No surprises in AB Dynamics ' (ABDP) half-year figures following on from the March trading update. Revenues for the automotive testing systems designer benefited from favourable currency translations, unsurprising given that the bulk of sales are generated abroad, while pre-tax profits were up 9 per cent to £2.5m once the impact of share option costs is excluded. The adjusted operating margin held firm at 22 per cent despite a marked step up in capital expenditure. This resilience is again partly a knock-on effect of the relative weakness of sterling, but the figures only tell us so much about underlying trading.
The group's commercial prospects are being bolstered by tightening performance and safety standards within the automotive industry, but this is coupled with the cost-saving imperative. Management highlights strengthening demand for its guided soft targets (GST), dummy vehicles used for testing vehicle collision detection and pre-crash systems. Soft target vehicles and similar 'soft pedestrian' target systems allow controlled damage-free collisions.
AB notes that automakers are increasingly basing design and production decisions on a combination of physical testing and multiple data sources, including digitalised automotive imaging. The group is in an advantageous position as its GST technologies have received approvals from Europe's two principal vehicle safety organisations for advanced driver-assistance systems testing.
Cantor Fitzgerald gives pre-tax profits of £5.1m for the August year-end, leading to EPS of 21.8p, against £4.7m and 23.8p in FY2016.
| AB DYNAMICS (ABDP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 608p | MARKET VALUE: | £116m | |
| TOUCH: | 600-615p | 12-MONTH HIGH: | 625p | LOW: 375p |
| DIVIDEND YIELD: | 0.5% | PE RATIO: | 33 | |
| NET ASSET VALUE: | 132p | NET CASH: | £14.8m | |
| Half-year to 28 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2016 | 10.1 | 2.3 | 10.5 | 1.210 |
| 2017 | 11.0 | 1.7 | 6.7 | 1.331 |
| % change | +9 | -27 | -37 | +10 |
Ex-div: 4 May Payment: 19 May | ||||
