Trading Update

5 November 2025

Velocity Composites plc

("Velocity" or the "Company")

Trading Update

Velocity Composites plc (AIM: VEL), the leading supplier of advanced composite material kits to the aerospace market, announces the following unaudited trading update for the twelve months ended 31 October 2025 ("FY25"). The Company expects to publish its FY25 Results on 27 January 2026.

Highlights:

FY25 Trading

The Company has made good progress in terms of driving further efficiencies and improving operating margins across various areas. This has meant increased gross margin and reduced overhead costs.

Velocity was pleased to announce during FY25 a significant contract win for a major Tier One Company on the A350 programme, as well as the renewal of contracts at a defence OEM. The Company continues to work on new opportunities in the US, UK and EU that can be serviced from existing facilities, including servicing customers in the EU using a forward stock location model.

However, trading in H2 FY25 has been adversely affected by lower-than-expected Airbus A350 production rates. The rates are below the level that Airbus had previously planned in part due to the widely publicised supply chain issues and delays. Velocity's North American operations have also been impacted by delays in programme transfers from the Company's Tier One US customer, related entirely to issues between the US Customer and the OEM.

As a result, unaudited revenue is expected to be £20.7m (FY24: £23.0m), below market expectations and approximately 10% lower than the prior year. However, adjusted EBITDA for FY25 is expected to show a significant improvement over the prior year, continuing the progress made in H2 FY24 and H1 FY25, a result of enhanced operational efficiency. Given the availability of invoice discounting facilities, the Company's liquidity remains strong.

We are working closely with our US customer to help them unblock the causes of the delays and are in constructive discussions to complete the transfer process as soon as Velocity is enabled.

FY26 Outlook

As a result of the continuing delays in programme transfers the US, and our European business being impacted by customers moving business to other facilities we do not have a kitting agreement with, the Board anticipates FY26 revenue will be lower than current market expectations.

That said, adjusted EBITDA is expected to show a further improvement on FY25 as the Company continues to benefit from a combination of further operational improvements and overhead restructuring. The overhead reduction activities are likely to yield further annualised savings of approximately £0.6m in addition to the £0.6m achieved in FY25.

FY26 cash requirements are expected to be manageable given the availability of finance facilities, positive adjusted EBITDA and cash generation during the year.

Jon Bridges, CEO, Velocity, commented: "We are positive about the long-term outlook for Velocity and the industry, given the projected significant increases in passenger traffic over the next decade and beyond. This optimism is in the face of the continued delays we have experienced in the US and the slower than expected ramp up of existing civil aircraft programmes. Demand for civil aerospace and defence programmes is positive, and the Company is working on new opportunities on ascending programmes in the UK, EU and US that utilise our technology and digital supply chain manufacturing services that can be fulfilled from our existing facilities. We remain focussed on cash generation and improving operational efficiencies further to ensure that we will be in a strong position to return to top line growth when production rates increase."

Market abuse regulations

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication of this announcement, this information is now considered to be in the public domain.

Enquiries:

About Velocity Composites plc

Based in Burnley, UK, Velocity is the leading supplier of composite material kits to aerospace and other high-performance manufacturers, that reduce costs and improve sustainability. Customers include Airbus, Boeing, and GKN.

By using Velocity's proprietary technology, manufacturers can also free up internal resources to focus on their core business. Velocity has significant potential for expansion, both in the UK and abroad, including into new market areas, such as wind energy, urban air mobility and electric vehicles, where the demand for composites is expected to grow.