This engine was never made to be a racer and will not make a good racer.
In the 1920's Villiers made three 175 engines, the Sport, (your engine), the Super Sport and the Brooklands. The Brooklands engine was the racer, the Super Sports was the sporting engine for road bikes and the Sport was the standard road engine. They are very different engines and the Sport cannot be upgraded to either Super Sport or Brooklands standard.
Your Monet Goyen will make a very good vintage road bike if you can get it running properly.
Cheers,