Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
Gavster, good point and you could read a lot into the issues with Boeing, Spirit and the 737 max.
My take on it is that it was Spirit who Velocity were in 'advanced discussion' with last summer regarding a new contract (all presentations pointed to a $100M opportunity with Spirit). Maybe these discussions have now been put on hold given the issues/audits ongoing with Spirit, Boeing and the 737... who knows. Also articles pointing to Boeing buying Spirit back may hamper any new contracts being placed.
It would be interesting to know what parts Velocity were manufacturing for the 737 max through Spirit, does anyone have any info on this?
If these drop below 30p and with the new ISA allowance around the corner, I think I will be averaging down significantly here. We could really do with a positive update from the company soon.
There will be a lot going on in the background, I have no doubt about that. However, as we have discussed previously they really need to get the large $100M contract up and running smoothly first before taking on another. The company need to time it correctly and ensure that they have everything in place so that they can hit the agreed milestone dates and not have to disappoint the market (regular news flow is good but it must be positive). This means increasing resource, training, plant and machinery, general infrastructure etc. Patience is all that is required here, I understand its not nice to see the price down at these levels, however, if the company play this right, start making profit this year, get the GKN contract running well/hitting milestones and then announce another large contract, I see the share price this time next year being up into the £1-£1.50 range (in my opinion).
Positive update on the main contract. I've changed my stance slightly on the new contracts and at what point they are announced by the company. I wouldn't worry too much on these new contracts yet, they are obviously there and in the pipeline, however, I feel that it's really important to ensure that this first large contract is up and running, teething issues are resolved, they have all of the approvals in place and they start to receive some of the revenue. Once this has all been achieved I would feel more comfortable with the announcements of new contract wins.
If they take too much on at all once then there is a chance they won't have all of the resource or infrastructure required to deliver on time or to cost and quality for any customer, which will ultimately have a huge negative impact on the share price (spread themselves too thin). Slow and steady wins the race here, but a little more media coverage and communication from the company wouldn't go a miss in order to ensure the share price doesn't slide too low
Pretty much as expected. My only concern is the reduction in margin to 18.8%. Hopefully more detail will be provided at 10am.
Very exciting news regarding the MoU with a Tier 1 and the business development plan with another Tier 1, again, hopefully we will hear more information on these opportunities soon!
Overall I'm happy with the update and direction the company is heading in.
Agreed, very frustrating that we haven't even received an update on the new contract discussions, since summer. I understand these can take a lot of time to negotiate and with NDAs in place it is often hard to disclose information but a little bit of communication from the company wouldn't go a miss.
With regards to the money from the GKN contract, this is delayed as per one of the RNS's from last year. This is due to things taking a little longer than expected. This could have a slight impact on the share price when results are announced on 22rd Jan, however, this has been communicated by the company so shouldn't really be a surprise to show the revenue figures reduced and the EBITDA as a negative.
We could really do with a positive update from the company here, shareholders are currently being kept in the dark which does not inspire confidence.
Main points I took from the presentation is that:
● contracted revenue for 2024 has increased significantly to £30-£36M - industry players are approaching velocity. 2022 - £12M turnover, so a large increase
● Due to be 'very profitable' in the second half of next financial year (2024). This is based on the revenues that are already secured
● P&L account will be transformed into a profitable business next year, fixed costs are already set
● Aim is to be £100M turnover in 5 years
● The majority of investment is done, equipment, technology, services, people, US facility
● Significant pipeline of opportunities with large numbers proposed
● Surrounded by large Tier 1 organisations in the US
● No real competitors providing this service, main competitors are the customers undertaking this service themselves which does not provide the cost savings (very niche offering)
● Near term growth supports 10% EBITDA
● Return on capital circa 25%
A decent presentation however, slightly unprofessional towards the end where the question was raised regarding share options, Andy questioned the chap on his understanding of options and it got slightly awkward. I also felt that they weren't really all in sync with each other, Andy B stepped in a lot when the financial questions were posed and answered vaguely by Andrew Hebb. Just my take on it, however, a positive presentation nonetheless.
Would have liked more questions posed on future contracts, discussions with Tier 1's etc. We last heard from the company back in July when they stated they were in advanced discussions with a large Tier 1 organisation, we really could do with an update on that in order to settle the market.
46Gillingham - absolutely! There is no volume here at the moment, hence we are stuck around the 40p mark. It will soon be on radars though and as its been said previously, this one sure motors when the volume arrives.
If you put all of the pieces together here (which have been communicated openly by the company), then you can read into what is about to happen over in the US and Europe. The US facility is way off full capacity, the facility is located bang in the middle of several Tier 1 companies, open discussions are happening and have been for a while, aircraft need to weigh less in order to meet new regulations regarding fuel consumption and velocity have a niche process that works and can save money for the Tier 1's... they are also in a good position with cash due to the recent raise. Everything stacks up nicely.
The company are local to me in the UK (one of my reasons for investing) and people are starting to talk more about their potential to grow and take their positions... not long to go, excitement will soon build - all in my opinion of course ;-)
Hopefully. We are certainly due some news and we all know the company are in advanced discussions with a Tier 1. If we get a December period like last year then I expect this to be well above £1 in Q1 2024. As always stated £2 is my target here
Very interesting and great news potentially for velocity...
https://www.gknaerospace.com/en/newsroom/news-releases/2023/gkn-aerospace-and-ge-sign-major-agreement-on-industry-leading-aero-engines/
Nice clip from the article:
"The ground-breaking technology insertion programmes on the GEnx will focus on alternative material solutions, providing a more sustainable manufacturing footprint for several products currently flying. GKN Aerospace will provide component design expertise as well as its latest technologies, to help drive the GEnx programme towards its targets on carbon emissions reduction targets and cost reduction".
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...