AB Dynamics Shares Gain: Posts Strong FY25 Results, Outlook Remains Positive

AB Dynamics plc (LON: ABDP) has released its final results for the year ended August 31, 2025, showcasing robust financial performance and strategic progress.

The advanced testing and simulation provider reported increases in revenue, profitability, and shareholder returns, signaling a strong start to its medium-term growth plan.

Headline Numbers:

• Revenue: £114.7m (+3% year-over-year)
• Adjusted Operating Profit: £23.3m (+15% year-over-year)
• Adjusted Diluted Earnings Per Share: 80.3p (+15% year-over-year)
• Total Dividend Per Share: 9.16p (+20% year-over-year)

The company's adjusted operating profit and earnings per share exceeded expectations, driven by effective strategic execution despite a mixed market environment.

Revenue growth was primarily fueled by a strong first half, although simulator order timing faced headwinds in the second half due to macroeconomic disruptions. Recurring revenue remained steady at 45% of total revenue.

Improved operational efficiency and a favorable revenue mix led to an operating margin increase of 210 basis points, reaching 20.3%. While operational improvements are expected to be sustained, the revenue mix benefit is not anticipated to recur in FY26.

Strong operating cash generation of £29.4m resulted in a healthy net cash position of £41.4m at year-end, after investments in acquisitions and capital expenditures.

The company's commitment to shareholder value is evident in the proposed final dividend of 6.36p per share, bringing the total dividend for the year to 9.16p per share, a 20% increase. This reflects the Board's confidence in the Group's financial strength and future prospects.

Driver Breakdown:

• New Product Development: Continued investment in testing and simulation products, including the Delta S3 Spin Simulator and ClearTrackTM object detection system.
• Strategic Acquisitions: Successful integration of Bolab Systems GmbH, a power electronics testing solutions provider.
• Medium-Term Growth Plan: Strong initial progress towards achieving average organic growth of 10% per annum, margin expansion, and strong cash generation.

CEO designate Sarah Matthews-DeMers stated, “The Group has made a strong start to delivering the medium-term growth plan which was set out in November 2024.”

“Encouragingly, underlying demand drivers remain strong and customer activity increased towards the end of the year.”

Looking ahead, AB Dynamics expects adjusted operating profit for FY26 to be in line with current expectations, with a bias towards the second half of the year. The company's year-end order book of £32m, plus post year-end order intake, provides good visibility into FY26.

The company's resilience against short-term automotive industry headwinds is supported by its OEM and powertrain agnostic approach, as well as its geographical diversification. Long-term growth drivers in active safety, autonomous systems, and vehicle automation underpin the Group's medium-term financial objectives.