Velocity Composites Share Discussion Threads

[melody9999] 23/8/2023 18:50

IMV a positive announcement re FD position today.

I can provide a little colour based on the visit to VEL on 26/7. This was hosted by Andy Jon and Adam.

After the visit I emailed Andy and Jon to thank them for their time/hospitality and offered some thoughts. I have copied pertinent commentary below:

"There were some comments (from members of the group) that Adam did not contribute much. Whilst he has only been in the role for a few months, he should have a firm grip of top line revenue, EBITDA and cash numbers as recently reported to the market, Whilst that may be the case, it did not come across in his responses. Maybe he was uncertain as to what he could say? It will be important to have a confident and assertive FD in the future."

In Andy and Jon I think we have 2 top class execs. Unfortunately, IMV Adam did not have the same gravitas. I am very comfortable that today's RNS allows VEL to strengthen their management team in the future.

Sometimes an FD departure can be a red flag for investors as it points towards finance issues or even impropriety. But I feel very confident this is not the case here - this is about the person not the finance.

[someuwin] 23/8/2023 14:29

All very sudden. Stepping down immediately and leaving leaving company next Thursday. No thank you or wishing well for the future. Suggests a major falling out over something.

"Velocity Composites plc (AIM: VEL.L), the leading supplier of advanced composite material kits to the aerospace market and other high-performance manufacturers, announces that Adam Holden has stepped down from his position as Group Finance Director and Company Secretary with immediate effect. He will leave the Company on 31 August 2023 and remains committed to the Group until his departure, providing an orderly handover..."

[hydrus] 23/8/2023 14:12

CFO leaving with immediate effect after only ten months in post. If he had been in position for a long time I'd be a little concerned but I wonder whether he has been managed out? Would be good to clarify why he's gone. Could be linked to the fundraise I suppose.

[uncle_sam] 16/8/2023 12:33

All of my requested allocation received. And am voting for all resolutions proposed for AGM.

[janeann] 14/8/2023 17:28

Well I got all I asked for!

[melody9999] 14/8/2023 15:23

Think you will get full allocation Husbod - only 500K taken up through REX. Thought the retail offer was always going to be difficult in this market - especially as only open to existing shareholders.

Credit to the company for managing to raise funds at all - esepcially at a smallish discount - in the current environment.

[husbod] 14/8/2023 13:33

Good post melody and totally agree. Obviously if I disagreed I wouldn't think it was a good post!Anyway I've also bid for more shares and will be interested to see if I get my full allocation.After all no point being diluted if you believe the story here.

[melody9999] 14/8/2023 11:35

I looked at fund raising RNS in detail over the weekend - like others the raise was larger than I expected.

1 I think our BOD know their existing costs and timescales re GKN – we only had the delay RNS on 260723. I am also cognisant our BOD face significant dilution so would surely seek to minimise the amount raised.

2 However if the new contract – which I suspect could be with Spirit – was signed and kicked off before the end of 2023, then they would need to resource this and incur set-up costs before feeling the benefits of the GKN revenue. New customer would likely want to ensure their new supplier (VEL) was well financed before contracting. So that contract could be contingent on a successful fund raise. In which case we could get some positive news shortly after the GM.

3 Clearly VEL see significant opportunities for growth, both with existing and new customers, and this investment allows them to strengthen the teams that deliver that growth, whilst also investing in the relatively modest additional capex to allow the production sites to achieve higher volumes.

I've bought into the REX offer and will look to add more in the 40's as I think the future looks bright here.

[cooper30] 12/8/2023 07:43

Just had chance this morning to read the full RNS from earlier this week (a lot of reading). @someuwin - i think this is how it will work...first admission is only for the initial shares of circa 4.25M shares, this is for retail, subscription and firm placing shares only. This will total 41,170,785 in issue at this point (the figure stated in the announcement). There is then a second admission where shares will come into play in October of this year and this will be for the additional 12.5M EIS/VCT shares. Total shares in issue at this point will be circa 53.6M..
I think I have read this right, a lot of info to take in but happy for anyone to correct me and adjust figures.
I have requested to take part in the subscription at 40p through HL.

[geraldus] 11/8/2023 07:51

Does make you wonder how far out the next large contract might be.

[gopher] 11/8/2023 07:45

With hindsight this placing was probably inevitable after the delay to the GKN contract delay was announced. I would personally have preferred it to have been made after the announcement of good news such as anew contract as it makes the investment decision easier

[dunns_river_falls] 09/8/2023 15:53

Agree with you someuwin - shouldn't the share count be c.52m after the placing?

[janeann] 09/8/2023 09:43

well missed the rns this am but now had my invite from aj bell to participate at 40p per share. sizeable discount too

[husbod] 09/8/2023 08:20

Must confess I wondered if such a relatively small company could cope with the GKN contract without raising additional funding plus of course they have hinted at another major contract in the offing.If the funds are used for expansion then the dilution will be worthwhile and raising funds like this is after all one of the raisin d etres of the stock market. And at least we're getting a chance to participate unlike a pure placing.I see it as a positive

[someuwin] 09/8/2023 07:09

Incidentally, I think they've got their maths wrong. They say "Following First Admission, the total number of Ordinary Shares in the capital of the Company in issue (assuming full take up of the Retail Offer) is expected to be 41,170,785"

I think this figure should be much higher.

[lauders] 09/8/2023 07:02

So in theory a 13% drop is on the cards today or somewhere near? I am sure it will come good in the future but dilution is never welcomed.

[someuwin] 09/8/2023 06:55

Bigger placing than I was expecting.

[husbod] 28/7/2023 12:59

Thanks for the feedback melody which with the morning RNS confirms my belief in this niche company .An interesting rest of the year I suspect.

[gopher] 28/7/2023 07:59

Thanks for getting this done. I am more comfortable with holding now ; if progress can be demonstrated then extra funding would not be an issue for me

[lauders] 28/7/2023 00:09

Thank you for your report back on the visit Melody. It really helps other investors when someone is so willing to share their experience. Great to see you are confident of the company's future. We may stay around this share price level until such time as any new contract news comes along.

[cooper30] 27/7/2023 16:43

Melody - Many thanks for sharing

[melody9999] 27/7/2023 16:16

Cooper - re set up costs you are probably right and yes maybe they have other funding options. Will be more urgent if a new contract is signed off.

Given we are talking aerospace, I was surprised at the small size of parts of the kits they create. 1300 FAI kits to sign off and 50,000+ parts within those kits.

But then thats what makes the automation, data and tech that VEL have created valuable to customers and difficult to replicate.

Yep I'm confident the company has a bright future.

[cooper30] 27/7/2023 15:55

Also Melody I forgot to mention, thanks for the feedback, much appreciated

[cooper30] 27/7/2023 15:52

I tend to agree, however, are the burn figures not slightly skewed in this period due to the US facility setup costs? These costs had to be incurred upfront by the company. Now it is set up, spend should just be running costs/overheads. I do agree cash is required, however, I wouldn't be so quick to think of a capital raise, as there are potentially other options... obviously with AIM companies it is always a risk. Melody, did anything that you saw yesterday raise your eyebrows? Obviously following on from the 7am RNS which you would have been aware of... or is your confidence in the company even greater now?