- Full-year profits ahead of expectations
- Progress on margins
Shares in AB Dynamics (ABDP) edged up after the automotive testing group fleshed out details from its late-February trading update. The main takeaway is that adjusted operating profits will be ahead of current expectations. Half-year profits came in at £8.9mn from £7.7mn last time around.
The related margin improved by 110 basis points to 17 per cent, reflecting “increased levels of activity” and the benefits of “enhanced performance initiatives”, even though profitability was constrained to the tune of 160 basis points by further investments in ABD Solutions. The positive news on margins is doubly impressive given inflationary cost pressures, but internal efficiencies are also reflected in a cash conversion rate of 107 per cent and operating cash generation of £11.3mn, against £9.5mn at the 2023 interim mark.