TIDMABDP
RNS Number : 0589A
AB Dynamics PLC
21 September 2022
21 September 2022
AB Dynamics plc
("AB Dynamics", the "Company" or the "Group")
Pre-Close Trading Update
Acquisition of Ansible Motion Limited
AB Dynamics (AIM: ABDP), the designer, manufacturer and supplier
of advanced testing, simulation and measurement products to the
global transport market, is pleased to issue the following trading
update and the announcement of an acquisition in advance of the
publication of its preliminary results for the year ended 31 August
2022 ("FY22").
Trading Update
The Group performed strongly during the second half of the year,
managing continued supply chain disruption effectively to deliver
strong organic growth and another record half year period for
sales. As a result, the Board expects to report revenue for FY22 of
approximately GBP80m, representing year on year growth of
approximately 22%. With robust margin performance through the
second half, full year adjusted operating profit is also
anticipated to be ahead of current market expectations.
The track testing sector delivered particularly strong growth
throughout FY22, with good growth across all primary product lines.
The laboratory testing and simulation sector showed more modest
sales growth, predominantly due to timing on larger contracts.
The Group maintained its track record of strong operating cash
conversion, with net cash at 31 August 2022 of GBP29.0m (2021:
GBP22.3m), after capex investment of GBP4m.
Despite the significant sales growth throughout the year, order
intake continued to be strong and resulted in another period of
positive book to bill ratio. Whilst mindful of continued
uncertainty in the wider economic backdrop, this provides good
momentum as the business enters FY23.
Acquisition of Ansible Motion Limited
The Group has completed the acquisition of Ansible Motion
Limited ("Ansible Motion") for an initial consideration of GBP19.2m
(the "Acquisition").
Ansible Motion is a leading provider of advanced simulators to
the global automotive market. Ansible Motion's products are used
for a wide range of applications including evaluation of Advanced
Driver Assistance Systems ("ADAS"), autonomy, vehicle dynamics,
powertrain development and motorsport.
Founded in 2009 and headquartered in Norfolk, Ansible Motion has
been a long-standing partner of rFpro, which was acquired by AB
Dynamics in 2019. The Ansible Motion product range complements the
existing AB Dynamics range of driving simulation products, building
out the family of products to enable access to a wider range of
customers and applications.
The Acquisition supports a number of the Group's stated
strategic priorities including:
-- Expanding the Group's product range in the simulation market
and achieving critical mass in the simulation business unit;
-- Enhancing the Group's capabilities in the field of simulation
R&D through a talented team of engineers and increasing the
capacity of the business through an additional product development
and manufacturing facility in the UK; and
-- Synergistic benefits of shared services and access to the
existing AB Dynamics channels to market
Financial Considerations
The maximum consideration payable for Ansible is GBP31.2m,
comprising an initial cash consideration of GBP16.0m and GBP3.2m of
new ordinary shares in AB Dynamics issued to the vendors. The
Acquisition has been completed on a cash free, debt free basis with
the initial cash consideration funded from the Group's existing
cash resources and short-term utilisation of part of the Group's
revolving credit facility. Conditional consideration of up to
GBP12.0m will be payable in cash subject to meeting certain
performance criteria for the year ending 31 August 2023.
Ansible Motion has a strong record of profitable, and cash
generative growth. Based on unaudited accounts, in the year ended
31 March 2022 Ansible Motion generated revenue of GBP8.0m (2021:
GBP5.4m), earnings before interest, tax, depreciation and
amortisation ('EBITDA') of GBP1.9m (2021: GBP0.8m) and operating
profit of GBP1.8m (2021: GBP0.7m). Net assets at 31 March 2022 were
GBP4.1m.
The Board expects that the Acquisition will be earnings
enhancing in FY23 with revenues forecast to be approximately
GBP12.0m, based on the existing orderbook and strong order
pipeline, and adjusted operating profit of approximately GBP2.2m.
Should this forecast be achieved, the conditional cash payment
would be estimated at GBP1.3m.
Ansible Motion is being acquired from its three shareholders, Mr
Kia Cammaerts, Mr Jonathan Walker and Mr Robert Stevens, with Mr
Cammaerts and Mr Stevens remaining in the business as Managing
Director and Chief Engineer respectively.
Dr James Routh, Chief Executive Officer, said:
"I am very pleased to be able to provide a positive trading
update ahead of the publication of our full year results. The
business has performed strongly against a backdrop of continued
challenging market conditions and demonstrates the resilience of
our business model.
The acquisition of Ansible Motion is another important milestone
in our ongoing strategic development and supports the Group's
strategic initiatives by broadening the scope of the Group's
product offering, strengthens our position in the strategically
important global simulation market, and enhances our capabilities
in R&D and manufacturing.
Ansible Motion is a business we have known for a long time, and
has an outstanding reputation for providing customer focussed
driving simulation solutions and, coupled with our existing
simulator business and our world class simulation software rFpro,
this acquisition positions us as a market leader with genuine scale
to drive significant continued growth in the simulation sector.
The existing order book and strong market presence of Ansible
Motion, along with our established international sales channels
provides us with an outstanding platform for growth and we are very
pleased to welcome Kia, Robert and each of Ansible's 38 employees
to AB Dynamics."
More information on Ansible Motion can be found on its website
at www.ansiblemotion.com
Notice of results
The Group will announce its results for the year ended 31 August
2022 on Wednesday 23 November 2022. 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.
Issue of Equity and Total Voting Rights
Pursuant to the acquisition of Ansible Motion, application has
been made to London Stock Exchange for 258,795 consideration shares
to be admitted to trading on AIM and it is expected that Admission
will become effective, and that trading will commence at 08.00 a.m.
on 26 September 2022 ("Admission").
Following Admission, and in accordance with the Financial
Conduct Authority's Disclosure Guidance and Transparency Rules
("DTRs"), the Company's total issued share capital will consist of
22,885,261 ordinary shares of 1 penny each ("Ordinary Shares") with
one voting right per Ordinary Share. The Company does not hold any
Ordinary Shares in Treasury. Shareholders may therefore use this
figure as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a
change to their interest in the Company, under the DTRs.
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) ("MAR") prior to its release as part
of this announcement and is disclosed in accordance with the
Company's obligations under Article 17 of those Regulations.
The person responsible for arranging the release of this
information is David Forbes, Company Secretary.
Enquiries :
AB Dynamics plc 01225 860 200
Dr James Routh, Chief Executive Officer
Sarah Matthews-DeMers, Chief Financial Officer
Peel Hunt LLP 0207 894 7000
Mike Bell
Ed Allsopp
Tulchan Communications 0207 353 4200
James Macey White
Matt Low
Laura Marshall
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END
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