Shares in Velocity Composites Ltd (AIM:VEL) rose 15% on Monday morning after the company secured a three-year renewal of its long-standing contract with BAE Systems, the UK’s largest defence group.
The agreement extends a relationship that began in 2010 and covers the supply of advanced composite material kits for major aerospace programmes, including the F-35 and Typhoon fighter jets.
Teams from Velocity work closely with BAE at its Samlesbury site in Lancashire, supporting inventory management and continuous improvement initiatives.
The new contract includes a price adjustment to reflect higher labour, energy and financing costs since the last renewal, in line with terms agreed in other recent deals. Velocity said the extension underpins its revenue guidance for the current financial year.
The update was welcomed by investors, who are betting on the company’s ability to maintain momentum in the defence and aerospace supply chain amid broader cost pressures in manufacturing.
The shares rose 3.5p to 27p.