TIDMABDP
RNS Number : 1951N
AB Dynamics PLC
28 September 2021
28 September 2021
AB Dynamics plc
("AB Dynamics" or "ABD" or the "Group")
Pre-close Trading Update
Launch of ABD Solutions
AB Dynamics plc (AIM: ABDP), the provider of advanced testing
systems, simulation products and testing services to the global
automotive and mobility sectors, provides the following trading
update and details of the launch of ABD Solutions in advance of the
publication of its results for the year ended 31 August 2021
("FY21").
Business performance
The Group performed well during the second half of the year,
managing supply chain disruption and currency headwinds effectively
in order to meet the strengthening in demand during the period.
Revenue for the second half of the year was approximately 20%
higher organically than the COVID-impacted H2 2020 and
approximately 40% higher on a reported basis, including the
contribution from Vadotech Group ("Vadotech") which was acquired in
March 2021.
As a result, the Board expects to report revenue for FY21 of
ca.GBP65m. With the business responding well to the continued
recovery, reflecting the impact of the strategic enhancement
initiatives implemented in the last 18 months, the Board
anticipates that the Group will deliver full year adjusted
operating profit for FY21 in line with current consensus
expectations.
The Group delivered strong operating cash inflow through the
second half, with net cash at 31 August 2021 of GBP22.3m (2020:
GBP30.0m), after investing EUR20.0m (GBP17.3m) in the acquisition
of Vadotech and continued capital investment in new product
development, the new Engineering Design Centre, ERP software and
expansion of the track testing facility in California, totalling
GBP8.2m in the year.
Further progress continues to be made on implementation of
management's strategic initiatives to enhance commercial and
operational capability and provide AB Dynamics with a platform for
sustainable long-term growth. Regional leadership teams have now
been established to cover core overseas markets with the
appointment of a President and CFO for the Asia Pacific region as
well as President for the North America region. The Board is
pleased with the performance of Vadotech, with the business
performing in line with expectations at the time of
acquisition.
Notwithstanding a challenging backdrop generally, the Group has
seen a continued recovery in demand through the second half across
all key product and service lines, which demonstrates the
resilience of ABD's markets. Despite the significant uplift in
sales during the second half, orders exceeded revenues in the
period and the business enters FY22 with good momentum.
Launch of ABD Solutions
Alongside the implementation of specific initiatives to improve
and enhance business performance, the Board has undertaken an
extensive exercise to identify routes to extend the Group's
potential to leverage its market-leading capabilities into new,
long-term growth opportunities. The successful acquisitions of
rFrpo, DRI and Vadotech, together with continued internal
development work, have significantly extended the Group's
geographical reach and offering across product, service and
software capabilities. In light of this, the Board is seeking to
capture greater value from the depth of the Group's expertise in
its core capabilities of integrated automation and simulation.
In line with this strategy, AB Dynamics is pleased to announce
the launch of ABD Solutions ( www.abdsolutions.com ), a new
business unit focused on providing retrofit solutions that enable
the automation of conventional off-road vehicle fleets rapidly and
cost effectively.
ABD Solutions leverages and builds on the core capabilities of
AB Dynamics in driving robotics, positioning and control to rapidly
convert vehicle applications where safety and/or efficiency is the
primary market driver. ABD Solutions will focus on four core market
sectors, for which conversion kits are already in development;
-- Mining;
-- Defence;
-- Agriculture; and
-- Material handling.
The formation of ABD Solutions and the identification of the
four core market sectors is based on extensive market analysis and
research which shows a total potential market of approximately
GBP4.8bn, with an estimated compound annual growth rate of
approximately 25%, of which the Group will be targeting specific
segments. Each individual market sector has specific market
drivers; however, the common elements are the need for improved
operational safety and productivity. This greatly expands the
existing addressable market of the Group and has the potential to
diversify the business significantly beyond its core automotive
focus.
The ABD Solutions team consists of talented employees from both
AB Dynamics and new external hires with expertise in localisation,
positioning, object detection and artificial intelligence. The new
business has already identified several large-scale development
opportunities in both the UK and Asia Pacific and more details of
the relevant markets and applications will be provided at the full
year results. The investment required during 2022 is expected to
total approximately GBP1.0m - GBP1.5m, with modest revenues
commencing in 2023, and significant incremental growth
opportunities thereafter.
Notice of results
The Group will announce its results for the year ended 31 August
2021 on Wednesday 24 November 2021. 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.
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.
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
The person responsible for arranging the release of this
information is Felicity Jackson, Company Secretary.
About AB Dynamics plc
AB Dynamics is a leading designer, manufacturer and provider of
advanced testing systems, simulation products and testing services
to the global automotive research and development and mobility
sectors.
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.
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END
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