The AB Dynamics plc Board has declared an interim dividend of 2.33p per ordinary share (H1 2023: 1.94p) which will be paid on 17 May 2024 to shareholders on the register on 3 May 2024.
A final dividend of 4.42p per share was paid on 6 March 2024 in respect of the year ended 31 August 2023 totalling £1,014,000. The Board recognises that dividends continue to be an important component of total shareholder returns, balanced against maintaining a strong financial position and intends to pursue a sustainable and growing dividend policy in the future having regard to the development of the Group.
Other financial highlights include:
Strong growth in revenue and operating profit, delivered alongside an improved operating margin which reflected operating leverage, gross margin gains and improved efficiency
Market and customer demand levels have remained positive throughout H1, with strong activity across all three sectors and all regions
Revenue increased by 8% against H1 2023, or 10% on a constant currency basis, with good growth in testing products and testing services offset in part by a reduction in simulator revenue, where significant contracts are H2-weighted
o Testing products revenue grew by 12% driven by an increase in ADAS platforms
o Testing services revenue grew by 23% led by strong performances in both the US and Asia, albeit against a weak comparative which was impacted by Chinese lockdowns
o Simulation revenue was down 13% as a result of the timing of revenue recognition, with several contracts due for delivery in H2
The strong growth in testing services has increased the proportion of recurring and service-based sales to 52% (H1 2023: 41%) for the Period
The Group has remained effective in mitigating inflationary cost pressures, with gross margins improving to 58.3% (H1 2023: 57.4%)
Operating margin improved by 110bps to 17.0% as a result of the increased levels of activity and the benefits of enhanced performance initiatives, partially offset by the investment in ABD Solutions to support the strategic long-term growth drivers
o Excluding ABD Solutions, the Group operating margin increased to 18.6% (H1 2023: 17.9%)
Significant operating cash generation of £11.3m (H1 2023: £9.5m) with cash conversion of 107% (H1 2023: 100%), resulting in net cash at the period end of £29.1m (28 February 2023: £21.3m, 31 August 2023: £32.0m) after funding the final performance payment of £5.7m for the acquisition of Ansible Motion
