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Velocity Composites shares rise after US$6mln contract win

The customer wasn’t named but was described as a tier-one manufacturer of components for jet engines used on Airbus A320 and Boeing 737
Boeing 737
Flying high: The shares received a boost, but are still trading below their listing price

Shares in Velocity Composites Ltd (LON:VEL) rose 4% after it unveiled a new contract worth up to US$6mln.

The customer wasn’t named but was described as a tier-one manufacturer of components for jet engines used on Airbus A320 and Boeing 737 aircraft. The deal runs until 2020.

READ: Velocity Composites surges as it inks supply agreement for Boeing programme

Chief executive John Bridges said: "This new business award on the largest and fastest growing engine programme in the world is a significant win in its own right.  

"In addition, with the work being based in continental Europe this further enhances Velocity's growth into this territory, and will be a contributing programme for a new manufacturing site for Velocity in mainland Europe in due course.  

"Whilst the company determines the right time and location for this site to be established, the composite material kits will be supplied from Velocity's UK sites."

The stock rose 2.5p to 65p, but was still 20p below the price at which it was listed in May last year.

"The shares continue to trade at a discount to its IPO price and offer good value at these levels," said David Buxton, analyst at City broker finnCap.  

"Today’s announcement should be taken well. We continue to see strong growth opportunities and significant share price upside over the medium term."

 

 

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