TIDMABDP
RNS Number : 3622Z
AB Dynamics PLC
18 September 2020
18 September 2020
AB Dynamics plc
("AB Dynamics" or "ABD" or the "Group")
Trading Update & Notice of Results
AB Dynamics plc (AIM: ABDP), the designer, manufacturer and
supplier of advanced testing systems and simulation products to the
global automotive and mobility sectors, provides a trading update
in advance of the publication of its results for the year ended 31
August 2020.
Business performance
The business is performing well against the challenging global
trading backdrop caused by COVID-19. Our manufacturing facilities
have been fully operational with no significant supply chain
issues, ensuring the Group has been able to deliver against
customer requirements. While many of our employees continue to work
from home, we are taking a cautious approach in returning to our
offices, in line with guidance of local governments, with the
safety of staff being our priority.
Reflecting the resilience of the business model and the Group's
strong market positions, we expect to report revenue for the year
ended 31 August 2020, in the range of GBP60m to GBP62m. This
includes the effect of COVID-19 specific disruption to our
international customers, which resulted in a reduction in activity
levels in the second half with Group revenues for the period being
down by approximately 20% against a very strong prior year
comparator.
Track testing, which tends to have a shorter order cycle, was
impacted by the suspension of customer testing operations during
lockdown. As customer activity has restarted, we have seen order
intake recover during the final quarter. The Board anticipates this
recovery towards pre-COVID levels will continue into the new year,
provided there are no further significant market disruptions.
As previously indicated, laboratory testing and simulation was
impacted by deferment of anticipated orders as customers delayed
capital procurement decisions and motorsport series were suspended.
Good engagement with customers has been maintained through this
challenging period and we remain confident of winning these
deferred orders, albeit timing is likely to be dependent on further
stabilisation of customer visibility.
Gross margins are anticipated to be ahead of the prior year,
benefitting from the transition to a direct sales model in key
territories as well as the positive mix contribution from service
contract revenues. In response to the uncertainty presented by the
pandemic, as well as the short-term impact on activity levels,
mitigating actions were promptly implemented to control
discretionary spending and conserve cash where appropriate. The
Group has continued to invest in new product development as well as
the business infrastructure which the Board believes is critical to
delivering its long-term growth and strategic development
objectives for the business.
Financial position
The Group has been able to maintain its very strong financial
position through the second half, with cash at 31 August 2020 of
GBP31.1m (2019: GBP36.2m), after investing in new product
development and our capability and capacity, including GBP5.2m on
the North Site construction project.
Progress against strategy
The Group's financial position, together with the resilience of
the trading performance through H2, has enabled the Group to
maintain momentum in its strategic development programme with
investment to underpin long-term organic growth and returns
generation.
We are pleased with the ongoing progress made against the five
point strategy announced in April 2019. Investments in geographic
diversification, direct routes to market and our service and
support offering have been complemented by the commencement of
important initiatives to improve our systems, processes and
structure. This, together with continued investment in
infrastructure, people and new product development will result in a
resilient, sustainable business able to more effectively take
advantage of the significant structural and regulatory changes in
our end markets.
Moving into the new year, the Board continues to see significant
scope to accelerate the Group's progress and deliver on its
strategic priorities, including further product development as well
as progressing its pipeline of potential acquisition
opportunities.
Dividend
Given the greatly elevated uncertainty at the time of the
interim results, the Board took the prudent decision to suspend the
interim dividend. In line with the Group's broader capital
allocation policy and reflecting its confidence in the outlook for
the business, it is the Board's intention to reinstate payment of a
dividend at the year end.
Change in presentation of share-based payment charge
The Group has previously reported the share-based payment charge
as an adjustment to operating profit, however for the year ended 31
August 2020 onwards, the charge will be included within adjusted
reporting measures. The expected impact in 2020 is GBP1.3m.
Notice of results
The Group will announce its results for the year ended 31 August
2020 on Wednesday 25 November 2020. The management team will be
hosting a presentation for analysts on the day of the results.
Analysts who wish to attend the presentation should register their
interest with Tulchan Communications at abdynamics@tulchangroup.com
or 0207 353 4200.
Dr James Routh, CEO commented, "Despite the ongoing impact of
the COVID-19 pandemic, the Group has demonstrated the resilience of
its business model and the commitment of its employees. We continue
to make good progress against our stated strategic priorities and
the long-term regulatory and structural growth drivers remain
intact. We are pleased with the progress of the businesses acquired
during 2019 against a backdrop of challenging market conditions and
we have introduced new products and services that will facilitate
future growth."
Enquiries:
AB Dynamics plc 01225 860 200
Dr James Routh, Chief Executive Officer
Sarah Matthews-DeMers, Chief Financial
Officer
Peel Hunt LLP 0207 418 8900
Mike Bell
Ed Allsopp
Tulchan Communications 0207 353 4200
James Macey White
Matt Low
Laura Marshall
The person responsible for arranging the release of this
information is Felicity Jackson, Company Secretary.
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER
THE EU MARKET ABUSE REGULATION (596/2014). UPON THE PUBLICATION OF
THE ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
About AB Dynamics plc
AB Dynamics is a leading designer, manufacturer and provider of
advanced products for testing and verification of Advanced Driver
Assistance Systems ("ADAS") technology, autonomous vehicle
development and vehicle dynamics to the global automotive research
and development sector.
AB Dynamics is an international group of companies headquartered
in Bradford-on-Avon, UK. AB Dynamics currently supplies all the top
automotive manufacturers, Tier 1 suppliers and service providers,
who routinely use the Group's products to test and verify vehicle
safety systems and dynamics.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCEAXNXFSKEEFA
(END) Dow Jones Newswires
September 18, 2020 02:00 ET (06:00 GMT)
Ab Dynamics (LSE:ABDP)
Historical Stock Chart
From Mar 2024 to Apr 2024
Ab Dynamics (LSE:ABDP)
Historical Stock Chart
From Apr 2023 to Apr 2024