AB Dynamics FY revenue, adj profit fall less than expected in tough auto market

Overview

• UK automotive testing equipment maker's yearly revenue fell 12%, but beat analyst expectations

• Adjusted operating profit for the year declined 18%, but beat analyst expectations

• Company maintained adjusted operating margin at 20% through operational improvements and cost actions

Outlook

• Company expects FY 2027 adjusted operating profit to be in line with current expectations

• Board notes ongoing geopolitical and macroeconomic disruption, with automotive headwinds persisting in Europe

• Year-end order book of £31m provides visibility into FY 2027

Result Drivers

• TARIFFS AND GEOPOLITICAL DISRUPTION - Co said revenue was hit by disruption from tariffs at the start of the year and by geopolitical events and challenging automotive market conditions, especially in Europe, in the second half

• OPERATIONAL IMPROVEMENTS AND COST ACTIONS - Co said margin was maintained at 20% due to operational improvements and early cost mitigation actions

• SEGMENT PERFORMANCE - Testing Products revenue fell 21% due to market disruption and lack of repeat large order; Simulation revenue rose 10% on hardware and software demand; Testing Services revenue grew 13% driven by mileage accumulation testing

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the auto, truck & motorcycle parts peer group is "buy"

• Wall Street's median 12-month price target for Ab Dynamics PLC is GBp1,325.00, about 66.7% above its November 9 closing price of GBp795.00

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 11 three months ago

Reuters Recommended Reads

• Nov 9 - Honda to build new $3 billion auto plant in Ohio, adding 2,000 jobs

• Nov 9 - NHTSA opens probe into 1.2 million Ford vehicles over airbag deployment

• Nov 9 - Britain expected to cut 2030 EV sales target to 60%, Guardian says

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)