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(Sharecast News) - Aerospace and high-performance composite materials supplier Velocity Composites announced the signing of a five-year work package agreement with GKN Aerospace in the United States on Tuesday, expected to be worth more than $100m in revenue over five years.
The AIM-traded firm said the investment required to deliver the agreement would come from its existing resources.
To support the international expansion, the company said it was developing its first advanced manufacturing facility outside of the UK, in the state of Alabama, which would deliver the agreement.
The initial revenues under the agreement were expected to begin in the first quarter of the 2023 financial year, and would continue through to the 2028 period.
Velocity said the work it would undertake would cover a diverse range of high-performance composite structures across military, civil, and business jet programmes.
"This is a major milestone for Velocity as we make a permanent entry into the US market and expand our long-standing relationship with GKN Aerospace," said chairman Andy Beaden.
"During the pandemic, we worked hard to deepen our relationships with clients and further invest in our technology to prepare for the recovery.
"We believe this agreement will be part of a long-term positive trend from which Velocity will benefit, as customers look to recover from the pandemic and to achieve new and improved ways of working, with a key focus on sustainability, as production rates increase to pre-pandemic levels."
Beaden said the company expected "a step change" in the use of carbon fibre in aircraft structures to improve fuel efficiency and deliver greater sustainability in the industry's move towards net zero.
"We believe this will increase the adoption of Velocity's technology and services to improve manufacturing efficiencies and inventory supply lead times.
"As a company with its roots firmly in the north of England, this Agreement is a significant endorsement of both Velocity's, and the region's, manufacturing expertise from one of the world's leading aerospace suppliers.
"In the future, we look forward to expanding further in the US."
At 1438 GMT, shares in Velocity Composites were up 61.11% at 43.5p.
Reporting by Josh White for Sharecast.com.
