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1. Company Snapshot

1.a. Company Description

AB Dynamics plc, through its subsidiaries, designs, develops, manufactures, and supplies testing and verification products and services for advanced driver assistance systems (ADAS), autonomous vehicle technology, and vehicle dynamics in the United Kingdom, rest of Europe, North America, the Asia Pacific, and internationally.It offers guided soft target and LaunchPad that uses control software for control and synchronization of multiple test objects, as well as provides test track services.The company also offers laboratory testing and simulation, including Advanced Vehicle Driving Simulator, the Static Simulator, Axle Level NVH, suspension parameter measurement machines (SPMM), and the rFpro physics-based simulation software environment.


Its products are used to evaluate vehicle dynamics, noise, vibration, and harshness and autonomy for a range of applications comprise conventional vehicles, motorsport, and automated/autonomous vehicles.The company was founded in 1982 and is headquartered in Bradford-on-Avon, the United Kingdom.

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1.b. Last Insights on ABDP

AB Dynamics' recent performance has been impacted by concerns over its fair value, estimated to be UK£14.03 based on 2 Stage Free Cash Flow to Equity. The company's valuation appears stretched, potentially limiting near-term upside. Moreover, investors are likely scrutinizing the firm's earnings release, searching for signs of growth deceleration or margin pressure. Any downward revision in guidance or softening demand for its products could exacerbate negative sentiment, prompting investors to reevaluate their positions.

1.c. Company Highlights

2. AB Dynamics' Strong FY '25 Performance Sets Stage for Continued Growth

AB Dynamics plc reported a robust financial performance for the full year 2025, with operating profit growing 15% to GBP 23.3 million and earnings per share increasing 15% to 80.3p. Revenue rose 3% to GBP 114.8 million, despite macroeconomic challenges in the second half. The company's operating margin expanded by 210 basis points to 20.3%, driven by operational improvements and a richer revenue mix. The actual EPS came in at 80.3p, significantly higher than the 23.2p estimate, indicating a strong beat. The reported EPS growth was 15%, with the actual value at '0.803' relative to estimates.

Publication Date: Dec -02

📋 Highlights
  • Operating Profit & EPS Growth:: Operating profit rose 15% to £23.3 million; diluted EPS increased 15% to 80.3p.
  • Revenue Resilience:: Revenue grew 3% despite macroeconomic challenges in H2, with net cash at £41.4 million.
  • Acquisition & Order Book:: Acquired Bolab for £3.9 million; year-end order book reached £32 million, supporting FY ’26 visibility.
  • Margin Expansion:: Operating margin expanded 210 basis points to 20.3%, driven by operational efficiency and revenue mix.
  • Dividend & Growth Ambitions:: Proposed 20% dividend increase; aims to double revenue and triple operating profit via 10% organic growth, margin expansion to 20%+, and £30–50M annual acquisitions.

Acquisition and Order Book

The company acquired Bolab, a niche supplier of electronics testing equipment, for an initial GBP 3.9 million, which is integrating as planned. The order book at year-end was GBP 32 million, providing good visibility into FY '26. This strong order book, combined with encouraging underlying demand drivers, positions the company well for the upcoming fiscal year.

Balance Sheet and Dividend

AB Dynamics has a strong balance sheet with net cash at year-end of GBP 41.4 million and a GBP 20 million RCF facility. The company proposed a 20% increase in dividend, reflecting the Board's confidence in its financial position and prospects. The dividend yield is currently at 0.61%, which is relatively modest.

Growth Strategy and Valuation

AB Dynamics aims to deliver its medium-term growth ambition of doubling revenue and tripling operating profit, driven by 10% organic revenue growth, expanding operating margins to 20% plus, and investment in acquisitions. With a P/E Ratio of 28.82 and an EV/EBITDA of 11.51, the market appears to be pricing in a significant growth premium. The company's ROE is 7.96%, and ROIC is 7.8%, indicating a decent return on equity and invested capital. Analysts estimate next year's revenue growth at 7.5%, which is slightly below the company's long-term growth target.

Outlook and Conclusion

The Board remains confident in making further financial and strategic progress, expecting to deliver FY '26 adjusted operating profit in line with current expectations. Long-term structural and regulatory growth drivers in active safety, autonomous systems, and vehicle applications underpin the medium-term financial objectives. With a strong order book and a solid balance sheet, AB Dynamics is well-positioned to drive growth through a combination of organic investment and strategic acquisitions.

3. NewsRoom

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With 60% institutional ownership, AB Dynamics plc (LON:ABDP) is a favorite amongst the big guns

Dec -04

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Estimating The Fair Value Of AB Dynamics plc (LON:ABDP)

Nov -17

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AB Dynamics plc's (LON:ABDP) Stock Has Shown A Decent Performance: Have Financials A Role To Play?

Jun -30

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AB Dynamics First Half 2025 Earnings: EPS: UK£0.22 (vs UK£0.18 in 1H 2024)

Apr -28

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AB Dynamics (LON:ABDP) shareholders have earned a 19% CAGR over the last three years

Feb -25

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Are AB Dynamics plc's (LON:ABDP) Fundamentals Good Enough to Warrant Buying Given The Stock's Recent Weakness?

Jan -06

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A Look At The Fair Value Of AB Dynamics plc (LON:ABDP)

Dec -17

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With 56% ownership of the shares, AB Dynamics plc (LON:ABDP) is heavily dominated by institutional owners

Sep -01

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.82%)

6. Segments

Track Testing

Expected Growth: 8.5%

AB Dynamics' Track Testing segment growth of 8.5% is driven by increasing adoption of autonomous vehicles, stringent safety regulations, and rising demand for advanced driver-assistance systems (ADAS). Additionally, the company's expansion into new markets, such as Asia, and its investments in R&D are contributing to its growth momentum.

Laboratory Testing and Simulation

Expected Growth: 9.5%

AB Dynamics' Laboratory Testing and Simulation segment growth is driven by increasing demand for autonomous vehicle testing, electrification of vehicles, and stringent safety regulations. Additionally, the company's innovative products and services, such as advanced driver-assistance systems (ADAS) and vehicle-to-everything (V2X) communication testing, are gaining traction, contributing to the 9.5% growth.

7. Detailed Products

Track Testing Systems

AB Dynamics' track testing systems are designed to simulate real-world driving scenarios, allowing for the testing of vehicles and their components in a controlled environment.

ADAS and Autonomous Testing

AB Dynamics' ADAS and autonomous testing solutions provide a range of tools and systems for testing and validating advanced driver-assistance systems (ADAS) and autonomous vehicles.

Suspension Parameter Measurement (SPM)

AB Dynamics' SPM system measures the kinematic and compliance characteristics of a vehicle's suspension, providing valuable data for vehicle dynamics and simulation.

Vehicle Dynamics Testing

AB Dynamics' vehicle dynamics testing solutions provide a range of tools and systems for testing and validating vehicle dynamics, including handling, stability, and ride comfort.

Advanced Simulation Software

AB Dynamics' advanced simulation software provides a range of tools and models for simulating vehicle dynamics, including handling, stability, and ride comfort.

Custom Testing and Engineering Services

AB Dynamics' custom testing and engineering services provide bespoke solutions for testing and validating vehicle systems and components.

8. AB Dynamics plc's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for AB Dynamics plc is moderate, as there are some alternative products and services available in the market, but they are not highly attractive to customers.

Bargaining Power Of Customers

The bargaining power of customers for AB Dynamics plc is low, as the company has a diverse customer base and no single customer accounts for a significant portion of its revenue.

Bargaining Power Of Suppliers

The bargaining power of suppliers for AB Dynamics plc is moderate, as the company relies on a few key suppliers for its components and materials, but it also has some bargaining power due to its size and reputation.

Threat Of New Entrants

The threat of new entrants for AB Dynamics plc is low, as the company operates in a niche market with high barriers to entry, and it would be difficult for new entrants to replicate its technology and expertise.

Intensity Of Rivalry

The intensity of rivalry for AB Dynamics plc is high, as the company operates in a competitive market with several established players, and it needs to continuously innovate and improve its products and services to stay ahead of its competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 1.17%
Debt Cost 8.68%
Equity Weight 98.83%
Equity Cost 8.68%
WACC 8.68%
Leverage 1.18%

11. Quality Control: AB Dynamics plc passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Relais

A-Score: 6.0/10

Value: 5.4

Growth: 8.9

Quality: 4.7

Yield: 5.6

Momentum: 5.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Autoneum

A-Score: 5.7/10

Value: 7.1

Growth: 4.4

Quality: 4.4

Yield: 2.5

Momentum: 8.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
AB Dynamics

A-Score: 5.1/10

Value: 3.5

Growth: 8.0

Quality: 7.0

Yield: 5.0

Momentum: 0.5

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Inter Cars

A-Score: 5.0/10

Value: 6.1

Growth: 7.7

Quality: 3.8

Yield: 0.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Bertrandt

A-Score: 4.3/10

Value: 9.8

Growth: 2.6

Quality: 5.3

Yield: 2.5

Momentum: 3.0

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
TI Fluid Systems

A-Score: 4.0/10

Value: 5.9

Growth: 4.0

Quality: 2.2

Yield: 1.2

Momentum: 6.0

Volatility: 4.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

12.85$

Current Price

12.85$

Potential

-0.00%

Expected Cash-Flows