AB Dynamics Regulatory News (ABDP)

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

24 April 2018

AB Dynamics plc("ABD" or the "Group")

Interim Results for the 6 months ended 28 February 2018

AB Dynamics plc (AIM:ABDP), a designer, manufacturer and supplier of advanced testing systems and measurement products to the global automotive industry, is pleased to announce its Interim Results for the six month period to 28 February 2018.

Financial Highlights

· Revenues increased 39% to £15.3m (H1 2017: £11.0m)

· Profit before tax, excluding share option costs, increased 34% to £3.30m (H1 2017: £2.46m)

· Cash flow from operating activities increased by £4m to £5.3m (H1 2017: £1.3m)

· Basic EPS increased 86% to 12.35p (H1 2017: 6.65p), Diluted EPS increased 82% to 12.03p (H1 2017: 6.61p)

· Interim dividend increased 10% to 1.465p per ordinary share (H1 2017: 1.331p)

Operational Highlights

· Very strong demand for Guided Soft Targets

· Demand for Driving Robots also at an all-time high

· Good forward order book, providing visibility into FY2019

· Occupied new state of the art factory and offices at the beginning of the financial year

· Hopeful of receiving the first order for an Advanced Vehicle Dynamic Simulator

· Established AB Dynamics (Europe) GmbH, a new operating entity in Germany

Tony Best, Chairman of AB Dynamics, commented:

"We are pleased to report on an excellent start to the current financial year based on a strong commercial performance. We have built a good forward order book, both for the remainder of 2018 and into next year which gives us confidence in meeting market expectations.

The Group continues to invest in its people, products and facilities, and we now have 130 employees, an increase of 41% over the last year. We continue to evolve our structure to support a large and growing installed base of equipment and systems across the world, whilst also ensuring we carry on delivering the innovative new products and services that our customers expect. During the period, we established a new operating entity in Germany which will provide improved customer support and a local engineering resource.

The Board is pleased to announce the increased dividend to shareholders of 1.465p per ordinary share that is supported by the strength of our business and future prospects."

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Overview of AB Dynamics plc

AB Dynamics is a leading designer, manufacturer and provider of advanced testing and measurement products for vehicle suspension, brakes and steering to the global automotive research and development sector.

The Group is headquartered in Bradford on Avon employing approximately 130 staff. AB Dynamics currently supplies all of the top twenty automotive manufacturers, including Honda, Toyota, Ford and Volkswagen, who routinely use the Group's products to test vehicle safety and dynamics.

Chairman's Statement

We are pleased to report on an excellent result for the first six months of our financial year ended 28 February 2018. A strong commercial performance has resulted in reported revenue growing by 39% to £15.3million (H1 FY2017: £11.0m) and adjusted profit before tax (excluding non-cash share option charges) increasing by 34% to £3.3m (H1 FY2017: £2.46m). Despite a significant increase in administrative expenses £1.98million (H1 2017: £0.9m) largely due to the reversal of FX gains and reclassification of some engineers to administration, the operating margin at 21.5% is comparable to previous years (H1 2017 21.9%). Net cash at the period end was £12.9 million (H1 FY2017: £14.8 million) with the reduction in net cash being predominately due to planned expenditure on our new factory and offices.

The occupation of our new headquarters occurred at the beginning of the current financial year and this allowed more of our employees to be housed in a single location. Following careful planning, this relocation was completed with the minimum of disruption to the business and we had the pleasure of hosting our Annual General Meeting on the 7th December 2017 in our new conference facility.

The Group has established a strong forward order book and there remain good opportunities for future growth. We have therefore retained the use of our factory in Holt Road, which is now predominately an assembly area and machine shop, and we will continue to lease and to occupy the majority of our existing smaller sites nearby in order to meet our expected capacity needs. We have purchased land adjacent to our new facility and outline planning permission has been received for an additional unit of approximately 3,000m2, similar in size to the new headquarters.

The Group is seeing widespread demand for its products and services, most notably for Guided Soft Targets (GST), which are used by the automotive industry to evaluate and test the many developments in Advanced Driver Assistance Systems (ADAS) that are now being considered. The extensive use of the GST has benefited from the approvals obtained from key vehicle safety organisations both in Europe (EuroNCap) and the US (NHTSA) for ADAS testing. Demand for ABD's driving robots has also reached an all-time high.

The Group's future growth continues to be dependent upon the design and development of innovative and sophisticated products that can assist automotive OEMs and test houses in measuring and evaluating new vehicles. The Group continues to invest in and to expand its design and development capabilities to address these needs and a number of exciting new product development programmes are underway. Whilst a number of these developments remain commercially sensitive, we can report that we have made good progress with our Advanced Vehicle Dynamic Simulator, a Driver in Loop Simulator developed in collaboration with Williams Advanced Engineering, where we are now increasingly hopeful of receiving the first order.

The Group continues to evolve its structure and business processes to support a large and growing installed base of equipment and systems, whilst also ensuring that we do not compromise on our ability to deliver new products and services to customers. During the period the Group established a new operating entity in Germany, AB Dynamics (Europe) GmbH, which will provide enhanced levels of customer support and a local engineering capability.

We are pleased to report that the forward order book provides a sales pipeline for the remainder of this financial year and into the next and we look forward to the full year with confidence.

As previously announced, Tim Rogers stepped down as Chief Executive Officer at the end of February 2018. The recruitment process for his successor is well underway and it is hoped to be able to announce his successor in the summer. On behalf of the Board I would like to thank all our employees, now numbering 130, for their hard work during a very busy first half. The contribution of each and every employee is valued and appreciated and our success is due to their continued commitment and enthusiasm.

We are pleased to announce that the Directors are declaring an interim dividend of 1.465p per ordinary share. The ex-dividend date will be 3 May with a record date of 4 May and payment date 18 May 2018.

AB Dynamics plc

Unaudited consolidated statement of comprehensive income

for the six months ended 28 February 2018

AB Dynamics plc

Unaudited consolidated statement of financial position

for the six months ended 28 February 2018

AB Dynamics plc

Unaudited statement of changes in equity

for the six months ended 28 February 2018

AB Dynamics plc

Unaudited cash flow statement

for the six months ended 28 February 2018

AB Dynamics plc

Notes to the unaudited interim report

for the six months ended 28 February 2018

1. Basis of preparation 

The Company is a public limited company limited by shares and incorporated under the UK Companies Act. The Company is domiciled in the United Kingdom and the registered office and principal place of business is Middleton Drive, Bradford on Avon, Wiltshire, BA15 1GB.

The principal activity is the specialised area of design and manufacture of test equipment for vehicle suspension, steering, noise and vibration. The company also offers a range of services which include analysis, design, prototype manufacture, testing and development.

The interim financial information has been prepared in accordance with the basis of the accounting policies set out in the annual report and accounts for the year ended 31 August 2017, which have been prepared in accordance with International Financial Reporting Standards as adopted for use by the European Union. The interim accounts are unaudited and do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.

The same accounting policies, presentation and methods of computation have been followed in this unaudited interim financial information as those which were applied in the preparation of the Group's annual statements for the year ended 31 August 2017, upon which the auditors issued an unqualified opinion, and which have been delivered to the registrar of companies.

The interim financial information has been drawn up using accounting policies and presentation expected to be adopted in the Group's full financial statements for the year ended 31 August 2018. Any new standards that will be adopted in full for the first time in the year-end financial statements did not have a material impact on this interim financial information.

The interim financial information for the six months ended 28 February 2018 was approved by the Board on 23 April 2018.

The Directors are declaring an interim dividend of 1.465p per ordinary share. The ex-dividend date will be 3 May, the record date 4 May and the payment date 18 May 2018.

2. Earnings per share

The calculation of earnings per share is based on the following earnings and number of shares:

3. Analysis of revenue by geographical area and major customers

Revenues attributable to individual foreign countries are as follows:

There were no material non-current assets located outside the United Kingdom.

Revenues are derived from the following: