LONDON (ShareCast) - (Sharecast News) - Testing and measurement technology company AB Dynamics reported a 29% improvement in first half revenue year-on-year on Wednesday, to £37.8m, as its board said it had confidence it would beat full-year expectations.
The AIM-traded firm said revenue was ahead 21% on an organic constant currency basis, although it was against a weak comparative period impacted by Covid-19.

It said order intake momentum continued with strong growth, particularly in the Asia-Pacific region.

The group's positive book-to-bill ratio provided "confidence" in delivery of second half revenue expectations, a "significant proportion" of which was covered by the current order book.

Constant currency revenue was slightly up against the second half of 2021 in the six months ended 28 February, AB Dynamics said, reflecting increased track testing activity.

Track testing revenue was 45% higher year-on-year, up 23% on an organic constant currency basis, and up 6% against the second half of 2021.

Laboratory testing and simulation delivered revenue growth of 17% year-on-year, driven by increased demand for simulation software.

Operating margins came in at 15.1%, up 230 basis points, which the board put down to the increased levels of activity.

AB Dynamics said adjusted cash flow from operations was "strong" at £8.5m, up from £8m a year earlier.

Its net cash balance totalled £27.7m at the end of the first half, compared to £33.1m a year earlier and £22.3m at the end of the 2021 financial year, which the board said provided "scope" for continued support to the group's strategic growth objectives.

The board proposed an interim dividend of 1.76p per share, up 10% from the 1.6p interim distribution paid last year.

Looking ahead, AB Dynamics said its performance in the first half was as anticipated, with good conversion of orders to sales, with the positive trend providing it with confidence for continued momentum into the second half.

It said that, while it was mindful of ongoing geopolitical uncertainty, it now expected the financial results for the current year to be "slightly ahead" of market expectations.

Future growth prospects remained supported by long-term structural and regulatory growth drivers in active safety, autonomous systems and the automation of vehicle applications.

"The group has delivered a strong financial and operational performance in the first half of the year, with continued momentum in our key markets and progress against our strategic objectives," said chief executive officer James Routh.

"Against the backdrop of external challenges in relation to supply chain disruption and inflationary pressures, the group has, to date, successfully mitigated these effects and continued to invest in all areas of the business, supporting our ambitious growth plans."

Dr Routh said that, while it was mindful of ongoing geopolitical uncertainty and the risk of further logistics disruption and inflation, given the improvement in order intake the board now expected the financial results for the year to be "slightly ahead" of market expectations.

"Our market drivers remain strong.

"Against that background and based on the recent track record of improving demand and continued strategic investment, the board is confident of delivering progress during the second half of 2022 and beyond."

At 1008 BST, shares in AB Dynamics were up 4.74% at 1,414p.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE