Velocity Composites Share Discussion Threads

[timbo003] 24/6/2019 07:40

The interims make pleasant reading and the shares look good value at these levels

Enterprise value of around £3M, revenue of around £25M and growing.

It would be good to understand a bit more about the disagreements between the current BOD and the founders.

[timbo003] 14/6/2019 07:33

That it very significant news released this morning

I wonder if any of the MMs have been short in anticipation of a plentiful cheap supply from VCT forced sellers?

It would not surprise me to see the shares rise back to the IPO price (85p/share) in the next few months, given that the perceived VCT overhang problem is likely to go away.

[spooky] 12/6/2019 14:11

If its one then they may almost be done, if its more than one then there is a way to go.

[timbo003] 12/6/2019 13:51

Just found this from 2017



Hargreave Hale were acquired by Canaccord recently, so hence the name change.

[timbo003] 12/6/2019 13:47

These are the IIs with notifiable stakes (taken earlier today from the Velocity Composites web site which states that these numbers applied on April 10th 2019)



It looks like their are three VCTs/EIS funds in there who will probably be looking to unload at some stage.

Octopus, Canaccord and Amiti

[spooky] 12/6/2019 09:05

Think we are working off the remains of the 550,000 seller at 17.00p on May 20th.

[spooky] 12/6/2019 08:56

Well i've picked up 100, we'll see how this plays out.

[timbo003] 12/6/2019 08:42

Spooky, it is almost certainly the vcts who got in at the IPO as there is uncertainty on whether VEL will continue to qualify for VCT/EIS tax reliefs, the problem being they haven't been spending the IPO money fast enough!

[spooky] 12/6/2019 08:34

They look potentially very cheap, wonder who the aggressive seller is/has been recently?

[timbo003] 12/6/2019 08:06

No numbers given in today's announcement, but certainly sounds impressive

[eezymunny] 09/5/2019 15:17

The trend in revenue is generally up, yoy. Gross margins low, but if they can keep growing the top line maybe some decent profits will eventually drop to the bottom line. Balance sheet is so strong that it doesn't need massive profits to justify a much bigger market cap IMO.

[carlo sartori] 09/5/2019 10:09

A bit of upward momentum at long last!!

[yump] 05/11/2018 08:17

Looks to me as if the changes a while ago were to move the business to more operational management, which often means the founders are not the right people for the job, so they were moved to one side. Perhaps they were having a bit of a free lunch.

Always a difficult process, but should have been agreed much earlier and doesn't look like its been handled well.

[jonwig] 05/11/2018 08:00

I haven't followed this company for a long time, but it's sad to see a niche bit of UK industryu tearing itself apart.

[yump] 04/9/2018 18:38

Strange posts, are you a bot still being programmed ?

[yump] 04/9/2018 09:13

Why not make it 1p - that would be a funnier post.

[yump] 04/9/2018 08:12

I wonder if Brexit is causing this compendium of delays ? One of the problems of being way back in the supply chain is you have little control.

[yump] 30/7/2018 17:04

Decided to put a toe in recently. Its a proper industrial business, the composite market appears to be in growth, their revenue is growing quite fast and they're getting contracts, so its not like a new widget business, trying to convince customers that their widget is better than others.

Just the minor! issue of profitability to deal with... so I'm making an assumption that they've done their viability sums correctly, with some wriggle room.

Can't imagine its going to be easy though - setting up businesses in different EU countries with the instability of Brexit / possible exchange rates etc. etc.

[yump] 09/7/2018 09:31

fwiw I think its rare to find much detail about specific sales gains, losses and costs in any smaller businesses, even though most of it is probably not competitively sensitive. Most small businesses start up with basic financial reporting and its only when they are floated that the need for more detail becomes apparent, although they're still not obliged to do it.

I'm still looking into VEL, but they certainly don't appear to be in the group of smaller tech. businesses that BS their way through. There doesn't seem to be any hype here.

Lack of clarity isn't really in the same league as BS !

My main concern is whether its potentially interesting enough to gather more investors IF it grows into profit and whether its very much at the mercy of events in its markets, that are at least 2 steps removed.

[mtioc] 06/7/2018 15:26

Another mixed bag in recent interims. My initial thoughts.

1. Sales: encouraging growth on H117 and positive outlook. £28m guidance (24%yoy).
2. GM: very disappointing with no real explanation (see below). Suspect it inefficiency at Fareham with ramp up. It would be much easier if we could see site by site performance. VEL effectively sells labour and machine capacity. Some hint that customers have "booked" it and not delivered (and therefore not paid).
3. O/H: also really disappointing increase again with no real explanation. To increase overheads when underperforming is brave at best.
4. Cash: encouraging.

This is another "jam tomorrow" announcement. My (and the market's) patience is wearing thin. Share price will depend on new wins and H2 performance.

I was disappointed in the quality of the interim report (and VEL's reporting in general). Both the chair and CEO reports are vague and basic. I realise there may be commercial reasons for a lack of candour, but if I compare VEL to a XP Power, a long term holding, the contrast is stark. XP Power's reporting allows the private shareholder to understand the business and its drivers (e.g. KPI reporting etc..), without providing detailed commercial information. VEL does not. For example, the chair says the business is looking to increase sales and manage costs, which would not win prizes for insight. The CEO's report is not much better. It appears the house broker gets more detailed information, which at least allows a better analysis of a confusing picture, but this is not generally available to private investors. I don't think the private/institutional shareholder information asymmetry reflects well on the Board (or should be allowed). When the non publics and top 3 institutional account for 68% of the shares, perhaps the Board does not care as much as when the shareholder base is more diversified.

I will wait and see, but am more negative - it appears that the rate of progress is slower than forecast and the governance picture is not encouraging.

MTIOC

[yump] 06/6/2018 11:52

Held off buying for the moment, have to see if I live to regret it. Last few years have been diving in too quickly with some stocks, before there's any change of trend. At least that's my rationalisation if the price escapes ;-)

[yump] 02/6/2018 11:25

Thanks for the detailed posts from everyone - very helpful. Was looking at this a while ago when the share price was spiky and didn't do anything. Think I might get a 'starter' stake next week sometime. It doesn't seem a big ask that if revenue keeps rising at this rate and the gross margin rises a bit, then some decent profits will appear, even if it takes a year or so.

[imjustdandy] 02/6/2018 08:18

I think we could see much more work coming through from Boeing . Good times ahead here. Only 35m shares in issue