AB Dynamics reports strong first-half revenue growth
By Josh White
Date: Wednesday 23 Apr 2025
(Sharecast News) - AB Dynamics reported an 11% increase in revenue to £58m for the six months ended 28 February on Wednesday, reflecting robust demand across its global transport testing and simulation markets.
The AIM-traded firm said adjusted operating profit rose 21% to £10.8m, with margins expanding 160 basis points to 18.6%, supported by operational improvements, favourable revenue mix, and scale benefits.
Adjusted EBITDA rose 22% to £12.9m, while adjusted diluted earnings per share increased 20% to 37p, despite a higher effective tax rate of 20%.
Net cash at period-end stood at £27.2 million, down slightly from £29.1m a year earlier, after the acquisition of Bolab Systems for £3.5m.
The interim dividend was raised 20% to 2.8p per share.
Growth was broad-based, with ongoing investment in new product development aligned to the group's technology roadmap.
During the period, the company delivered the first units of a new automated mileage accumulation solution to a major automotive OEM, leveraging its ABD Solutions technology.
The integration of Bolab, a specialist in automotive power electronics testing, was said to be progressing as planned.
AB Dynamics said it made a strong start toward its medium-term growth plan announced in November, targeting 10% annual organic growth, margin expansion to 20%, and strong cash generation.
The company also highlighted commercial opportunities beyond automotive markets through ABD Solutions, which is transitioning from development to commercialisation.
Trading in the first half was described as strong, with a solid order book providing visibility into the second half.
While the group noted potential macroeconomic risks linked to rising global tariffs and trade disruptions, it said it expected limited direct exposure and is prepared to mitigate cost pressures through price increases.
Despite acknowledging possible delays in pipeline conversion due to broader economic uncertainty, the board confirmed that it expected to deliver full-year adjusted operating profit in line with current expectations.
Long-term growth remained underpinned by structural demand in areas such as vehicle safety, autonomy, and automation.
"The group has made a strong start to delivering the medium-term growth plan which we articulated in November 2024," said chief executive officer Dr James Routh.
"We see significant opportunity in our core markets in automotive, which are supported by long-term structural and regulatory growth drivers, and are continuing to invest in new product development and technology.
"In addition, we are starting to see the benefit of the investment in innovative technologies to diversify the business through our technology accelerator, ABD Solutions, with the first revenues seen in the first half of 2025."
Dr Routh said trading in the first half of the financial year had been strong, supported by a solid order book, providing good visibility into the second half of the financial year.
"The extent and rapid evolution of recent changes in international trade policies and market dynamics are unprecedented, making precise quantification of direct and indirect impacts challenging.
"The group's direct exposure to the most significant increases in tariffs announced to date is likely to be limited, but the more general inflationary impacts of increasing global tariffs and possible indirect effects will be kept under review and mitigated where possible through price increases.
"The group's geographic diversification and critical nature of its market-leading products and services have created a highly resilient platform that is well-positioned to support customers navigating these dynamic market conditions."
While being mindful of a potential slowdown in timing of pipeline conversion due to the wider macroeconomic disruption, Dr Routh said the board was confident that the group would make further financial and strategic progress this year.
"With strong trading momentum entering the second half and improving margins, the board expects to deliver adjusted operating profit for the 2025 financial year in line with current expectations."
At 0900 BST, shares in AB Dynamics were down 0.29% at 1,710p.
Reporting by Josh White for Sharecast.com.
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