AB Dynamics full-year profit and revenue fall in challenging market

AB Dynamics PLC on Tuesday said it plans to invest surplus margin to grow the business as it highlighted a "very challenging market backdrop."

Shares in the firm fell 7.0% to 739.00 pence each in London on Tuesday afternoon.

The Wiltshire, England-based supplier of advanced testing, simulation and measurement products said pretax profit fell to £9.8 million in the financial year ended August 31 from £15.7 million the year prior.

Revenue declined 12% to £91.6 million from £104.2 million with the beginning of the year affected by disruption from tariffs and the second half impacted by geopolitical events together with challenging automotive market conditions, particularly in Europe.

AB Dynamics said results are in line with guidance communicated in July, delivering a "resilient performance against a very challenging market backdrop."

AB Dynamics said its new executive team has concluded that to capitalise on market opportunities, increased investment is needed in innovation and product development, together with sales, marketing and routes to market.

In order to support these growth initiatives, the firm will seek to maintain margins at 20% and reinvest surplus margin into these areas to drive medium-term revenue growth, it said.

Adjusted operating margin in the financial year just ended was 20%, down from 21.4% the year prior.

The firm said it has continued to build its acquisition pipeline, targeting high growth technology-enabled businesses, to accelerate strategic progress.

The company proposed a final dividend of 7.00p per share, bringing the total dividend for the year to 10.08p per share, up 10% on-year from 9.16p.

Looking ahead, the firm expects adjusted operating profit to be in line with current expectations of £19.7 million.

Adjusted operating profit in the financial year just ended was £18.3 million, down from £22.3 million the year prior.

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