In April, when we advised shareholders to 'take profits' as our buy call on AB Dynamics (ABDP) was a measly 51 per cent to the good, we noted that "inventories and receivables have soared...a reflection of the marked step-up in commercial activity". We should have kept the faith; the share price has cranked up another 45 per cent since our last update and the manufacturer of automobile testing products has just revealed record full-year profits, while confirming that the "order intake has continued to run ahead of sales".
Inventory levels continue to surge, a reflection of the step-up in order volumes. And although the group has been building capacity and developing new product lines and systems, with the new facility in Bradford on Avon now fully operational, it is looking to develop an adjacent site for an additional factory of approximately 3,000 square metres to meet "future expansion needs".
Broker Cantor Fitzgerald forecasts adjusted pre-tax profits for the August 2019 year-end of £10.8m, with EPS of 46.4p, up from £8.6m and 38.3p in 2018.
AB DYNAMICS (ABDP) | ||||
ORD PRICE: | 1,390p | MARKET VALUE: | £271m | |
TOUCH: | 1,350-1,430 | 12-MONTH HIGH: | 1,473p | LOW: 724p |
DIVIDEND YIELD: | 0.3% | PE RATIO: | 38 | |
NET ASSET VALUE: | 195p | NET CASH: | £15.9m |
Year to 31 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2014 | 13.8 | 2.7 | 13.1 | 2.500 |
2015 | 16.5 | 3.8 | 19.2 | 2.750 |
2016 | 20.5 | 4.5 | 22.3 | 3.025 |
2017 | 24.6 | 4.5 | 20.8 | 3.331 |
2018 | 37.0 | 7.9 | 36.3 | 3.665 |
% change | +50 | +76 | +75 | +10 |
Ex-div: | 22 Nov | |||
Payment: | 14 Dec |