Correction to announcement number 4410Q made at 07:00 on 27/1/2026 (Audited Final Results for the twelve months ended 31 October 2025): In the Consolidated Statement of Financial Position, Cash and cash equivalents as at 31 October 2024 was incorrect, and should have read: £1,663,000. The time of the Investor Meet Company presentation has also been amended.

 

27 January 2026

VELOCITY COMPOSITES PLC

("Velocity Composites" or the "Company")

 

Audited Final Results for the twelve months ended 31 October 2025

 

Adjusted EBITDA for the year more than double prior year

 

Velocity Composites plc (AIM: VEL), the leading supplier of composite material kits to aerospace, is pleased to announce the Company's audited results for the twelve months ended 31 October 2025 ("FY2025").

 

Highlights:

 

●	Total revenue in line with guidance of £20.7m (FY2024: £23.0m)
●	Gross margin up 360 bps to 29.5% (FY2024: 25.9%) due to a better sales mix and improved operational efficiencies
●	Adjusted EBITDA* profit of £1.0m (FY2024: £0.4m)
●	Cash at bank £0.4m (FY2024: £1.7m)
●	Net debt position of £0.1m at 31 October 2025 (FY2024: £0.7m net cash) and the Group was undrawn on its £3.1m invoice discounting facility; net cash at 22 January was £0.3m

 

Market Update:

 

●	A350 programme production rates are expected to increase as the OEM strives to fulfil its order backlog
●	Working to secure new business in Europe that can be serviced from UK production facilities as delays in production ramps have resulted in one UK customer off-shoring production during 2026 and another in-housing legacy programmes
●	Boeing's re-acquisition of Spirit expected to unblock supply chain issues seen during 2024 and 2025
●	Delayed final contracted programme from previously announced US agreement now expected to transfer in FY26
●	Additional programmes at US customer being evaluated
●	Anticipated near-term growth supports the Board's key targets: ·      25% plus gross margin ·      10% adjusted EBITDA* margin ·      25% return on capital

 

 

*Adjusted EBITDA is defined as Earnings before interest, tax, depreciation, amortisation, exceptional items and adjusted for share-based payments.

 

Jon Bridges, CEO. Velocity Composites plc said: "As global demand for advanced composites continues to rise, our vision is to become the supplier of choice to all high value composite manufacturers globally for value engineered raw materials. The long-term outlook for Velocity and the industry is positive given the projected significant growth in passenger traffic over the next decade and beyond.

"The timing of when aircraft production rates will increase is difficult to predict, however we are focused on ensuring that Velocity is ready to deliver when the global aerospace industry ramps back up to pre-pandemic production levels and further.

"Our partnerships with our customers are long term, built on our commitment, quality, and delivery. As some of our legacy programmes end, we continue to secure new programmes and are bidding for new opportunities that will provide long-term growth and value to shareholders."

 

Investor Presentation

Chief Executive Officer Jon Bridges, and Chief Financial Officer Rob Smith will provide a live investor presentation for the Company's results via the Investor Meet Company platform at 10:00am on Wednesday 28 January 2026.

 

The presentation is open to all existing and potential shareholders. Questions can be submitted in advance via the Investor Meet Company dashboard, or at any time during the live presentation. Investors can sign up to Investor Meet Company and add to meet Velocity Composites plc via:

https://www.investormeetcompany.com/velocity-composites-plc/register-investor

 Enquiries:

Velocity Composites	Tel: +44 (0) 1282 577577
Andy Beaden, Chairman Jon Bridges, Chief Executive Officer Rob Smith, Chief Financial Officer
Canaccord Genuity Limited (Nominated Adviser and Broker)	Tel: +44 (0)20 7523 8000
Max Hartley George Grainger
Dowgate Capital Limited (Joint Broker)	Tel: +44 (0)20 3903 7715
Russell Cook Nicholas Chambers
SEC Newgate (Financial Communications)	Tel: +44 (0)7540 106 366
Robin Tozer George Esmond Harry Handyside	Email: [email protected]

 

About Velocity Composites

Based in Burnley, UK, Velocity is the leading supplier of composite material kits to aerospace, that reduce costs and improve sustainability.  Customers include BAE Systems. Hamble Aerostructures, Safran Nacelles and GKN, who supply to the major OEMs including Airbus, Boeing, GE, Rolls Royce and Lockheed Martin.

By using Velocity's proprietary technology, manufacturers can also free up internal resources to focus on their core business.  Velocity has significant potential for expansion, both in the UK and abroad, including into new market areas, such as wind energy, urban air mobility and electric vehicles, where the demand for composites is expected to grow.

Chairman's Report

Introduction

In the last financial year, the Company improved its profitability, despite the challenges in the global aerospace supply chain, primarily caused by events at Boeing and Airbus.  After several years of averaging 40% per annum growth, the wider industry headwinds of the past year led to a year of sales consolidation while we restructured our operations generating significant operational efficiencies.

Revenue fell to £20.7m in FY2025 from £23.0m in FY2024, however our greater efficiencies, and the completion of our US production facility, led to a margin improvement and an adjusted EBITDA of £1.0m, up from £0.4m. The next step is achieving profitability before and after tax and while onboarding further new business programmes.

We expect to return to higher levels of growth again, when external factors, including delays in some key technical approvals on new programmes, especially in the US are resolved.  Velocity operates in the highly regulated aerospace and defence markets, which sometimes move at a slower pace than we would like in terms of approvals, in part because of the absolute (and correct) focus on safety and manufacturing excellence.

Our experience over the last 12 months while frustrating has been useful and will improve how we approach new business opportunities in the future.

While we did win new business and extended existing programmes in FY2025, we also experienced reductions in our customers' production in the UK. There is a trend among some customers to consolidate production in mainland Europe. We are working to secure new business in Europe that can be serviced from our UK production facilities. Europe and the US are our key future growth markets for both current and new customers.

Environmental

Velocity is committed to supporting the aerospace industry's environmental objectives, including reducing emissions and waste, and promoting efficient resource use. Carbon fibre, as a key material, offers significant potential to lower environmental impact, the unit cost and oil-based inputs make waste reduction essential. Velocity's services focus on minimising material waste, contributing to a net positive environmental outcome.  We have a full section in this report on sustainability which is a key part of our own service offerings to the supply chain we serve in.

We are equally proud of fostering a safe and secure manufacturing environment, maintaining world-class employee safety standards.

Innovation

Our proprietary Velocity Resource Planning^® (VRP) technology continues to deliver operational excellence.

This year, VRP was fully implemented at our new US facility, transforming it into a world-class advanced manufacturing site. This innovation enhances efficiency and raises service levels for our customers, reinforcing our leadership in advanced material resource planning.

We have been developing our service offering, especially around procurement and inventory management solutions for our customers. Our ability to operate over a wider regional footprint, to align with our customers' needs, will enable us to better utilise our established manufacturing investments in the UK and USA, across the whole of Europe and North America.

 

People

Our lean, technology-enabled back-office structure is a key advantage for Velocity. Centralised teams in the UK support multiple factories across R&D, Engineering, Sales, and Finance, enabling scalability and cost-efficiency.

To support growth, we invested over a number of years in hiring and training a significant number of new employees, incurring upfront costs. This investment will deliver long-term commercial benefits, as well as adding expertise in Finance, Operations, and the US market. We are already seeing improved operational excellence and increased resource to pitch to customers for additional business.

I would like to thank all the staff for their support and hard work.

Board and Governance

We have an experienced Board, with the right balance of skills in terms of composites and aerospace manufacturing, supported by a focused executive management team.  Within the Annual Report and Accounts, we explain how the Board and Executive operate together to achieve the strategic goals. The Report also provides a detailed analysis of our Corporate Governance structures, and as a member of the Quoted Company's Alliance ("QCA") we follow its guidance for a listed business of our size.

Conclusion

At this stage in Velocity's development our primary focus must be to win more new business, which can provide longer term growth and drive profitability.

On behalf of the Board, I extend my heartfelt thanks to all stakeholders, including our investors, for their continued support.

 

Andrew Beaden

Chairman

26 January 2026

Chief Executive Officer's Report

Overview

Overall, the global aerospace industry is seeing growing orders, alongside planning rate increases in the defence sector, but with production backlogs across all civil aviation platforms.

As a result, aircraft build rates in 2025 remained at a similar level to the previous year, despite the expectation that these would increase across the key platforms, including the Airbus A350. To be prudent, our financial forecasting is now based on flat production rates in FY2026. However, when the Company sees sustained changes in customer demand, we will revise these.

Ahead of the anticipated ramp up, the Company has made progress in terms of driving further efficiencies and improving operating margins across the business. This has meant increased gross margin and reduced overheads.

Sales revenue for the year was £20.7m (FY2024: £23.0m) at an improved 29.5% gross margin (FY2024: 25.9%). The gross margin resulted from an improved sales mix and operational efficiency gains made during the year. Administrative expenses reduced to £6.9m (FY2024: £7.0m) as we implemented a number of cost control measures to mitigate the lower sales revenue. This resulted in an improved adjusted EBITDA of £1.0m (FY2024: £0.4m).

Customers

In May 2025, we secured a contract renewal and extension with an existing defence customer that we have served since 2010, extending a major relationship with a global OEM. Furthermore, we agreed the expansion of an existing agreement with a key A350 customer to cover a wider scope of work, to include all products on a customer site for a period of ten years. The transfer of this additional work will begin in early 2026 and is covered by existing customer and OEM approvals.

As outlined above, our civil aerospace customers, existing and in-bid, did not see the production rate and revenue increases expected in the year. It is these rate increases beyond pre-2020 levels that drives the need for outsourcing of non-core activities at their sites. The delays mean customers are looking to fill their manufacturing areas by any means necessary in order to cover fixed overheads, which can mean work packages being moved internationally between customer facilities, where possible.

In FY2025, one customer in the UK has begun to transfer production to a sister plant in mainland Europe; this process is expected to continue through FY2026. Until we understand the longer-term plan of the customer, we have removed any forecasted sales for FY2027 onward from our internal budgets, as matter of prudency.

We have other long-term customers, involved in legacy programmes, which are coming to a natural end, and are not being replaced by new programmes. To mitigate this, these customers are looking at in-loading all outsourced activities (including the services provided by Velocity) to support their site overheads. Again, a prudent approach to our internal forecasting will be applied for FY2027 onwards.

Velocity will adapt to these industry changes and use our "forward stock location" way of working to manufacture kits and products at our existing sites and distribute via a small service location close to customers. New business will come from new programmes and customers that are in growth platforms and have a stable operational plan, with sites that are planned to become constrained as production rates grow. This will help to ensure long-term, strategic partnerships are formed.

With our US launch customer, we have continued to deliver our products and services for the transferred programmes. In early FY2025, we commissioned our large freezer facility at our Alabama site for the storage of raw materials and finished goods.

Due to a technical issue between our US customer and the OEM (unrelated to Velocity), we have been unable to complete the full transfer of work as expected, with the current level of transferred business at around 40% of the total project value. To offset the effect on Velocity of the delays, additional business with this customer has been identified for FY2026.

Market

Civil Aerospace

After several years of delays to the forecasted production ramp ups, customers are being cautious in forecasting corresponding increases in demand to suppliers like Velocity.

The production delays are particularly evident in key civil aerospace platforms, such as the A350 and the B737. The reasons for the delays are varied, with Airbus citing "supply chain issues" with the A350, and Boeing impacted by continued FAA oversight, after the widely reported issues in 2019 and 2023.

In addition, the protracted acquisition of Spirit AeroSystems by Boeing and the corresponding acquisition of the Airbus supply chain of Spirit AeroSystems by Airbus has been an unwelcome distraction for the industry. As these issues are resolved, production ramp ups are expected to begin.

Defence

Our defence customers, both existing and potential, are starting to plan for production rate increases. Alongside the established defence platforms, new defence contractors are entering the market, bringing innovative products into volume production. These products align to the growing need for lower cost, high volume, and readily adaptable defence systems to meet the new threats identified.

As these programmes scale up, along with the new eVTOL aircraft platforms that are starting volume production, we will look to work with OEMs and manufacturing customers who are establishing their supply chains from scratch and assist in creating these in a lean and scalable way from day one.

Progress has been made in achieving AUKUS accreditation, which is seen as assisting in the export control compliance between companies in the US, UK, and Australia as more defence programmes are worked on between these countries. We progressed specific export control compliance requirements for programmes not covered by the project or geographical areas of AUKUS.

Operations

Velocity exists to revolutionise aerospace composites manufacturing. Our mission is to empower customers to reduce waste and costs while meeting the growing global demand for advanced composites.

By creating a lean, scalable supply chain tailored for a 'more-for-less' era, we deliver real, measurable value to all stakeholders - customers, suppliers, employees, and shareholders alike. This is not just about efficiency; it is about shaping the future of aerospace manufacturing through smarter processes and sustainable practices.

We progressed this mission in FY2025 through the successful implementation and migration of our UK sites to our Odoo-based Velocity Resource Planning® (VRP) system, following successful deployment in the US. Velocity now has one unified and live system across all business areas and is helping to drive further efficiencies for customers by delivering real time control and automation of repeat tasks.

In 2025, we welcomed Oliver Smalley as Chief Operations Officer to build on the previous improvements made to our manufacturing efficiency and cost base, which has helped see gross margin improve from 25.9% to 29.5% between FY2024 and FY2025. This appointment completed the leaner executive management team with more focused areas of responsibility.

 

Regulatory Approvals

All our sites maintained their industry and OEM approvals, including UK sites which maintained Merit 24 status for NADCAP special processes. Our US site successfully completed its second NADCAP audit with zero findings, which as a new site is an amazing testament to the hard work and diligence of our teams. This means our Tallassee site is well on the way to joining our UK sites in Merit 24 status. In FY2026, we will look to add to these industry approvals with robust physical and cyber security accreditations to address the increasing threats and to allow us to operate to the required civil and defence customer requirements.

Strategy

As we prepare for the expected production ramp, our strategy is clear and designed to build on the progress to date, namely:

•	To develop innovative products and solutions to drive cost reductions and improvements in our customers sites
•	Drive internal efficiencies and quality performance to enable us to offer the most competitive services to customers at a sustainable margin
•	Implement enhanced ways of working which drive faster and easier adoption of our services (VAMOS®)
•	Build long term, strategic relationships with global customers with growing, diverse and stable portfolios wherever they operate
•	Utilise existing manufacturing capacity to manufacture current and future kits and products and distribute to efficient forward stock locations
•	Grow in Europe and North America to drive value for shareholders

 

Outlook

As global demand for advanced composites continues to rise, our vision is to become the supplier of choice to all high value composite manufacturers globally for value engineered raw materials. The long-term outlook for Velocity and the industry is positive given the projected significant growth in passenger traffic over the next decade and beyond.

The timing of when aircraft production rates will increase is difficult to predict, however we are focused on ensuring that Velocity is ready to deliver when the global aerospace industry ramps back up to pre-pandemic production levels and further.

Our partnerships with our customers are long term, built on our commitment, quality, and delivery. As some of our legacy programmes end, we continue to secure new programmes and are bidding for new opportunities that will provide long-term growth and value to shareholders.

 

Jon Bridges

Chief Executive Officer

26 January 2026

 

Financial Review

Statement of Income

Group revenue for FY2025 decreased 10.0% to £20.7m (FY2024: £23.0m). The principal reasons for the decline were:

•	Expected production rate increases for A350 were not achieved, this led to de-stocking and reduced production levels at two of our UK customers resulting in reduced demand from those customers
•	Lower than expected revenues from our US customer as work package transfers were delayed due to technical issues between our customer and the OEM
•	A decay in revenue from older programmes that we support and are towards the end of their production life

Gross profit improved to £6.1m (FY2024: £6.0m) as a result of an improved sales mix and production efficiencies, particularly in the US, being realised. As a consequence, an improved gross margin percentage of 29.5% (FY2024: 25.9%) was achieved.

Administrative expenses in FY2025 were flat year on year at £7.0m (FY2024: £7.0m). Cost control measures introduced through the year offset inflationary increases and an increased, non-cash, share-based payment charge, as management took proactive steps to mitigate the lower sales revenue. The improved gross profit margins and lower underlying administrative expenses more than offset the reduced sales revenue with adjusted EBITDA increasing to £1.0m (FY2024: £0.4m).

	31 October	31 October
	2025	2024
Reconciliation from operating loss	£'000	£'000
Operating loss	(718)	(931)
Add back:
Share-based payments	386	143
Depreciation and amortisation	690	622
Depreciation on right of use assets under IFRS 16	632	540
Adjusted EBITDA	990	(1,606)

 

 

The delays in transferring programmes, as noted in the CEO's report, coupled with lower demand from customers on the A350 programme and legacy programmes coming to their natural conclusion suppressed revenues during the year. However, the significant effort made on improving operational efficiency and reducing administrative expenses enabled us to deliver a considerably better adjusted EBITDA and a reduced operating loss of £(0.7)m (FY2024: £(0.9)m).

There is considerable further potential growth through OEM production rate increases on existing programmes as well as opportunities on other programmes with new and existing customers. Velocity has built an excellent capability to deliver this growth without a linear increase to its overhead base or installed manufacturing capacity. Near-term growth is expected to be delivered from existing sites giving the opportunity for further operational efficiencies without increasing administrative expenses.

Losses after tax for the year for the Group amounted to £1.1m (FY2024: £0.8m). Changes made to the UK research and development regime have resulted in a lower tax benefit from these activities and this income being fully recognised as other operating income.

 

Cashflow and Capital Investment

The cash and cash equivalents balance as at 31 October 2025 was £0.4m (FY2025: £1.7m).

Operating cash inflow before working capital movements for FY2025 was £0.8m (FY2024: £0.3m inflow), this being attributable to increased gross profit and lower administrative expenses. The movements in working capital netted to £nil in FY2025 (FY2024: £0.4m outflow), and after other adjustments for taxation received, the final cash inflow from operations was £1.0m (FY2024: £0.4m inflow).

Working capital movements can be further analysed as follows. There was a negative working capital movement through a £1.3m decrease in trade and other payables from suppliers (FY2024: decrease of £0.7m). Inventory decreased by £0.4m (FY2024: decrease of £0.2m), largely due to the reduced sales revenue and improvements in operational efficiencies. Trade receivables decreased by £0.9m (FY2024: £0.2m increase) driven by the reduced sales. Overall trade receivable days were 44 days, compared to 53 days at the end of FY2024.

Cash outflow from investment activities was £0.7m (FY2024: £0.6m). Investment activities mainly resulted from capitalisation of research and development expenditure of £0.4m (FY2024: £0.4) and capital expenditure of £0.3m (FY2024: £0.2m).

Financing activities cash outflow was £1.5m in the year (FY2024: £1.4m). The outflow included repayment of loans taken out during the Covid-19 pandemic of £0.5m (FY2024: £0.5m) and repayment of finance lease capital £0.7m (FY2024: £0.5m).

The Company was in a Net Debt position at the end of the year, of £0.1m (FY2024: £0.7m). This includes Cash at Bank, offset by the outstanding CBILs balance. The Company's invoice discounting facility was undrawn at the 31 October 2025 (FY2024: undrawn).

	31 October	31 October
	2025	2024
	£'000	£'000
Cash	392	1,663
CBILS loan	(497)	(971)
Net (debt) / cash	(105)	692

 

 

Going Concern

The financial statements have been prepared on a going concern basis as the directors believe that the Group has access to sufficient resources to continue in business for the foreseeable future. This is discussed more fully in the Directors' Report of the FY2025 Annual Report and Accounts.

 

Rob Smith

Chief Financial Officer

26 January 2026

 

Consolidated Statement of Income		Year ended	Year ended
		31 October	31 October
		2025	2024
	Note	£'000	£'000
Revenue	4	20,701	23,006
Cost of sales		(14,595)	(17,045)
Gross profit		6,106	5,961
Administrative expenses		(6,972)	(6,978)
Other Operating Income		148	86
Operating loss	5	(718)	(931)
Operating loss analysed as:
Adjusted EBITDA profit/(loss)	31	990	374
Depreciation of property, plant and equipment		(380)	(382)
Amortisation		(310)	(240)
Depreciation of right-of-use assets under IFRS 16		(632)	(540)
Share-based payments		(386)	(143)
Finance income and expense	8	(340)	(413)
Loss before tax from continuing operations		(1,058)	(1,344)
Corporation tax (payable) / recoverable	9	(26)	499
Loss for the year and total comprehensive loss		(1,084)	(845)
Loss per share - basic from continuing operations	10	(2.00p)	(1.58p)
Loss per share - diluted from continuing operations	10	(2.00p)	(1.58p)

 

Consolidated Statement of Other Comprehensive Income
	Year ended	Year ended
	31 October	31 October
	2025	2024
	£'000	£'000
Loss for the year	(1,084)	(845)
Other comprehensive income Items that are or may be subsequently reclassified to profit and loss:
Currency translation movement arising on consolidation	(51)	-
Total comprehensive loss for the year	(1,135)	(845)

 

 

Consolidated Statement of Financial Position		31 October	31 October
		2025	2024
	Note	£'000	£'000
Non-current assets
Intangible assets	11	1,072	987
Property, plant and equipment	12	1,764	1,854
Right-of-use assets	19	1,952	1,826
Total non-current assets		4,788	4,667
Current assets
Inventories	14	2,099	2,500
Trade and other receivables	15	3,025	3,977
Cash and cash equivalents	16	392	1,663
Total current assets		5,516	8,140
Total assets		10,304	12,807
Current liabilities
Loans	18	402	503
Trade and other payables	17	2,515	3,933
Obligations under lease liabilities	19	703	561
Provisions	25	79	-
Total current liabilities		3,699	4,997
Non-current liabilities
Loans	18	95	468
Obligations under lease liabilities	19	1,192	1,258
Provisions	25	177	218
Total non-current liabilities		1,464	1,944
Total liabilities		5,163	6,941
Net assets		5,141	5,866
Equity attributable to equity holders of the company
Share capital	22	137	134
Share premium account	23	4,891	4,870
Share-based payments reserve	24	573	517
Translation reserve		51	-
Retained earnings		(409)	345
Total equity		5,141	5,866

 

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and not presented its own statement of profit and loss in these financial statements. The loss for the year was £1,111,000. The financial statements were approved and authorised for issue by the Board of Directors on 26 January 2026 and were signed on its behalf by:

Rob Smith Director
Co No: 06389233

 

 

Consolidated statement of changes in equity
	Share	Share premium	Retained	Translation	Share-based payments	Total
	capital	account	earnings	Reserve	reserve	equity
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 November 2023	133	4,870	1,087	-	478	6,568
Loss for the year	-	-	(845)	-	-	(845)
	133	4,870	242	-	478	5,723
Transactions with owner:
Share-based payments (note 24)	-	-	-	-	143	143
Transfer of share option reserve on vesting of options and issue of equity	1	-	103	-	(104)	-
Balance at 31 October 2024	134	4,870	345	-	517	5,866
Balance at 1 November 2024	134	4,870	345	-	517	5,866
Loss for the year	-	-	(1,084)	(51)	-	(1,025)
	134	4,870	(739)	(51)	517	4,841
Transactions with owners:
Share-based payments (note 24)	-	-	-	-	386	386
Transfer of share option reserve on vesting of options and issue of equity	3	21	330	-	(330)	24
Balance at 31 October 2025	137	4,891	(409)	(51)	573	5,141

 

Consolidated Statement of Cash Flows

	Year ended	Year ended
	31 October	31 October
	2025	2024
	£'000	£'000
Operating activities
Loss for the year	(1,084)	(845)
Taxation	(137)	(528)
Finance costs	340	413
Amortisation of intangible assets	310	240
Depreciation of property, plant and equipment	380	382
Depreciation of right-of-use assets	632	540
Share-based payments	386	143
Operating cash flows before movements in working capital	827	345
Increase in trade and other receivables	933	(180))
Decrease/(Increase) in inventories	401	243
(Decrease)/Increase in trade and other payables	(1,339)	(654)
Increase/(Decrease) in provisions	38	218
Cash (outflow)/inflow from operations	860	(28)
Tax received	130	398
Net cash inflow from operating activities	990	370
Investing activities
Purchase of property, plant and equipment net of intercompany transfers	(334)	(212)
Purchase of development expenditure	(409)	(372)
Proceeds from the sale of property, plant and equipment	14	-
Net cash used in investing activities	(729)	(584)
Financing activities
Finance costs paid	(340)	(413)
Loan repayment	(474)	(502)
Repayment of lease liabilities capital	(684)	(497)
Net cash used in financing activities	(1,498)	(1,412)
Net (Decrease) in cash and cash equivalents	(1,237)	(1,626)
Cash and cash equivalents at 01 November	1,663	3,178
Effect of foreign exchange rate changes	(34)	111
Cash and cash equivalents at 31 October	392	1,663

 

 

Notes to Financial Statements

1.         General information

Velocity Composites plc (the 'Company') is a public limited company incorporated and domiciled in England and Wales. The registered office of the Company is AMS Technology Park, Billington Road, Burnley, Lancashire, BB11 5UB, United Kingdom. The registered company number is 06389233.

In order to prepare for future expansion in the Asia region, the Company established a wholly owned subsidiary company, Velocity Composites Sendirian Berhad, which is domiciled in Malaysia. The subsidiary company commenced trading on 18 April 2018. The Company also established a wholly owned subsidiary company, Velocity Composites Aerospace Inc. to prepare for future expansion in the United States of America. These subsidiaries, together with Velocity Composites plc, now form the Velocity Composites Group ('the Group').

The Group's principal activity is that of the sale of kits of composite material and related products to the aerospace industry.

2.         Accounting policies

 Basis of preparation

The consolidated financial statements of Velocity Composites plc have been prepared in accordance with UK-adopted international accounting standards and International Financial Reporting Interpretations Committee (IFRIC) interpretations.

These financial statements have been prepared on a going concern basis and using the historical cost convention, as modified by the revaluation of certain items, as stated in the accounting policies. These policies have been consistently applied to all years presented, unless otherwise stated. The financial statements are presented in sterling and have been rounded to the nearest thousand (£'000). References to "FY2025" refer to the year ended 31 October 2025, whilst references to "FY2024" are in respect of the year ended 31 October 2024.

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and not presented its own statement of profit and loss in these financial statements.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and its' subsidiary undertakings and are made up to 31 October 2025. Subsidiaries are consolidated from the date of acquisition, using the purchase method.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. The Group's subsidiaries have prepared their statutory financial statements in accordance with IFRS standards.

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In assessing control, the Group takes into consideration potential voting rights. The acquisition date is the date on which control is transferred to the acquirer. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

The accounting policies set out below have, unless otherwise stated, been applied consistently to all years presented in the consolidated financial statements.

There are no new accounting standards or interpretations that are not yet fully effective that could be expected to have a material impact on the Group.

Going concern

The financial statements have been prepared on a going concern basis as the directors believe that the Group has access to sufficient resources to continue in business for the foreseeable future.

The key business risks and conditions that may impact the Group's ability to continue as a going concern are the utilisation of existing resources and borrowing facilities to finance growth, investment and expenditure; rates of growth and cash generated by Group revenues; the timing of breakeven and positive cash-flow generation and ability to secure additional debt or equity financing in the future if this became necessary. The primary area of judgement that the Board considered, in the going concern assessment, related to revenue expectations.

Whilst recognising that all forecasts carry inherent uncertainty, the Board has endeavoured to establish cash forecasts and projections that are sufficiently robust to allow them to be relied on when making short and medium-term forecasting decisions. The Board's forecasting process only includes sales revenue from ongoing, contracted, or new business where there is a high degree of certainty that it will be contracted in the forecast period. The Board concluded that its base cash model provides a reliable basis upon which a going concern review can be undertaken.

The Board was mindful of the guidance surrounding a severe but plausible assessment and, accordingly, considered a number of scenarios in revenue reduction against the original plans. A reverse stress test was constructed to identify at which point the Group might run out of available cash and facilities. The test was designed specifically to understand how far revenue would need to fall short of the base case forecast and does not represent the directors' view on current or projected trading. The test was modelled over a 24-month period from the commencement of FY2026 to the end of FY2027 and was based on budgeted trading that took into account contracted orderbook, existing revenue streams from current customers and expected revenue based on management's judgement of the likelihood of converting current sales opportunities. The sales revenue in the budgeted model was reduced evenly across the Group to the point where projected month-end cash was equal to zero at any point during the test period, In the model, zero month-end cash was reached in October 2027 when projected sales revenue was reduced to 75.7% of budget. For the reverse stress test, the Board specifically excluded any upsides to this scenario. This is despite strong incremental upside potential at both existing and new customers. This most severe scenario also excludes any mitigating reduction in the cost base that the Board would undertake in this event. In all scenarios modelled the Group has sufficient resources to operate and meet its liabilities throughout the going concern review period, up to the point where reverse stress test is reached, without the inclusion of the impact of mitigating actions.

At 31 October 2025, the Group had a cash balance of £392,000, was undrawn on its invoice discounting facility and had outstanding CBILs of £497,000. As at 22 January 2026, the Group had a cash balance of £821,000, had drawn down £152,000 from its invoice discounting facility and had outstanding CBILs of £417,000.

As a result of this review, which incorporated sensitivities and risk analysis, the Directors believe that the Group has sufficient resources and working capital to meet their present and foreseeable obligations for a period of at least 12-months from the approval of these financial statements.

Revenue recognition

Revenue is recognised as performance obligations are satisfied as control of the goods and services are transferred to the customer. Contracts are satisfied over a period of time, with the dispatch of goods at a point in time. Revenue is therefore recognised when control is transferred to the customer, which is usually when legal title passes to the customer and the business has the right to payment, for example, on delivery.

The Group generates revenue from the sale of structural and consumable materials for use within the aerospace industry. This is the sole revenue stream of the Group.

At contract inception (which is upon receipt of a purchase order from a customer), an assessment is completed to identify the performance obligations in each contract. Performance obligations in a contract are the goods that are distinct.

At contract inception, the transaction price is determined, being the amount that the Group expects to receive for transferring the promised goods - this is a fixed price with no variable consideration. The transaction price is allocated to the performance obligations in the contract based on their relative standalone selling prices - this reflects the agreed price as per purchase order for each product. The Group has determined that the contractually stated price represents the standalone selling price for each performance obligation.

Revenue from sale of goods and services is recognised when a performance obligation has been satisfied by transferring the promised product to the customer at a point in time, usually when legal title passes to the customer and the business has the right to payment, for example, on delivery. Standard payment terms are in place for each customer.

Inventory

Inventory is stated at the lower of costs incurred in bringing each product to its present location and condition compared to net realisable value as follows:

•	Raw materials, consumables and goods for resale - purchase cost on a first-in/first-out basis.
•	Work in progress and finished goods - costs of direct materials and labour plus attributable overheads based on a normal level of activity.

Net realisable value is based on an estimated selling price less any further costs expected to be incurred for completion and disposal.

Expenditure

Expenditure is recognised in respect of goods and services received when supplied in accordance with contractual terms. Goods or services supplied in a foreign currency are recognised at the exchange rate ruling at the time of accounting for this expenditure.

Provisions

A provision is made when an obligation exists for a future liability relating to a past event and where the amount of the obligation can be reliably estimated.

Retirement benefits: defined contribution schemes

Contributions to defined contribution pension schemes are charged to the statement of comprehensive income in the year to which they relate.

 

Short-term employee benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the year the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Research and development expenditure

Research expenditure - expenditure on research activities is recognised as an expense in the year in which it is incurred.

Development expenditure - An internally generated intangible asset arising from the Group's own development activity is recognised only if all of the following conditions are met:

•	an asset is created that can be identified and is technically and commercially feasible;
•	it is probable that the asset created will generate future economic benefits and the Group has available sufficient resources to complete the development and to subsequently sell and/or use the asset created; and
•	the development cost of the asset can be measured reliably.

The amount recognised for development expenditure is the sum of all incurred expenditure from the date when the intangible asset first meets the recognition criteria listed above. This occurs when future sales are expected to flow from the work performed. Incurred expenditure largely relates to internal staff costs incurred by the Group.

Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortisation and impairment.

Amortisation

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over their estimated useful lives and is generally recognised in the statement of total comprehensive income. The estimated useful lives are based on the average life of a project as follows:

Development costs

5 years

Property, plant and equipment

Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly attributable costs.

Depreciation is provided on all items of property, plant and equipment so as to write off their carrying value over the expected useful economic lives. It is provided at the following methods and rates:

Land and buildings (right-of-use)	Over the term of the lease
Plant and machinery	15% straight line
Motor vehicles	25% straight line
Fixtures and fittings	15% straight line
Leasehold improvements	Over the term of the lease unless there is reasonable certainty the lease will be renewed, in which case,10% straight line

Foreign currency translation

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('its functional currency'). The consolidated financial statements are presented in sterling, which is Velocity Composites plc's functional and presentation currency.

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates the transactions occur. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are recognised in the consolidated comprehensive statement of income.

The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated into the presentation currency, on consolidation, as follows:

·	assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of the statement of financial position;
·	income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average exchange rates; and
·	all resulting exchange differences are recognised immediately in the Consolidated comprehensive statement of income.

 

 

Impairment of non-financial assets

The carrying values of non-financial assets are reviewed for impairment when there is an indication that assets might be impaired, and at the end of each reporting year. When the carrying value of an asset exceeds its recoverable amount, the asset is written down accordingly.

Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset's cash generating unit (i.e. the smallest grouping of assets in which the asset belongs for which there are separately identifiable cash flows).

Impairment charges are included in the income statement, except to the extent where they reverse previous gains recognised in the statement of comprehensive income.

Financial instruments

All funding requirements and financial risks are managed based on policies and procedures adopted by the Board of Directors encapsulating the normal day to day trading of the Group. The Group does not use derivative financial instruments such as forward currency contracts, or similar instruments. The Group does not issue or use financial instruments of a speculative nature.

Bank borrowings

Interest-bearing loans are recorded initially at their fair value, net of direct transaction costs. Such instruments are subsequently carried at their amortised cost and finance charges are recognised in the statement of comprehensive income over the term of the instrument using an effective rate of interest. Finance charges are accounted for on an accrual's basis to the statement of comprehensive income.

The Group has current borrowings of CBIL loans and can utilise its invoice discounting facility in support of its working capital requirements.

Financial assets

The Group classifies its financial assets into the categories discussed below and based upon the purpose for which the asset was acquired. The Group has not classified any of its financial assets as held to maturity.

Trade and other receivables

These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the sale of goods to customers (e.g. trade receivables) but also incorporate other types of contractual monetary asset. They are initially recognised at fair value plus transactions costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost using the effective interest method, less provision for impairment.

The Group's loans and receivables comprise trade and other receivables included within the statement of financial position.

Cash and cash equivalents

Cash and cash equivalents include cash held at bank, bank overdrafts and marketable securities of very short-term maturity (typically three months or less) which are not expected to deteriorate significantly in value until maturity. Bank overdrafts are shown within loans and borrowings in current liabilities in the statement of financial position.

Impairment of financial assets

Impairment provisions are recognised through the expected credit losses model (ECL). IFRS 9's impairment requirements use forward-looking information to recognise expected credit losses - the 'expected credit loss (ECL) model'.

The Group considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

Trade and other payables

The Group classifies its financial liabilities as comprising trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.

Share capital

Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the definition of a financial liability. The Group's ordinary shares are classified as equity instruments.

Share premium

Share premium represents the excess of the issue price over the par value on shares issued less costs relating to the capital transaction arising on the issue.

 

Share-based payment

The Group operates an equity-settled share-based compensation plan in which the Group receives services from Directors and certain employees as consideration for share options. The fair value of the services is recognised as an expense over the vesting period, determined by reference to the fair value of the options granted.

Leased assets

Leases

At lease commencement date, the Group recognises a right-of-use asset and a lease liability in its consolidated statement of financial position. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, and any lease payments made in advance of the lease commencement date.

The Group depreciates the right-of-use asset on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist.

At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the Group's incremental borrowing rate because as the lease contracts are negotiated with third parties it is not possible to determine the interest rate that is implicit in the lease.

The incremental borrowing rate is the estimated rate that the Group would have to pay to borrow the same amount over a similar term, and with similar security to obtain an asset of equivalent value. This rate is adjusted should the lessee entity have a different risk profile to that of the Group.

Subsequent to initial measurement, the liability will be reduced by lease payments that are allocated between repayments of principal and finance costs. The finance cost is the amount that produces a constant periodic rate of interest on the remaining balance of the lease liability.

The lease liability is reassessed when there is a change in the lease payments. Changes in lease payments arising from a change in the lease term or a change in the assessment of an option to purchase a leased asset. The revised lease payments are discounted using the Group's incremental borrowing rate at the date of reassessment when the rate implicit in the lease cannot be readily determined. The amount of the remeasurement of the lease liability is reflected as an adjustment to the carrying amount of the right-of-use asset. The exception being when the carrying amount of the right-of-use asset has been reduced to zero then any excess is recognised in profit or loss.

Payments under leases can also change when there is either a change in the amounts expected to be paid under residual value guarantees or when future payments change through an index or a rate used to determine those payments, including changes in market rental rates following a market rent review. The lease liability is remeasured only when the adjustment to lease payments takes effect and the revised contractual payments for the remainder of the lease term are discounted using an unchanged discount rate. Except for where the change in lease payments results from a change in floating interest rates, in which case the discount rate is amended to reflect the change in interest rates.

The remeasurement of the lease liability is dealt with by a reduction in the carrying amount of the right-of-use asset to reflect the full or partial termination of the lease for lease modifications that reduce the scope of the lease. Any gain or loss relating to the partial or full termination of the lease is recognised in profit or loss. The right-of-use asset is adjusted for all other lease modifications.

The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. These leases relate to property security. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term.

See the accounting policy on Property plant and equipment for the depreciation methods and useful lives for assets held under lease.

Current taxation

The tax currently payable is based on the taxable profit of the year. Taxable profit differs from profit as reported in the Consolidated statement of comprehensive income because it excludes items of income and expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using rates that have been enacted or substantively enacted by the statement of financial position date.

Merged scheme research and development expenditure credit (RDEC)

RDECs are recognised at the point when claims have been quantified relating to expenditure within current or previous years and recovery of the asset is virtually certain, these tax credits relating to R&D are recognised as other operating income.

Deferred taxation

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the statement of financial position differs from its tax base, except for differences arising on the initial recognition of goodwill.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised. The amount of the asset or liability is determined using tax rates that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the deferred tax liabilities or assets are settled or recovered. Deferred tax balances are not discounted.

Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either the same taxable Company; or different Company entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets and liabilities are expected to be settled or recovered.

Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the executive directors. The Chief Operating Decision Makers have been identified as the Chief Executive Officer and the Chief Financial Officer. The Group supplies a single type of product into a single industry and so has a single operating segment. Additional information is given regarding the revenue receivable based on geographical location of the customer.

No differences exist between the basis of preparation of the performance measures used by management and the figures in the Group financial information.

Critical accounting estimates and judgements

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including the expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Provisions for inventory

Provisions are made for obsolete, out of life and slow-moving stock items. In estimating the provisions, the group makes use of key management experience, precedents and specific contract and customer issues to assess the likelihood and quantity. Stock is accounted for on a first in, first out basis.

The provision percentage is applied to various aging categories dependent on stock type, this is a key estimate made by management based on judgement and if change is applied to the percentage for the aged stock, then the outcome of the value of the provision would differ.

Sensitivity analysis

A 5% increase in the levels of the current stock provision would lead to and finance impact of an increase in stock provision of £16,000.

Provisions for building dilapidations

As part of the Group's property leasing arrangements there is an obligation to return properties to their original condition at the end of the lease. The cost is charged to profit and loss as the obligation arises. The provision is expected to be utilised between 2026 and 2029 as the leases terminate.

The provision has been calculated using one years' worth of rental over estimated lease termination dates prorated to the term the lease has been occupied.

Sensitivity analysis

A 5% increase in the levels of the current dilapidations provision would lead to and finance impact of an increase in stock provision of £13,000.

3.         Financial instruments and risk management

The Board has overall responsibility for the determination of the Group's risk management objectives and policies. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. The Group reports in Sterling. All funding requirements and financial risks are managed based on policies and procedures adopted by the Board of Directors. The Group does not use derivative financial instruments such as forward currency contracts, or similar instruments. The Group does not currently issue or use financial instruments of a speculative nature but as described in the strategic report, management may consider the potential utilisation of such instruments in the future. The Group utilises an invoice discounting facility with its bankers to assist in its cash flow management. In accordance with the terms of the current facility (which is available on demand) the risk and management of trade debtors is retained by the Group.

 

Financial instruments
	31 October	31 October
	2025	2024
	£'000	£'000
Current assets
Trade and other receivables	2,480	3,447
Trade and other receivables - prepayments	434	400
	2,914	3,847
Cash and cash equivalents - loans and receivables	392	1,663
Total loans and receivables	3,306	5,510
Current liabilities
Trade and other payables	2,162	3,567
Trade and other payables - accruals	432	366
	2,594	3,933
Loans	402	503
Obligations under lease liabilities	703	561
Total current liabilities	3,699	4,997

For non-current liabilities please see notes 17, 18 & 25.

Risk management

The Group's activities expose it to a variety of financial risks: market risk (primarily foreign exchange risk and interest rate risk), credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. Risk management is carried out by the Board and their policies are outlined below.

a)         Market risk

Foreign exchange risk

The Group is exposed to transaction foreign exchange risk in its operations both within the UK and overseas. Transactions are denominated in Sterling, US Dollars and Euros. The Group has commercial agreements in place which allow it to transact with its customers in the currency of the material purchase, thereby allowing a large element of the transactional currency risk to pass through the Group.

The Group is also exposed to translation foreign exchange risk on consolidation of US operations, which are translated into Sterling from US dollars.  This can impact the consolidated income statement and also create a movement in reserves from movements in the US balance sheet items.

The carrying value of the Group's foreign currency denominated assets and liabilities comprise the trade receivables in note 15, cash in note 16 and trade payables in note 17.

The Group's financial assets are held in both Sterling and US dollars, the assets are converted to the presentation currency Sterling assets held in US dollars are in relation to the US subsidiary, movements in the exchange rate of the US Dollar or Euro against Sterling do have an impact on both the result for the year and equity. The Group's assets and liabilities that are held in US Dollar or Euro are held in those currencies for normal trading activity in order to recover funds from customers or to pay funds to suppliers.

 

The Group's exposure to foreign currency risk is as follows. This is based on the carrying amount of monetary financial instruments.

As at 31 October 2025	US Dollar	Euro	Total
	£'000	£'000	£'000
Trade debtors	2,120	117	2,237
Cash and cash equivalents	276	101	377
Trade payables	(1,350)	(44)	(1,394)
Balance sheet exposure	1,046	174	1,220
As at 31 October 2024	US Dollar	Euro	Total
	£'000	£'000	£'000
Trade debtors	2,763	235	2,998
Cash and cash equivalents	1,097	256	1,353
Trade payables	(2,759)	(20)	(2,779)
Balance sheet exposure	1,101	471	1,572

 

Sensitivity analysis

A 5% strengthening of the following currencies against the pound sterling at the balance sheet date would have reduced the loss by the amounts shown below. This calculation assumes that the change occurred at the balance sheet date and had to be applied to risk exposures existing at that date.

		31 October	31 October
		2025	2024
		£'000	£'000
US dollar		(52)	(57)
Euro		(9)	(24)

This analysis assumes that all other variables, in particular other exchange rates and interest rates remain constant. A 5% weakening of the above currencies against pound sterling in any year would have had the equal but opposite effect to the amounts shown above. Included in the US dollar value is £20,000 relating to the US Subsidiary (2024: £39,000).

Interest rate risk

The Group carries borrowings from leases and CBILs. Lease borrowings are at a fixed rate of interest whilst the interest on the CBILs is a combination of fixed rate and Bank of England base rate plus 3.96%. The Directors do not consider there to be a significant interest rate risk on the element of loans linked to movements in the Bank of England base rate. The Group also has access to an invoicing discounting facility that carries a fixed monthly charge plus interest at a fixed rate of 4.75%.

b)         Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. In order to minimise this risk, the Group endeavours only to deal with companies which are demonstrably creditworthy and this, together with the aggregate financial exposure, is continuously monitored. The maximum exposure to credit risk is the value of the outstanding amount.

Supply of products by the Group results in trade receivables which the management consider to be of low risk, other receivables are likewise considered to be low risk. However, four of the customers comprise in excess of 10% of the revenue earned by the Group (see note 4). Credit risk on cash and cash equivalents is considered to be small as the counterparties are all substantial banks with high credit ratings. The maximum exposure is the amount of the deposit.

c)         Liquidity risk

The Group currently holds cash balances in Sterling, US Dollars and Euros to provide funding for normal trading activity. Trade and other payables are monitored as part of normal management routine. The Group also has access to banking facilities including invoice finance which it utilises when needed in order to manage its liquidity risk.

As at 31 October 2025	Within 1 year	One to two years	Two to five years	Over five years
	£'000	£'000	£'000	£'000
Loan	402	95	-	-
Obligations under lease liabilities	703	687	505
Provisions	79	134	43	-
Trade payables	1,704	-	-	-
Accruals	353	-	-	-
Other payables	29	-	-	-
As at 31 October 2024	Within 1 year	One to two years	Two to five years	Over five years
	£'000	£'000	£'000	£'000
Loan	503	468	-	-
Obligations under lease liabilities	561	575	683	-
Provisions	-	-	218	-
Trade payables	3,251	-	-	-
Accruals	584	-	-	-

d)         Capital risk management

For the purpose of the Group's capital management, capital includes issued capital, and all other equity reserves attributable to the equity holders of the Group. The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other members. The Group will also seek to minimise the cost of capital and attempt to optimise the capital structure.

4.         Segmental analysis

The Group supplies a single type of product into a single industry and so has a single reportable segment. Additional information is given regarding the revenue receivable based on geographical location of the customer.  An analysis of revenue by geographical market is given below:

	Year ended	Year ended
	31 October	31 October
	2025	2024
	£'000	£'000
Revenue
United Kingdom	14,037	15,058
Europe	20	6
US Subsidiary	6,612	7,915
Rest of the World	32	27
	20,701	23,006

During the year four customers accounted for 90.0% (2024: 92.8%) of the Group's total revenue for the year ended 31 October 2025. This was split as follows; Customer A - 26.4% (2024: 25.5%), Customer B - 27.2% (2024: 26.8%), Customer C - 4.9% (2024: 6.1%) and the fourth customer, a customer of Velocity Composite Aerospace Inc 31.9% (2024: 34.4%).

The majority of revenue arises from the sale of goods. Where engineering services form a part of revenue it is only in support of the development or sale of the goods.

During the current and previous year, the Group operated in Asia. No revenue was generated in Asia during the year ended 31 October 2025 and year ended 31 October 2024 as the site operates as an Engineering Support Office for the Group. The US subsidiary started to trade in April 2023, revenue of £16,494k (2024: £9,882k) has been generated since the US subsidiary was incorporated.

5.         Operating loss

The operating loss is stated after charging:

	Year ended	Year ended
	31 October	31 October
	2025	2024
	£'000	£'000
Staff costs (see note 6)	4,840	4,664
Cost of inventories	12,598	14,966
Foreign exchange loss	23	165
Amortisation of development costs	310	240
Depreciation:
Owned assets	380	382
Property, plant and equipment under right-of-use assets	632	540
Profit on disposal of assets	4	-
Auditor's remuneration:
Audit of the accounts of the Group	88	85
Other audit related services (relating to interim review)	-	16

6.         Staff Costs

	Year ended	Year ended
	31 October	31 October
	2025	2024
	£'000	£'000
Wages, salaries and bonuses	3,919	4,019
Social security costs	454	406
Defined contribution pension costs	191	96
Share-based payments	386	143
	4,950	4,664

The average monthly number of employees including directors, during the year was as follows:

	Year ended	Year ended
	31 October	31 October
	2025	2024
	Head count	Head count
Manufacturing	53	53
Administration	48	49
	101	102

 

 

7.         Directors' costs

	Year ended	Year ended
	31 October	31 October
	2025	2024
	£'000	£'000
Directors' remuneration included in staff costs:
Wages, salaries and bonuses	461	387
Defined contribution pension costs	35	27
	496	414
Remuneration of the highest paid director(s):
Wages, salaries and bonuses or fees	179	196
Defined contribution pension costs	18	19
	197	215

8.         Finance income and expenses

	Year ended	Year ended
	31 October	31 October
	2025	2024
	£'000	£'000
Finance expense
Finance charge from lease liabilities	103	108
Other interest and invoice discounting charges	237	305
	340	413

9.         Income tax

Company	Year ended	Year ended
	31 October	31 October
	2025	2024
	£'000	£'000
Current tax (expense) / income
UK corporation tax adjustment in respect of R&D	(26)	101
UK corporation tax adjustment in respect of prior years - R&D	-	398
Total tax income	(26)	499

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to the loss for the year are as follows:

Tax rate	25.00%	25.00%
Loss for the year before tax	(1,058)	(1,344)
Expected tax credit based on corporation tax rate	(265)	(336)
Expenses not deductible for tax purposes	35	(84)
Adjustment in respect of prior year - R&D	-	(398)
Adjustment in respect of current year - R&D	(137)	(101)
Different tax rates in other countries	-	20
Tax losses not recognised	393	400
Total tax income	26	(499)

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realised, based on tax law and the corporation tax rates that have been enacted, or substantively enacted, at the Statement of Financial Position date. As such, the deferred tax rate applicable at 31 October 2026 is 25% and deferred tax had been re-measured at this date.

10.        Loss per share

	Year ended	Year ended
	31 October	31 October
	2025	2024
	£	£
Loss for the year	(1,084,000)	(845,000)
	Shares	Shares
Weighted average number of shares in issue	54,157,848	53,454,166
Weighted average number of share options	3,691,785	1,829,734
Weighted average number of shares (diluted)	57,849,633	55,283,900
Loss per share (basic)	(2.00p)	(1.58p)
Loss per share (diluted)	(2.00p)	(1.58p)

Share options have not been included in the diluted calculation as they would be anti-dilutive with a loss being recognised.

11.        Intangible assets

Group	Development
	costs	Total
	£'000	£'000
Cost
At 31 October 2023	1,408	1,408
Additions	372	372
Exchange adjustments	(41)	(41)
At 31 October 2024	1,739	1,739
Additions	409	409
Disposals	(430)	(430)
Exchange adjustments	(19)	(19)
At 31 October 2025	1,699	1,699
Amortisation
At 31 October 2023	518	518
Charge for the year	240	240
Exchange adjustments	(6)	(6)
At 31 October 2024	752	752
Charge for the year	310	310
Disposals	(430)	(430)
Exchange adjustments	(5)	(5)
At 31 October 2025	627	627
Net book value
At 31 October 2023	890	890
At 31 October 2024	987	987
At 31 October 2025	1,072	1,072

 

Impairment

The Group reviews the Development costs at each reporting year for indicators of impairment. An indication of impairment can be generated from the loss of a customer, or contracted sales. No impairment was judged to be required for either year.

12.        Property, plant and equipment

Group	Leasehold improvements	Plant & machinery	Motor vehicles	Fixtures & fittings	Total
	£'000	£'000	£'000	£'000	£'000
Cost
At 31 October 2023	995	2,383	23	853	4,254
Additions	48	159	-	5	212
Exchange adjustments	(33)	(26)	-	(22)	(81)
At 31 October 2024	1,010	2,516	23	836	4,385
Additions	173	135	-	26	334
Disposals	(27)	(310)	(7)	(285)	(629)
Exchange adjustments	(13)	(13)	-	(8)	(34)
At 31 October 2025	1,143	2,328	16	569	4,056
Depreciation
At 31 October 2023	222	1,532	23	382	2,159
Charge for the year	105	187	-	90	382
Exchange adjustments	(1)	(7)	-	(2)	(10)
At 31 October 2024	326	1,712	23	470	2,531
Charge for the year	116	190	-	74	380
Disposal	(17)	(308)	(7)	(280)	(612)
Exchange adjustments	(2)	(2)	-	(2)	(6)
At 31 October 2025	423	1,592	16	262	2,293
Net book value
At 31 October 2023	773	851	-	471	2,095
At 31 October 2024	684	804	-	366	1,854
At 31 October 2025	720	736	-	307	1,763

13.        Investment in subsidiaries

	31 October	31 October
	2025	2024
	£'000	£'000
Subsidiary undertakings	-	-
	-	-

 

 

A list of all the investment in subsidiaries is as follows:

Name of company	Registered office	Country of registration	Type of shares	Proportion of shareholding and voting rights held	Nature of business
Directly owned
Velocity Composites SDN. BHD	Pentagon Suite, ES-04, Level 3, Wisma Suria, Jalan Teknokrat 6, Cyber 5, 63000, Cyberjaya, Selangor	Malaysia	Ordinary	100%	Provider of engineering composite services for the aerospace sector non trading
Velocity Composites Aerospace, Inc.	Corporation Trust Center, 1209 N. Orange St, Wilmington, Delaware 19801	United States of America	Ordinary	100%	Manufacturer of composite material products for the aerospace sector

14.        Inventories

	31 October	31 October
	2025	2024
	£'000	£'000
Raw materials & consumables	1,705	1,698
Finished goods	394	802
	2,099	2,500

Inventories totalling £2,099,000 (2024: £2,500,000) are valued at the lower of cost and net realisable value. The Directors consider that this value represents the best estimate of the fair value of those inventories net of costs to sell. The increase of inventories provision during the previous year amounted to £31,000 Velocity Composites plc and £23,000 for Velocity Composites Aerospace Inc, in 2024 there was a decrease of £55,000 for Velocity Composites plc and £47,000 for Velocity Composites Aerospace Inc.

The inventory at 31 October 2025 is after a stock provision of £326,000 (2024: £272,000). The provision reflects the aged stock profile consistent with FY2024, as well as specific provisions related to slow moving stock as a result of reduced demand.

Inventories recognised as an expense during the year ended 31 October 2025 amounted to £12,598,000 (2024: £14,966,000), and these were included in cost of sales.

 

15.        Trade and other receivables

	31 October	31 October
	2025	2024
	£'000	£'000
Trade receivables	2,471	3,349
Prepayments	434	400
Other receivables	9	98
Tax receivable	111	130
Amounts due from subsidiary undertakings	-	-
	3,023	3,977

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are generally due for settlement within an average of 44 days (2024: 53 days) and therefore are all classified as current. Trade receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant financing components, when they are recognised at fair value. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost. Details about the Group's impairment policies and credit risk are provided in note 3. £71,000 Trade receivables (Group and Company) were overdue by more than three months at the year-end (2024: £23,000).

The overall expected credit loss is trivial (2024: trivial). There is no movement in allowance of impairment of trade receivables during each year.

Trade receivables (Group and Company) held in currencies other than sterling are as follows:

	31 October	31 October
	2025	2024
	£'000	£'000
Euro	117	235
US Dollar	2,120	2,763
	2,237	2,998

16.        Cash and cash equivalents

	31 October	31 October
	2025	2024
	£'000	£'000
Cash at bank	392	1,663
	392	1,663

 

 

17.        Trade and other payables

	31 October	31 October
	2025	2024
	£'000	£'000
Trade payables	1,704	3,251
Accruals and deferred income	353	366
Other taxes and social security	429	316
Other payables	29	-
	2,515	3,933

Book values approximate to fair values.

18.        Bank loans

	31 October	31 October
	2025		2024
	£'000		£'000
Not later than one year	402		503
One to two years	95		468
	497		971

In FY2020 the Company took out a Coronavirus Business Interruption Loan for £2.0m and on 19 January 2021 the term of this loan was extended to 6 years. Repayment by instalment commenced in August 2021, with the final instalment due in July 2026. The loan was interest free for the initial 12 months, followed by a fixed interest rate of 4.39%.

During FY2022, the Company took out a further Coronavirus Business Interruption Loan for £0.45m secured against owned non-current assets. This is being repaid over 5 years with the first payment made in July 2021 and the final instalment due in June 2027. The loan was interest free for the initial 12 months, followed by a fixed interest rate of 7.75% per annum.

 

19.        Leases

Right-of-use-assets

Group	Land & buildings	Plant & machinery	Motor vehicles	Total
	£'000	£'000	£'000	£'000
Cost
Balance at 31 October 2023	2,665	561	205	3,431
Additions	-	165	107	272
Exchange adjustments	(38)	-	-	(38)
Balance at 31 October 2024	2,627	726	312	3,665
Additions	-	688	86	774
Disposals	(121)	(2)	-	(123)
Exchange adjustments	-	(20)	-	(20)
Balance at 31 October 2025	2,506	1,392	398	4,296
Depreciation
Balance at 31 October 2023	841	375	86	1,302
Depreciation charge for the year	413	82	45	540
Exchange adjustments	(3)	-	-	(3)
Balance at 31 October 2024	1,251	457	131	1,839
Depreciation charge for the year	410	81	141	632
Disposals	(121)	(2)	-	(123)
Exchange adjustments	(2)	(1)	(2)	(5)
Balance at 31 October 2025	1,538	535	270	2,343
NBV
At 31 October 2023	1,824	186	119	2,129
At 31 October 2024	1,376	269	181	1,826
At 31 October 2025	968	857	128	1,953

 

The associated right-of-use assets for property leases and other assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the statement of financial position as at 31 October 2025.

Right-of-use lease liabilities

	Group
	£'000
At 31 October 2024	1,819
Repayment	(788)
Additions to right-of-use assets in exchange for increased lease liabilities	774
Interest and other movements	103
Exchange adjustments	(13)
At 31 October 2025	1,895

 

 

Analysis by length of liability

Group	Land & buildings	Plant & equipment	Motor vehicles	Total
	£'000	£,000	£'000	£'000
Current	409	212	82	703
Non-current	498	579	128	1205
Exchange adjustments	(13)	-	-	(13)
	894	791	210	1895
Number of right-to-use assets leased	4	3	7
Range of remaining term	1-10 years	1-10 years	1-4 years

Reconciliation of minimum lease payments to present value

Group	Minimum lease payments	Interest	Present value
	£'000	£'000	£'000
31 October 2024
Not later than one year	651	90	561
Later than one year and not later than two years	646	71	575
Later than two years and not later than five years	781	98	683
	2,078	258	1,819
31 October 2025
Not later than one year	794	91	703
Later than one year and not later than two years	758	72	686
Later than two years and not later than five years	578	72	506
	2,130	235	1,895

Low value leases

The Group leases comprise both office and assembly space, under low value leases. The total value of the minimum lease payments due is payable is £nil (2024: £nil).

Low value leases not classed as right-of-use assets due to the minimal value of the lease, relate to IT and office equipment, all other prior year operating leases have been classed as right-to-use asset on transition to IFRS 16. Payments made under such leases are expensed on a straight-line basis.

20.        Deferred tax

Deferred tax is calculated in full on temporary differences under the liability method using tax rates appropriate for the year. The movement on the deferred tax account is as shown below:

The movement on the deferred tax (asset)/liability is shown below:

Company	31 October	31 October
	2025	2024
	£'000	£'000
Unrecognised deferred tax in respect of losses brought forward	(1,668)	(1,630)
Corporation tax loss adjustments in respect of prior year		120
Corporation tax losses arising during the year	(271)	(158)
Unrecognised deferred tax in respect of losses carried forward	(1,939)	(1,668)

The Group has unused tax losses which were incurred by the parent company. A deferred tax asset of £1,905,000 (2024: £1,668,000) is not recognised in these accounts. Corporation tax losses can be carried forward indefinitely and can be offset against future profits which are subject to UK corporation tax.

21.        Reconciliation of liabilities arising from financing activities

Group	Lease liabilities < one year	Other short-term borrowings	Lease liabilities > one year	Other long-term borrowings	Total
	£'000	£'000	£'000	£'000	£'000
At 31 October 2023	487	503	1,587	970	3,547
Cash flows
Repayment	(597)	(502)	-	-	(1,099)
Non-cash
Other differences	-	-	70	-	70
Increase to lease liabilities	-	-	272	-	272
Transfer from long-term to short term borrowings	671	502	(671)	(502)	-
As at 31 October 2024	561	503	1,258	468	2,790
Cash flows
Repayment	(788)	(474)	-	-	(1,262)
Non-cash
Other differences	-	-	91	-	91
Increase to lease liabilities	-	-	773	-	773
Transfer from long-term to short term borrowings	930	373	(930)	(373)	-
As at 31 October 2025	703	402	1,192	95	2,392

22.        Share capital

	31 October	31 October
	2025	2024
	£	£
Share capital issued and fully paid
54,669,371 (2024: 53,509,706) Ordinary shares of £0.0025 each	136,673	133,774

Ordinary shares have a par value of 0.25p. They entitle the holder to participate in dividends, and to share in the proceeds of winding up the Company in proportion to the number of and amounts paid on the shares held.

On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. The Company does not have a limited amount of authorised capital.

Movements in share capital	Nominal value	Number of shares
	£
Ordinary shares of £0.0025 each
At the beginning of the year	133,774	53,509,706
Exercising of share options	2,899	1,159,665
Closing share capital at 31 October 2025	136,673	54,669,371

 

 

Options

Information relating to the Velocity Composites plc Employee Option Plan, including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the reporting year, is set out in note 24.

23.        Share premium

	31 October	31 October
	2025	2024
	£'000	£'000
At the beginning of the year	4,870	4,870
Shares issued net of transaction costs	21	-
At the end of the year	4,891	4,870

24.        Share-based payments

The Group's employees are granted option awards under the Velocity Composites plc Enterprise Management Incentive and Unapproved Scheme.

The following options were outstanding as at 31 October 2025:

Grant date	Exercise price (£)	Vesting date	Expiry date	Vested	Not vested	Total
13 March 2017	0.0025	13 Mar 2019	13 Mar 2027	20,000	-	20,000
01 April 2021	0.1300	01 Apr 2021	01 Apr 2026	125,000	-	125,000
26 January 2022	0.0025	26 Jan 2023	01 Nov 2027	103,529	-	103,529
28 March 2023	0.0025	28 Mar 2024	28 Mar 2028	267,333	-	267,333
15 July 2024	0.4150	30 Apr 2026	16 July 2034	-	1,040,000	1,040,000
30 January 2025	0.2572	31 Oct 2028	01 Feb 2035	-	1,440,000	1,440,000
30 January 2025	0.0025	01 Nov 2025	30 Jan 2030	-	165,518	165,518
30 January 2025	0.2572	03 Jun 2027	01 Feb 2035	-	125,000	125,000
30 January 2025	0.2572	03 Feb 2028	01 Feb 2035	-	75,000	75,000
				515,862	2,845,518	3,361,380

The remaining 20,000 share options dated 13 March 2017 have no attached performance conditions and have vested as a resulted of continued employment. The options may be exercised at any point up to the tenth anniversary of the grant date.

The 125,000 shares options dated 1 April 2021 have no attached performance conditions and have vested as a result of continued employment. The options were awarded in relation to senior management employee joining and providing an equity incentive around the performance of the business. The options may be exercised at any point up to the tenth anniversary of the grant date.

The 103,529 remaining shares options dated 26 January 2022 have no attached performance conditions and have been issued in exchange for qualifying staff agreeing to accept 20% of their basic salary in equity alternatives.

The remaining 267,233 shares options dated 28 March 2023 have no attached performance conditions and have been issued in exchange for qualifying staff agreeing to accept 20% of their basic salary in equity alternatives.

The 1,040,000 shares options dated 15 July 2024 were issued under the Company's Long Term Incentive Plan (LTIP) and have attached performance conditions linked to profit after tax. They vest after two years, or earlier if a vesting event occurs in the rules of the Scheme.

The 1,440,000 shares options dated 30 January 2025 were issued under the Company's LTIP and have attached performance conditions linked to profit after tax. They vest after two years, or earlier if a vesting event occurs in the rules of the Scheme.

The 165,518 shares options dated 30 January 2025 have no attached performance conditions and have been issued in exchange for qualifying staff agreeing to accept 20% of their basic salary in equity alternatives.

The 125,000 and 75,000 shares options dated 30 January 2025 have no attached performance conditions and vest subject only to continued employment. They were awarded in relation to the appointment of Rob Smith as a director of the company and a senior management employee joining, providing an equity incentive around the performance of the business. The options vest on the third anniversary of the employees commencing their roles and options may be exercised at any point up to the tenth anniversary of the grant date.

Vesting events are defined within the rules of the Scheme as a reorganisation, takeover, sale, listing (except on AIM), asset sale, or death of the Option holder. The options may be exercised at any point up to the tenth anniversary grant date.

There were no cancellations or modifications to the awards in the year.

The Group recognised a cost of £386,000 (2024: £143,000) relating to share-based payment transactions which are all equity settled, an equivalent amount being transferred to share-based payment reserve. This reflects the fair value of the options, which has been derived through use of the Black-Scholes model.

The cost of share-based payments is included in "Administrative expenses" within the Statement of total comprehensive income. The share-based payments reserve is used to recognise the grant date fair value of options issued to employees but not exercised. The table below sets out the movement to the share-based payment reserves in the year.

The tables below split the share-based payments according to the terms they have been awarded.

Share options granted to employees on the Company's listing on AIM:

Grant date	Exercise price (£)	Vesting date	Expiry date	Vested	Not vested	Total
13 March 2017	0.0025	13 Mar 2019	13 Mar 2027	20,000	-	20,000
				20,000	-	20,000

Share options granted under the salary sacrifice scheme:

Grant date	Exercise price (£)	Vesting date	Expiry date	Vested	Not vested	Total
26 January 2022	0.0025	26 Jan 2023	01 Nov 2027	103,529	-	103,529
28 March 2023	0.0025	28 Mar 2024	28 Mar 2028	267,333	-	267,333
30 January 2025	0.0025	01 Nov 2025	30 Jan 2030	-	165,518	165,518
				370,862	165,518	536,380

 

Share options granted under the LTIP scheme:

Grant date	Exercise price (£)	Vesting date	Expiry date	Vested	Not vested	Total
15 July 2024	0.4150	30 Apr 2026	15 July 2034	-	1,040,000	1,040,000
30 January 2025	0.2572	31 Oct 2028	30 Jan 2035	-	1,440,000	1,440,000
				-	2,480,000	2,480,000

Share options granted to senior managers and directors on joining the business:

Grant date	Exercise price (£)	Vesting date	Expiry date	Vested	Not vested	Total
01 April 2021	0.1300	01 Apr 2021	01 Apr 2026	125,000	-	125,000
30 January 2025	0.2572	03 Jun 2027	30 Jan 2035	-	125,000	125,000
30 January 2025	0.2572	03 Feb 2028	30 Jan 2035	-	75,000	75,000
				125,000	200,000	325,000

Movement in share options

Grant date	As at 1 Nov 2024	Granted	Lapsed	Exercised	As at 31 Oct 2025
	£'000	£'000	£'000	£'000	£'000
13 March 2017	31	-	-	(18)	13
17 October 2017	10	-	(10)	-	-
29 October 2019	16	-	-	(16)	-
30 October 2020	24	-	-	(24)	-
01 April 2021	14	-	-	(4)	10
01 April 2021	8	-	-	-	8
26 January 2022	46	-	-	(23)	23
26 January 2022	24	-	-	(24)	-
29 March 2022	4	-	-	(4)	-
28 March 2023	186	-	-	(96)	90
24 January 2024	54	-	-	(54)	-
24 January 2024	58	-	-	(58)	-
15 July 2024	42	233	(15)	-	260
30 January 2025	-	169	-	-	169
	517	402	(25)	(321)	573

25.        Provisions

As at 31 October 2025 a provision of £256,000 (2024: £218,000) has been recognised in relation to dilapidations.

As part of the Group's property leasing arrangements there is an obligation to return properties to their original condition at the end of the lease. The cost is charged to profit and loss as the obligation arises. The provision is expected to be utilised between 2026 and 2029 as the leases terminate.

The dilapidations provision is considered a source of significant estimation uncertainty. The provision has been calculated using one years' worth of rental over estimated lease termination dates prorated to the term the lease has been occupied.

26.        Related party transactions

Balances and transactions between the Company and its subsidiary, which are related parties, have been eliminated on consolidation. However, the key transactions with other related parties are as follows:

During the year, the Group engaged North West Aerospace Alliance, which provides membership and subscription services for the Aerospace Industry. One of the directors of North West Aerospace Alliance Limited is a director of Velocity Composites plc. The Group paid £1,440 (2024: £809) to North West Aerospace Alliance during the year and had £nil outstanding at the year-end (2024: £nil).

27.        Ultimate controlling party

The Company's ordinary shares are publicly trade on the AIM market, part of the London Stock Exchange. There is no single controlling entity.

The Directors do not consider there to be an ultimate controlling party due to no individual party owning a majority share in the Group.

28.        Capital commitments

At 31 October 2025 the Group had £nil (2024: £1,164,144) of capital commitments relating to the purchase of leasehold improvements, plant and machinery and fixture and fittings.

29.        Pension commitments

The Group makes contributions to defined contribution stakeholder pension schemes. The contributions for the year of £191,000 (2024: £96,000) were charged to the Consolidated Income statement. Contributions outstanding as at 31 October 2025 were £nil (2024: £nil).

30.        Contingent liabilities

As at 31 October 2025, National Westminster Bank plc holds a debenture that provides a fixed and floating charge on the assets of the Company.

31.        Adjusted EBITDA

EBITDA is considered by the Board to be a useful alternative performance measure reflecting the operational profitability of the business. Adjusted EBITDA is defined as earnings before finance charges, taxation, depreciation, amortisation and adjusted for share-based payments. Share-based payments are added back to make the share-based payment charge clear to stakeholders.

	Year ended	Year ended
	31 October	31 October
	2025	2024
Reconciliation from operating loss	£'000	£'000
Operating loss	(718)	(931)
Add back:
Depreciation of property, plant and equipment	380	382
Amortisation	310	240
Depreciation of right-of-use assets under IFRS 16	632	540
Share-based payments	386	143
Adjusted EBITDA	990	374