LONDON (Alliance News) - Velocity Composites PLC on Tuesday said its annual loss doubled, while it has engaged in further discussion with its founders over their requests to be re-instated to the company's board.
Velocity, which provides structural material kits to reduce waste from the composites supply chain, also announced that Chief Financial Officer Alan Kershaw will be leaving his role at the end of January. Andrew Hebb will replace Kershaw on an interim basis as the company continues its search for a replacement.
Kershaw announced last September he was stepping down but would stay in his role until a replacement was appointed.
Hebb a "professional interim CFO" has been interim CFO for "several" AIM listed and private companies, Velocity said.
In November, Velocity received a letter from former chief executive officer Jonathan Bridges and co-founders Gerard Johnson and Christopher Banks demanding the reappointment of Bridges and non-executive director Peter Turner to the board.
Together they hold a 42.95% interest in the firm.
Velocity said Tuesday it has engaged in discussions with the group, which are "progressing positively".
Executive Chair Mark Mills said: "In trying to meet all the stakeholders' legitimate requests, the board and the founders are working together to find a solution which suits all parties and ensures the composition of the board is representative of the whole shareholder base.
"We are very conscious of the fact that the on-going uncertainty regarding the relationship between the board and the founders is an unhelpful and detrimental distraction to the day-to-day focus of the company and we hope that a final and satisfactory resolution can be agreed in the near future."
The company also released its results for the financial year that ended October 31, showing a rise in revenue but a widened loss.
Velocity said it pretax loss widened to GBP1.2 million from GBP627,000 the year before. The company's revenue increased 14% to GBP24.5 million from GBP21.4 million in the same period.
The company said the results were below its expectations.
The company's administrative expenses increased 51% during the year to GBP5.3 million from GBP3.5 million.
The rise in expenses was attributed to Velocity investing in its programme management, engineering, operations and functional personnel.
The company said the winning of new work has been delayed as it was unable to show potential customers "in greater detail" how Velocity's products would help. As a result additional engineers were hired.
Velocity said: "We continue to see demand for our services as the aerospace composites industry continues in its 'make more-for-less' period which is expected to continue for some time, and our customers look for new ways to reduce the cost of manufacture, both in terms of material and labour.
"Despite this desire by our customers and Velocity's active engagement with these customers, the group has experienced uncertainty over the precise timing of the award and the onboarding of contracts, and the resultant impact on revenues and profits."
Velocity said trading in the first 11 weeks of financial 2019 has been in line with expectations, in a "historically" quiet first quarter.
The company expects 2019 to be a year of "consolidation and re-building", with a particular focus on returning customer confidence and its sales pipeline. Velocity expects its revenue in 2019 to match 2018.
Mills added: "It's a promising start to the new financial year and, given the internal distractions we have faced recently, underlines the confidence we have in the long-term future of Velocity and the growth opportunity available to us."
Shares in Velocity were down 5.7% Tuesday at 20.75 pence each.
Velocity Comp (VEL)