sales pipeline, the status of key opportunities, and the concrete steps being taken to deliver sustainable growth.

I would appreciate your thoughts.

Have sold out but still keep an eye on this, as hoped it would come good. It appears in a bit of a death spiral, with an expectation that further cash will be required. The question is how low can the SP go? Confidence appears shot in the leadership team to actually deliver anything material

I'm still in as I just can't bring myself to sell at such a loss. I'm still hoping that they may come good with either some automotive contracts or any other market sector except aircraft. The stringencies around the air sector are also what seem to be holding us back but if we can it moving then I'm hoping the Tier 1s may support us.

I do also have some concerns around cash and headroom but my fingers are crossed that things will improve into next year or a buyout comes. Been here around 3 years and will continue to hold, may even average down

I am out as well now. Given the price and volume yesterday and today, someone has more confidence in them than I still do!

I can see the potential and have held them for four years but the outlook for 2026 is just too tight and talk of efficiency savings to get them through it is a red flag.

I had hoped that their cash position by now would have been such, that if they got some new larger contracts, they would have had the resources' to fund them but this is now not the case. I am also concerned that new business may be reluctant to place orders with finances being so tight.

Overall things seem to moving in the wrong direction, I will be back if they can get on track in a year or two.

Yep, I'm exiting. Always someone elses fault, and always jam tomorrow. The issues lie closer to home

Indeed, same old same old again unfortunately. No new business and outlook poor for 2026. Terrible management

Well that was worse than I expected!

This is AIM!

SP's are built on froth!

It's nothing like Surface Transforms. This is a mature established business, which is backed off with a key contract from GKN. It is unfortunately just run like a family business and they are incapable of growing the business beyond it's current horizons.

Can see this one go close to collapsing, before the ''mother'' of all recoveries!

The UK signed an £8 billion ($10.7 billion) deal to sell 20 Typhoon fighter jets to Turkey.

Velocity renewed their contract with BAE to supply materials for the Typhoon for a further 3 years in May this year, so this new order should further help support that contract going foreword.

Https://www.proactiveinvestors.co.uk/companies/news/1079924/velocity-composites-gains-on-10-year-contract-renewal-with-tier-one-aerospace-customer-1079924.html

They had alluded to some contracts running off at one of the presentations (plus someone flagged it on this board), so I was concerned that we could get a downgrade at the year end next month.

At least, as you say, it will support the share price for now.

Welcome news but not really ‘new business’ is it when it replaces contracts with other customers that are coming to their natural end. It will support the SP but won’t give it the lift we’re looking for. Still no new business from our US facility which was meant to open doors to all sorts of opportunities

Report on Bloomberg that they are final going to be allowed to remove the production cap of 38/month on the 737's.

Expected to be 42, by this month then increasing up to 53 later next year.

Airbus A320neo production seems to be picking up after the problems at the start of the year.

Just need some new contracts now.

So the board have appointed both a new CFO and COO in the last 18 months. What they really need is someone in the team that can close some of the proposals that have been hanging around for 5 years plus. We must question if these proposals which we have been told in the pass are in the $100m + range are credible

DD77

Im also getting bored 4-5 years now they have the same pipeline with nothing coming over the line What is going on I thought that why they also opened an unit in the USA to help close a few more deals

I will probably give it another 12 months tops here, they just don’t seem able to deliver. There are no excuses now, OEMs are ramping up, defence sector spending increasing and supply chains easing plus our US facility is up and running. If they don’t deliver in the next 12 months then I don’t think they will and I’ll be taking a loss and moving my capital into something which can deliver a return

We have been waiting years for any of the sale pipeline to come in even with a new commercial director nothing happening.

Hopefully positive.

No real surprises, positive that they’re still expecting to be profitable and cash positive in H2 (which we’re already 2 months into, so they should have an accurate steer) but it still seems a lot of jam tomorrow, which is what we’ve heard over the past 2+ years

Nice to see a steady rise over the past few days, that's for sure. I checked out the companies' website and they have updated the 'company news' section a couple of times over the past 2 weeks (not much prior to then). More notably the write up on 22/05 which shares James Eastburys' visit to meet a potential new customer in the States. A small snippet below from the write up, which I found very interesting:

"James recently embarked on a significant visit to the United States, engaging with key customers and exploring potential new partnerships in this strategically important market. While specifics regarding ongoing negotiations remain under non-disclosure agreements, the visit included interactions with a potential major customer currently involved in an RFQ (Request for Quotation) process. This underscores Velocity’s commitment to actively pursuing new opportunities and solidifying its position in the US market."

I may very well be reading too much into this but a 'significant visit' sounds promising indeed. Hopefully a big RNS next week, prior to results being confirmed on 25/06.

I think it's in relation to sector increases seen, on the back of increased commitments in defence spending etc. Rolls Royce and Filtronic have both seen significant increases recently.

We all know that shares are tightly held here so a small shift in the equilibrium can lead to steep movements, which is what we're seeing. Here's hoping there's something fundamental underpinning this rise though

The rise continues. Leakiness on news from the USA perhaps?

Hi Monkshood

Not sure, it could also be OEM approvals in the USA, the prospect of new contracts with BAE Systems PLC due to the UK/EU's recently increased defence spending levels, finally getting noticed by some retail investors or a fund.

Either way, a jolt back up is very welcome. IMO most holders will be hesitant to sell into this, unless trading averages in comparatively small volumes, due to large number of share placements at 40p (including myself).

Every other rise for quite some time has been sold into.

I did wonder if this was from one of the ex directors following changes to the IHT changes around AIM shares?

It is possible that the sell overhang has finally been lifted, which means that any buying is giving some big rises in what is a fairly illiquid stock.

Solid numbers and solid balance sheet-unfortunately this market doesn’t value solid

Good company which really doesn’t need to be a plc

Always jam tomorrow with VEL unfortunately. However, with Boeing sorting through their problems, and military spending rising, they really have no excuse for not delivering over the next 2 years. If they haven’t by then, I’ll move on to other ventures

I did make a mistake in that revenue target was £27M, now down to £23M which makes it more realistic (£30M was for 2026, now down to £26.6M - Canaccord).

It is good to see they have not had to use the invoice discounting facility this time, so I will meet you half way at 6/10!

Hi Monksmood and all.

Roughly translates to lots of jam tomorrow and a spoonful today. I would rate it a 7/10 given we have positive earnings again after 5 years. Valuations from yesteryear of 10xTurnover would see an SP 100s of % higher but IMO I do think 14m market cap is very cautious from the market. An upwards movement rather than stagnation in the coming year.

I don't see this moving the share price up!

Looking at £27m rather than the predicted £30m of revenue for the year, although this means nearly £17m in H2 needed.

At least EBITDA positive which helps .

Forward progress is slow and they still have not got the full program in the US running. Mention of legacy aircraft phasing out is another negative until any new contracts are announced.

I would mark this update as 5/10!

Only around £20k worth of trades too. Just have to wait for the next update.

As usual any increase is sold into and with the low liquidity the price moves steeply.

Hopefully the TU will cement a rerate (but I am not holding my breath!).

Today has certainly eased any fears that I had for the 22nd May trading update. I was half expecting them to provide an update stating that revenue would be down and more negativity but today's update confirms that we are still on track. Very positive and expect a climb back into the 30's over the next week

Nice general update but very much lacking in any figures. Good news though if revenues can continue at expected levels.

"In line with the Company's other most recently renewed contracts, this contract includes a price increase to account for the increased costs of labour, energy and finance since it was last renewed. This renewal supports the Company's existing FY25 revenue expectations. "

Trading update due 22nd May... hopefully we have some positive news land

Yes, I can say is HTF , 330 and C919 . I just sold my shares

Can you elaborate on that?

Confident why exactly? The share price is not moving in the right direction and there's no dividend, so this stock offers zero value to the investors right now. This is the reality check. Plus I'm hearing some rumours that competitors have overtaken some safran jobs.

The Amati AIM VCT released their January factsheet this morning - in it they note:

"Velocity Composites, who supply composite material kits to the global aviation industry, progressed, reporting revenue growth of 40% and positive adjusted EBITDA for 2024. The company now looks well placed to benefit from strong demand from both the civil and defence aerospace sectors."

VEL are also covered in this interview with Gervais Williams of Premier Miton, who's confident for the future:

Https://www.youtube.com/watch?v=OE9UpRwdNBk

46G maybe I need something stronger indeed, however, if I'm wrong then so is the company... but that wouldn't surprise me!

https://www.velocity-composites.com/investors/financial-calendar/

Jim89 please check you have had the correct medication this morning....Not sure you have the correct dates :)

Hi 46G, good to see you back on here posting 👍

Interim results are 25th June but the AGM is 11th March.

Im I correct in thinking the Interims will be published on 18th March.

Ive had this date in my mind thinking i read it somewhere but now cant find a referance to it.

Then we get a classic Aim company "Snouts in the trough" RNS. This will not do anything for share holders sentiment IMO. The mission right now as far as their shares should be to do the business and get the value back up the recent issue price.

Pretty unispiring but unconcerning presentation. I don't find the delivery very good but the core business is good and should deliver rewards. I just hope they have the capability to deliver that at a high level

Based on the results, with no new contracts, both brokers have Velocity at 60p/share target based on a 1.2x multiple (a 30% discount to peer average).

If Velocity hits its five-year target of £100m revenues and a 10% EBITDA margin by 2028 , upside potential of ~4x to 122p at 10x EV/EBITDA.'

Additional funding doesn’t look like it’s required which is positive

The final work package hasn’t been signed off though, which was expected to happen in 24. Now expected for H1 25.

So a mixed picture for me, overall broadly positive but not out the woods yet and still need to see some other contracts coming in

Total revenue increased 40% to £23.0m

US revenue quadrupled to £7.9m

"The Company expects further revenue growth in FY25 and beyond"

Our market cap is still only £16m currently...

Surely a rise of 50% to 100%, meaning the company would be worth £24m or more, is not out the question here... ?

Nice movement here this week. Stabilising around this price before results and potential news of new orders. Volume has increased nicely, can see a significant rise coming here if they get another $100M deal

If I wasn't in deep, and for the long term, would be tempted to see on the rumour.

Must be a news leak

Hopefully the start of the long overdue rerate here. Very promising, big news due?

Appreciate the time you have taken to write that Jim 😀

I hope your predictions for mid year are correct.

We are certainly starting to see some larger volumes here which is reassuring. Some nice buys went through yesterday and the days before, although some larger sells were also recorded. Although I did see a lot of big round buys being made which seems to me that someone is maybe taking a position.

My view or more hope is that people are starting to buy in for the financial results on 29/01 where velocity will announce a positive EBITDA, this should hopefully give us a little lift and provide market confirmation that the company are doing things right and in a controlled and stable way.

However, I would also like to assume that we are now due some positive news (I know us long term holders have been waiting a while).

If the company play this right, positive news could hopefully be announce just before the results are presented, which will give us an even bigger lift and provide some form of stability at those higher levels. I've been disappointed before here, but I still have faith that Velocity will be trading around the £0.70p/0.80p (£40M mcap) mark by mid year, now that they are turning a profit.

The economic climate and the issues with boeing have hit us hard, as a result I would like to see the company move into other areas such as electric vehicles and wind power etc. in order for us not to have all of our eggs in one basket. I do feel that the company have maybe been in a stabilisation period for a while, ensuring that they turned the EBITDA around prior to entering into new contracts and not taking too much on until stable.

Let's wait and see what they can pull out of the hat in the next few weeks for us shareholders🤞

Does anyone have any ideas why trading volumes are higher ?

The harsh reality of pragmatism. Yep, results are the only thing that will ultimately drive the price.

The options are taken, so now the Cannacord pump makes sense.

Gavster, we have had quite a few interviews and presentations over the past 2 years, which have only had generally a negative impact on the share price. I keep saying it but what we really need is to see this potential pipeline of new business (200M+) starting to be realised. This in my opinion is the only thing that will have a large and positive effect on the share price. My fingers are crossed for 2025, if they start to confirm new large contracts then this will soon double from these in the blink of an eye.

..Well so far the Cannaccord recommendation has done really well for those that bought early on the news day or for those who knew it was coming out. Bravo, you know how to smash a market cap for millions so you can earn a few thousand quid. Good thing VEL don't need to issue more shares.

As a LTH we must hope there are a few more of these recommends, and more presentations and interviews.

Thanks for sharing Rivaldo - Now thats more like it, nice to see some proper exposure, and an up tick in volume.

They summarise:

"Strong US growth coming through

Canaccord Genuity view Revenues up 40% in FY24E with a £0.1m EBITDA beat Today's FY24 trading update for the year to 31 October is ahead of revised guidance, with Velocity expecting to report revenue growth of 40% y/y to £23.0m (CGe: £22.8m) and an EBITDA result of £0.4m (CGe: £0.3m). This represents both a strong top-line performance and a return to EBITDA profitability as US production volumes continued to ramp up, input costs were passed on to improve gross margins and operational efficiencies were realised. A £0.7m net cash position is better than our expectation of £0.4m net debt, reflecting a neutral working capital position y/y, with balance sheet liquidity in a healthy position to support future growth.

Looking ahead to FY25 we anticipate final sign-off on Block 4 of the US contract (worth ~$8m per annum) could be achieved in H1 to complete the customer onboarding process, enabling US production and revenues to build towards full run-rate levels.

Our unchanged FY25E estimates anticipate revenue growth of 17% to £27.0m underpinned by contracted US volumes and record customer order backlogs, while EBITDA climbs >4x to £1.7m as operational gearing benefits are realised. We also assume an inflection to positive free cash generation to further strengthen the group's net cash position. Beyond this, a new business pipeline worth £200m in a growing composite market continues to provide blue-sky upside as Velocity targets £100m of revenues and a 10% EBITDA margin by 2028. We maintain BUY with a 60p EV/Sales derived target price."

"Shares look materially undervalued

We think EV/Sales is appropriate as Velocity scales up its revenues and sustainably builds EBITDA margin towards its 10% target. With the shares trading on a 2025E EV/Sales of just 0.4x, we value Velocity at 60p/share based on a 1.1x multiple which is a 30% discount to peer average. This suggests upside of nearly 3x from the current 21.5p share price. If Velocity hits its five-year target of £100m revenues and a 10% EBITDA margin by 2028, our discounted sensitivity analysis suggests blue-sky upside potential of ~6x to 122p at 10x EV/EBITDA."

Long overdue a rerate for me-too cheap

I bought in here on the bell and afterwards for the first time this morning having watched for years, for the same reasons as others below.

The m/cap is low given the potential, achieving positive operating cash flow and VEL's now being into positive EBITDA territory and on the cusp of making a real PBT.

With VEL forecast to achieve decent surplus cash for this year, a small fundraising at current or elevated levels to accelerate growth would be fine anyway.

VLE would appear to be in the right place at the right time to meet record order backlogs and to help achieve improved efficiency and higher sustainability targets.

Well all the worries are gone, for now, lets see if the sentiment can return to positive, especially since there are a lot of recent shareholders that invested in the funding round at a much higher SP.

This should quash any suggestion of a fund raise being needed(unless they land another big contract).

To get the auditors to sign off the accounts they would have needed to show they were a going concern, so by this stage it was already looking OK on that front.

Despite some headwinds they seem to have navigated the second half well.

Looking forward to seeing a positive response in the share price and profitable next year.

A positive adjusted EBITDA* of £0.4m,

Finally great news

Trading Update & Notice of Results

Velocity Composites plc (AIM: VEL), the leading supplier of composite material kits to aerospace, is pleased to announce its trading update for the 12 months ended 31 October 2024 ("FY24"). The preliminary figures set out below are subject to final audit. The Company expects to publish its FY24 results on 29 January 2025.

Highlights:

· Revenue was up 40% to £23.0m (FY23: £16.4m), driven by growing US sales

· A positive adjusted EBITDA* of £0.4m, the first time since the Covid-19 pandemic (FY23: adjusted EBITDA loss £(1.6m)

· Maintained a healthy cash and liquidity position with cash-inflows from operating activities of £0.4m (FY23: outflows of £1.8m)

· The Company anticipates further growth in FY25 and beyond, as higher monthly production rates are expected in the global aerospace industry

I also work in the industry. A prime infact. This company has a good reputation it's just the market at the moment is in complete meltdown thanks to a starmer government or fear of it at the least. That along with Trump coming in January and then there's all the scuffles going on around the globe. The markets are very volatile at the moment but those who see opportunity see it. Those who do not simply do not. You have to be first to not be last. From the whispers I get CF expendable drones is the future market for this company. I just hope they exploit it.

The SP is already on its a... so too late to worry now. The directors are not doing a good job. It's actually very poor, no regular updates, talking about new contracts but hiding behind FAI process. I work in the industry and let me tell you if you do the right, the work will come your way, no excuses. Another thing is that October to December are always very quiet is the industry with most of the staff cleaning and not making anything, so don't expect big turnover in the 2nd half of 24 . I would like to know how the orders book looks like for January 2025 Vs 2024

No one knows Bridges personal circumstances so it’s pointless speculating.

VEL has been hammered on the back of Boeing woes and reduced aircraft production from both Boeing and Airbus. It will recover but there’s clearly a fear that they may need to raise additional capital in the short term to see them through

Yes the pipeline.

Ive been waiting 18 months for something else to land. Even written to the BOD knowly hitting a brick wall

Agree, a slightly odd move from Bridges. He would have known that selling a mere 150k of his over 5M holding would affect the share price. It makes very little sense to me why you would do that as the CEO, when the share itself needs some positive news to stabilise. Maybe there is more behind this, but who knows as us shareholders are kept very much in the dark here by the board. Still holding and will continue to hold long term but frustrated... waiting patiently for this '£250M+ pipeline' to be realised