Trading Update & Notice of Results

RNS Number : 6910G

AB Dynamics PLC

19 March 2020

 

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE EU MARKET ABUSE REGULATION (596/2014). UPON THE PUBLICATION OF THE ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

19 March 2020

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 measurement products to the global automotive and mobility sectors, provides a trading update in advance of the publication of its interim results for the period ended 29 February 2020.

Business performance

Performance for the six months ended 29 February 2020 was ahead of the comparative period and in line with expectations.

Good progress has been made against the Group's strategic priorities, which are focused on broadening and strengthening ABD to ensure it continues to capitalise on the substantial growth opportunities across its end markets. We are pleased with the impact of our investments made across our product capability, infrastructure and routes to market. We are also pleased with the progress of the businesses acquired in 2019 and this, together with the opening of our international sales offices, has resulted in a material increase in the proportion of recurring revenue. We continue to invest in new products and new business systems.

Track Testing performance was ahead of the prior period resulting from growth in Advanced Driver Assistance Systems (ADAS) targets and the acquisition of Dynamic Research, Inc., whilst growth in robot sales slowed, as anticipated. Sales to Asia Pacific and parts of Europe increased, however market conditions in China and Germany continue to be challenging due to macroeconomic factors.

Laboratory Testing and Simulation revenue grew, particularly following the acquisition of rFpro. We are also encouraged by both the short term and longer-term pipeline in this sector, particularly in the field of advanced driving simulators.

COVID-19

The Board is continually monitoring the rapidly changing global situation regarding the COVID-19 pandemic. Although it is difficult to predict its impact at this stage, the Board anticipates that any potential deferred customer order intake and / or supply constraints will likely have an impact on the financial performance in the second half of the year.

We have sufficient inventory levels to support ongoing production and alternative sources of supply for the majority of items that might be affected if the current situation continues into the longer term, absent any additional trade or travel restrictions. Clearly the global impact of COVID-19 is evolving however, we will keep the situation under close review and update investors on any material changes.

Financial position

Our balance sheet remains strong with cash at 29 February 2020 of £35.2 million, underpinning our investment plans. Following a detailed review of inventory, a number of items previously included in the carrying value have been written off. This one-off charge will be excluded from adjusted operating profit.

Outlook

The Board remains alert to the difficulties created by the current global macroeconomic environment and the structural changes in the automotive market. We continue to monitor the rapidly changing global situation regarding the COVID-19 pandemic, which we anticipate will present challenges in the second half of the year due to deferred order intake and the potential for supply constraints.

However, the combination of the Group's strategy, its market-leading position across a number of geographies and regulatory and structural growth drivers means the Board remains confident in ABD's long-term prospects.

Notice of results

AB Dynamics will announce its interim results for the six months ended 29 February 2020 on Wednesday 22 April 2020. 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 [e-mail] or 0207 353 4200.

Enquiries:

AB Dynamics plc	01225 860 200
Tony Best, Chairman
Dr James Routh, Chief Executive Officer
Sarah Matthews-DeMers, Chief Financial Officer
Cairn Financial Advisers (Nomad)	0207 213 0880
Liam Murray Tony Rawlinson Ludovico Lazzaretti
Cantor Fitzgerald Europe (Broker)	0207 894 7000
Phil Davies, David Foreman (Corporate Finance) Caspar Shand Kydd, Keith Dowsing, Arthur Gordon (Equity Sales)
Tulchan Communications	0207 353 4200
James Macey White
Matt Low
Deborah Roney

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 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 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.

Caution regarding forward looking statements

Certain statements in this announcement are forward-looking statements which are based on the Group's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which may use words such as "aim", "anticipate", "believe", "could", "intend", "estimate", "expect" and words of similar meaning, include all matters that are not historical facts. These forward-looking statements involve risks, assumptions and uncertainties that could cause the actual results of operations, financial condition, liquidity and dividend policy and the development of the industries in which the Group's businesses operate to differ materially from the impression created by the forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given those risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by the UK Financial Conduct Authority, the London Stock Exchange or applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

 

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