(Alliance News) - Velocity Composites PLC on Tuesday announced the successful manufacture of the first composite production kit from its new manufacturing facility in the US state of Alabama.
Velocity Composites is a Burnley, England-based supplier of composite material kits to aerospace and other high-performance manufacturers. The kits aim to reduce all forms of waste from the composites supply chain.
Shares in the firm jumped 11% to 37.23 pence on Tuesday morning in London.
The company said the manufacture of the first production kits is "major milestone" at the site, which was built to support a five-year work package agreement announced in December with GKN Aerospace. The agreement is expected to be worth in excess of USD100 million in revenue over five years. GKN Aerospace is part of Melrose Industries PLC.
A first article inspection plan, agreement with the customer, continues to be implemented. Under the plan, one of each composite kit will be manufactured, delivered and verified before proceeding to sustained volume production.
The final programme is scheduled to be completed within this financial year and will enable a full rate of production to commence either at or before the next financial year, Velocity said.
The kits for the first programme are currently being transferred and account for approximately 18% of the total contract annual revenue, Velocity Composites said.
Work is already underway for the larger second programme, which accounts for a further 25% of the total contract annual revenue. This means that approximately 43% of the total contract annual revenue is on schedule to be approved, the company said.
Chief Executive Jon Bridges said: "This is a major milestone for Velocity Composites as we expand into North America. The whole Velocity team, both in the US and UK, have worked incredibly hard to deliver a fully operational site, a well-trained team, and a stand-up and approval plan ready to start delivering flying products to our launch customer. The site can move forward into production ramp-up with continued support from the UK team and close collaboration with our customer to ensure a smooth transfer of the entire project."
By Heather Rydings, Alliance News senior economics reporter
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Velocity Comp (VEL)