LONDON (ShareCast) - (Sharecast News) - Testing, simulation and measurement technology specialist AB Dynamics reported first-half revenue growth of 30% to £49m in its interim results on Tuesday, with a gross margin of 57.1%.
The AIM-traded firm said its adjusted operating profit grew 37% in the six months ended 28 February, to £7.8m, while its adjusted operating margin was ahead 80 basis points at 15.9%.

Adjusted cash flow from operations rose 12% to £9.5m.

AB Dynamics said its track testing revenue grew 13%, reflecting increases in robots and ADAS platforms, while laboratory testing and simulation revenue increased 99%, driven by a strong performance at rFpro and the delivery of SPMM systems.

The proportion of recurring and service-based sales remained unchanged at 41%, while the group managed to mitigate inflationary cost pressures with good gross margins.

ABD Solutions invested in supporting the company's strategic long-term growth drivers, partially offsetting the benefits of enhanced performance initiatives.

Excluding ABD Solutions, the operating margin increased to 18%.

Operating cash generation remained strong at £9.5m, and the company reported a significant net cash balance of £21.3m at the end of the period.

The board hiked the interim dividend by 10% to 1.94p per share.

"The group has delivered a strong financial and operational performance in the first half of the year, with growth in the core business as well as progress in the development of ABD Solutions and in our simulation business with the acquisition of Ansible Motion," said chief executive officer James Routh.

"Against the backdrop of ongoing external challenges in relation to supply chain disruption and wider economic uncertainty, the group has delivered growth in revenue, operating profit and operating margins.

"We have also continued to invest in all areas of the business, supporting improved capability as well as our ambitious growth plans."

Dr Routh said the company saw "significant opportunity" in its core markets within automotive, supported by long-term structural and regulatory growth drivers.

"We are continuing to invest in new product development and technology whilst also investing in innovative technologies to diversify the business into attractive adjacent markets through ABD Solutions.

"Despite the risk of short-term volatility relating to global macroeconomic conditions and timing of order intake, our market drivers both in our core business and in ABD Solutions remain strong.

"This backdrop, along with the group's recent investments in capability and new products, provides confidence in achieving the board's expectations during the second half of 2023 and delivering further progress in the years beyond."

At 1138 BST, shares in AB Dynamics were up 2.35% at 1,740p.

Reporting by Josh White for Sharecast.com.

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