Velocity Composites Reports H1 Revenue Dip but Maintains Positive EBITDA and US Progress

Velocity Composites has put out a mixed but broadly steady H1 2026 trading update. Revenue is down, but the company has still stayed profitable on an adjusted EBITDA basis, improved its net cash position, and says full-year expectations are unchanged. For a smaller AIM stock in aerospace, that combination matters.

The headline number is the revenue dip to £8.4 million from £10.4 million. On the face of it, that is not pretty. But management is saying this is mainly about timing, with shipments pushed from the first half into the second half, rather than a collapse in demand.

Velocity Composites H1 2026 trading update: the key numbers investors need to know

Metric	H1 2026	H1 2025 / Prior period
Revenue	£8.4 million	£10.4 million
Adjusted EBITDA	£0.1 million	£0.3 million
Cash at bank	£0.6 million	£0.4 million at 31 October 2025
Net cash excluding lease obligations	£0.4 million	Net debt of £0.1 million at 31 October 2025
CBIL loan balance	£0.2 million	£0.5 million at 31 October 2025
Invoice discounting facility usage	Undrawn	£3 million facility available

The company also confirmed it expects to report unaudited H1 2026 results on 24 June 2026.

Why Velocity Composites revenue fell in H1 2026 – and why management is not panicking

Revenue fell by £2.0 million year on year, which is the obvious weak spot in this update. Velocity says that was driven primarily by the phasing of shipments from H1 into H2, delayed order timing from UK customers, and material supply delays affecting its US operations.

That explanation is believable, but investors should still treat it with a bit of healthy caution. “It all lands in H2” is a common line in trading updates, and it only really works if the second-half delivery actually turns up. The good news is management has kept full-year expectations unchanged, which suggests order visibility is decent.

Another useful detail is that the disrupted US material supply has now recommenced. Velocity says it expects to recover the lost sales associated with that material in H2 2026. If that happens, the soft first half may end up looking more like a temporary wobble than a trend.

Positive adjusted EBITDA for a third straight half is a bigger deal than it sounds

Adjusted EBITDA came in at an expected £0.1 million. That is lower than the £0.3 million delivered in H1 2025, so this is not a story of surging profitability. Still, it is the third consecutive half year of positive adjusted EBITDA, and that matters.

Adjusted EBITDA is a profit measure before interest, tax, depreciation and amortisation, with some items adjusted out. It is not the same as cash profit, but for a business like Velocity it is a useful sign that the underlying model is becoming more stable.

Crucially, the company says it maintained stable gross margin while lowering overheads. That tells you the revenue drop did not trigger a collapse in operating performance. In plain English, they sold less in the half, but they did a decent job protecting the economics.

US growth opportunity at Velocity Composites: delayed, but not derailed

The US remains the big strategic opportunity here, and also the big source of frustration. The transfer of the final work programme from Velocity’s first US customer has been delayed, but the company now says the process is committed to begin in H2 2026, with completion anticipated as the group enters FY27.

That delay is clearly a negative. When a smaller supplier is waiting on a major customer programme transfer, timing matters. Delays can hold back revenue, absorb management time, and test investor patience.

But there are some genuinely encouraging points tucked into the update. First, the rates on this programme are now likely to be significantly higher than previously expected because end-customer demand has increased. Second, extra work packages outside the original contract scope, including process materials, are also being transferred and have already started contributing revenue.

Put simply, the wait has been longer than planned, but the prize may have got bigger.

Velocity also says it is in advanced discussions with prospective US clients and has appointed a US Sales Executive. Its Alabama facility has successfully completed its NADCAP audit and achieved merit status. NADCAP is an industry accreditation used in aerospace manufacturing, so this supports credibility with customers and should help commercial discussions.

UK aerospace demand and Burnley consolidation help steady the ship

One of the more reassuring parts of the update is the strength in the UK business. Sales to legacy customers have come in higher than management originally expected and are set to contribute through H2 2026, and potentially beyond.

That matters because it reduces the pressure on the delayed US onboarding. In fact, the company says higher demand from legacy UK customers is offsetting the delayed final US programmes in the short term. That is exactly what investors want to see – one part of the business covering for another while the bigger growth engine catches up.

There is also evidence of operational progress. A previously announced programme with an existing customer has passed First Article Inspection and ramped to full production in Burnley. Velocity has also picked up smaller customer wins across a range of programmes, including new engagements at former Spirit AeroSystems sites in the UK.

On efficiency, the satellite facility at Fareham has now been closed, with all production transferred to Burnley. That should reduce overheads and improve operational efficiency. For a company of this size, footprint discipline matters. Fewer sites, better utilisation, lower cost base – that is usually the right direction.

Velocity Composites balance sheet: small numbers, but improving financial resilience

The balance sheet is not huge, but it is moving the right way. Cash at bank was £0.6 million at 30 April 2026, up from £0.4 million at 31 October 2025. More importantly, the company moved from net debt of £0.1 million to net cash of £0.4 million, excluding lease obligations.

It also remains undrawn on its £3.0 million invoice discounting facility, and the outstanding CBIL loan balance has been cut to £0.2 million from £0.5 million. Management says the balance sheet has sufficient headroom, and based on the figures disclosed, that looks fair.

This does not mean Velocity is swimming in cash. It is not. But going from net debt to net cash while staying EBITDA positive is a solid sign that the business is under control rather than under strain.

What the aerospace market outlook means for Velocity Composites shareholders

Management sounds constructive on the wider market. Production rates on major civil aerospace programmes are improving, with Airbus and Boeing working through substantial orderbooks. Velocity specifically highlighted positive trends on the A350, B737 and B787 platforms.

There is a note of caution on geopolitics and input costs. The company says there has been no short-term impact from the Iran conflict, but it is watching for any effect on airline traffic, customer demand and supply chains, especially because a significant proportion of materials are oil-based. That is sensible, and it is one of the few obvious external risks flagged in the statement.

There is also mention of defence opportunities across the UK, Europe and the US, supported by rising defence spending. The pipeline sounds encouraging, but no figures are disclosed, so investors should treat that as potential rather than forecast.

My take on the Velocity Composites H1 2026 update

This is a decent update, not a dazzling one. Revenue is down and the US delay is annoying, so there is no point pretending everything is perfect. But the company has protected margins, stayed positive on adjusted EBITDA for a third half in a row, improved its balance sheet, and kept full-year guidance unchanged.

The biggest positive is that Velocity looks more operationally disciplined than it did a few years ago. The Burnley consolidation, the stable gross margin, the undrawn facility and the move into net cash all point to better control. The biggest risk is still execution in the US. If H2 slips again, the market is unlikely to be forgiving.

For now, this reads like a business that has had a slower first half but still believes the full-year plan is intact. If the H2 recovery lands, this update will look fine. If it does not, investors will start asking tougher questions about timing, customer concentration and how long “phasing” can keep doing the heavy lifting.