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Velocity Composites confident of meeting full year guidance after first half revenues jump

Revenue in the first half rose 25% despite delays to some contract awards, Velocity Composites said
Shares in the company rose 7% in morning trading

Velocity Composites PLC (LON:VEL) shares gained after saying it remains confident of meeting full-year expectations on the back of growing demand in the aerospace composites industry.

The supplier of advanced composite material kits to the aerospace sector reported first-half revenue of £11.6mln, a 25% increase on the previous year, despite suffering delays to contract awards.

READ: Velocity Composites shares rise after US$6mln contract win

However, the company said the gross margin was affected by unforeseen customer changes and the onboarding on multiple programmes across the UK.

Gross profit fell to £1.8mln from £1.9mln last year while the loss before tax widened to £987,000 from £299,000.

"The six months ended 30 April 2018 have seen growth during a period for the industry incorporating a significant degree of consolidation and corporate change, with the resultant delays in contract award experienced by the company, as previously announced,” said chief executive Jon Bridges.

“We continue to successfully execute our growth strategy through delivering new contract wins and look to progress new manufacturing sites in Europe and further afield."

He added: “Velocity has a clear strategy to capitalise on this growth opportunity and as such, the board remains confident of meeting the market's revised full year expectations, subject to customer demand fluctuations."

Shares rose 7.6% to 68.9p in morning trading.

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