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Testing times for AB Dynamics

The testing systems specialist is benefiting from structural change in the global auto market
April 24, 2018

Estimates from BMI Research point to a 3.6 per cent increase in global vehicle sales this year, driven largely by emerging markets growth, while investment in disruptive automotive technologies (electrification, automated driving, etc.) is also on the rise. This provides fertile ground for AB Dynamics’ (ABDP) commercial offering, and is reflected in the testing systems specialist’s half-year metrics, with adjusted pre-tax profits up a third to £3.3m and an order book “providing visibility into FY2019”.

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The group continues to see rising interest for Guided Soft Targets used in the evaluation of advanced driver assistance systems (essentially safety interfaces), while demand for Driving Robots is also at an all-time high. Growing auto sales in Italy, Spain, Poland, France and, to some extent, Germany, underpinned a 33 per cent rise in sales to the continent, but even the domestic UK market, which has witnessed a sharp decline in new car registrations, performed strongly for the group. But you get some idea of the chief growth driver by the 70 per cent sales increase to the ‘rest of the world’, which at £8.92m now accounts for well over half of total revenues.

Cantor Fitzgerald is guiding for pre-tax profits of £7.6m for the August 2018 year-end, leading to EPS of 32.7p, against £5.9m and 28.3p in 2017.

AB DYNAMICS (ABDP)   
ORD PRICE:960pMARKET VALUE:£186m
TOUCH:950-970p12-MONTH HIGH:1,090pLOW: 565p
DIVIDEND YIELD:0.4%PE RATIO:36
NET ASSET VALUE:163pNET CASH:£12.9m
Half-year to 28 FebTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201711.01.76.71.331
201815.32.912.41.465
% change+39+78+86+10
Ex-div:3 May   
Payment:18 May