Shares in Velocity Composites Ltd (AIM:VEL) fell 10% after the aerospace supplier warned that delays in ramping up production would weigh on short-term performance, despite posting its first positive adjusted earnings since before the pandemic.
The company said revenue for the six months to 30 April dipped slightly to £10.4 million from £10.7 million a year earlier, reflecting slower-than-expected increases in production rates at key customers such as Airbus and Boeing.
Adjusted earnings before interest, tax, depreciation and amortisation rose to £0.3 million, up from a £0.2 million loss, as internal efficiencies and improved pricing offset lower volumes.
Management now expects full-year revenue to remain broadly flat compared with 2024. However, margins are forecast to improve following the recovery of past inflation-related cost increases.
The group said its US operations, which are undergoing a complex qualification process with a major aero-engine customer, are well positioned for future growth once approvals are finalised. Cash at bank stood at £1.2 million at the end of April.
The stock dropped 2.7p to 24.5p.