Velocity Composites, a U.K. aerospace-materials supplier, experienced a sharp decline in its shares by up to 29% after announcing that it anticipates a reduction in its fiscal 2023 revenue. This decline is due to a delay in the commencement of an agreement that was announced in December of last year.

At 0847 GMT, the company’s shares were down 13%, or 6.50 pence, at 44.0 pence. Earlier in the session, it had fallen to a low of 40.80 pence.

Velocity Composites has stated that it is currently engaged in discussions with the customer and now expects the agreement to commence in January. This delay in starting the agreement is attributed to the outsourcing of critical kits, which were originally scheduled to begin in March of this year.

It is important to note that all other aspects of the five-year agreement remain unchanged.

As a result of this delay, the company’s projected revenue for this fiscal year has been revised downward from GBP5.0 million to GBP2.2 million ($2.8 million).

Additionally, Velocity Composites now expects to report revenue between GBP15 million and GBP17 million for the year ending October 31, along with an estimated loss before interest, taxes, depreciation and amortization ranging from GBP1.2 million to GBP1.6 million.

Looking ahead to fiscal 2024, the company foresees a significant upswing in revenue, with projected figures ranging between GBP30 million and GBP36 million. Furthermore, they anticipate a return to profitability at the Ebitda stage, with estimates falling between GBP1.7 million and GBP2.5 million.

“In the next financial year, we will see a transformational upturn in annual revenue at Velocity,” Beaden added. He also highlighted the company’s substantial production capability and engineering resources in the U.S., which, combined with organic growth in the U.K., will contribute to their profitability.

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