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(Sharecast News) - Velocity Composites said on Wednesday that first-half revenue fell as delayed US programme transfers and customer order phasing weighed on trading, and warned that full-year results would be below current market expectations.
The AIM-traded aerospace composite material kits supplier reported revenue of 8.4m for the six months ended 30 April, down from 10.4m a year earlier, while gross margin slipped to 28.0% from 29.0%.
Adjusted EBITDA fell to 0.1m from 0.3m, and the loss before tax widened to 1.0m from 0.6m.
Cash at the end of April stood at 0.7m, up from 0.4m at 31 October, while the group moved to a net cash position of 0.5m from net debt of 0.1m. Its 3.0m UK invoice discounting facility remained undrawn.
Velocity said additional work on the Airbus A350 programme with a UK customer was now in sustained production, while its Fareham facility had closed, with operations consolidated at Burnley.
It said the move should reduce overheads in the second half and improve operational efficiency.
The company said delays at its lead US customer had continued, although final qualification had started in the third quarter and additional programmes had been won and were entering sustained production.
It also reported stronger-than-expected demand from legacy UK customers.
]Chief executive Jon Bridges said Velocity had made operational progress and delivered positive adjusted EBITDA despite customer phasing and delayed programme transfers.
He said the group remained focused on sustainable growth, supported by a stronger net cash position, site consolidation, increasing aerospace demand and opportunities in the UK, US and defence markets.
The board said key civil programmes including the A350, Boeing 737 and Boeing 787 were seeing rate increases, but added that a scheduled change in product mix would reduce second-half gross margins.
As a result, it now expects adjusted EBITDA of about 0.5m for the full year, with cash also affected.
At 1623 BST, shares in Velocity Composites were down 7.77% at 13.84p.
Reporting by Josh White for Sharecast.com.
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