AB Dynamics PLC - Trading Update & Notice of Results
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
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
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.
The Group has been able to maintain its very strong financial position through the second half, with cash at
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
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.
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
Notice of results
The Group will announce its results for the year ended
AB Dynamics plc
01225 860 200
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Peel Hunt LLP
0207 418 8900
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0207 353 4200
The person responsible for arranging the release of this information is
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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
Quick facts: AB Dynamics PLC
Market Cap: £488.78 m
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