AB Dynamics’ (ABDP) track testing business remains the driver of its growth, with revenue jumping more than a quarter to £30m in the six months to 29 February. This was boosted by higher sales of its Advanced Driver Assistance Systems (ADAS) test platforms, demand for which is underpinned by vehicle safety regulations.
While gross profit came in over 50 per cent higher year-on-year, statutory operating profit plunged by more than two-fifths to £3.6m on the back of higher administrative costs. Those included amortisation of intangibles from last year’s acquisitions of Dynamic Research Incorporated and rFpro, and inventory impairments.
With £35m of net cash after excluding lease liabilities, the group said this would provide sufficient headroom to operate “for the foreseeable future”, even under the most severe Covid-19 scenario. To date, it has not seen any material disruption, although some customers deferred higher value orders in March and April. AB Dynamics says order intake is likely to be affected in the second half, but it has sufficient inventory and work in progress to maintain production schedules. Still, uncertainty over the future outlook has led the group to suspend the half-year dividend.
Liberum has cut its full-year forecasts by 20 per cent, and now expects adjusted pre-tax profit of £13.7m and EPS of 49.3p. It expects these will rise to £15.6m and 55.7p in 2021.
| AB DYNAMICS (ABDP) | ||||
| ORD PRICE: | 1,505p | MARKET VALUE: | £ 337m | |
| TOUCH: | 1,500-1,510p | 12-MONTH HIGH: | 2,850p | LOW: 855p |
| DIVIDEND YIELD: | 0.2% | PE RATIO: | 53 | |
| NET ASSET VALUE: | 448p* | NET CASH: | £34m** | |
| Half-year to 29 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 25.8 | 6.29 | 28.4 | 1.61 |
| 2020 | 34.7 | 3.66 | 13.7 | nil |
| % change | +34 | -42 | -52 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £38.2m, or 171p a share **Netted against £0.9m in lease liabilities | ||||
