Velocity Composites signs multi-year extension with Hapshire-based customer
Manufacturer Velocity Composites has inked a new three-year contract with an unnamed "major Tier 1" aerostructures firm based in Hampshire, including both an extension in the term of an existing five-year agreement and the award of new business covering additional programmes in production at the customer's site.
Velocity said on Friday that the contract term, applied retroactively, was valid from 1 March until 31 August and expanded upon "the long-standing relationship" between the mystery client and Velocity to supply a "fully managed structural material and kitting service" for both existing and new aerostructure work packages.
The AIM-listed group highlighted that services provided under the contract had an expected annual value of £4.1m, including the awarded £1.4m of new business on A350, A400M and Eurofighter Typhoon aircraft, and will continue to be "a major contributor" to revenues through to 2024.
Chief executive Jon Bridges said: "Execution of this contract extension and new business award with the customer is an important milestone for Velocity, with our key customer reaffirming and strengthening our relationship.
"The signature of this contract will directly protect existing jobs and enable new opportunities at our manufacturing site as we look to grow further and fully recover from the Covid-19 impacts to our business. The customer and Velocity have committed to a future partnership together in the UK and we look forward to further expanding this relationship with their other group manufacturing sites in Europe and internationally."
As of 0855 BST, Velocity Composites shares were had shot up 20% to 24.0p.