Velocity Composites strikes deal with defence contractor
Velocity Composites shares jumped after the company said it had signed an agreement with a leading defence contractor with scope for increased sales.
The supplier of composite products to the aerospace industry said the framework agreement was with an existing customer. It confirms existing work packages with the customer and allows Velocity to to place additional packages, the company said.
Velocity shares rose 15.2% to 19p at 11:42 BST. The shares have more than halved since early February as prospects for the airline industry have darkened because of the Covid-19 crisis.
The company said it had been operating under the agreement since 1 March and that it would last until the end of 2022 with options to extend for two extra years. The defence industry has not been hit by the Covid-19 emergency in the same way as civil aviation, which faces years of recovery.
Jon Bridges, Velocity's chief executive, said: "This new agreement creates the opportunity to increase sales to this important and influential customer. We have a long-standing and very positive relationship with the customer. We look forward to working with them over the next two years and continuing to demonstrate the benefits and advantages of our product solutions for both existing and new aircraft platforms."
The company's clients include multinational makers of composite parts for leading civil and military aircraft manufacturers. Aircraft featuring parts using Velocity's kits include the Eurofighter Typhoon, the Boeing 737 and the Airbus A320, A330 and A350.