Ab Dynamics Share Discussion Threads

[piedro] 27/5/2020 08:28

AB Dynamics launches specialised testing division as the trend towards increasingly complex vehicle testing grows

[albie two shoes] 30/4/2020 11:06

It looks like we have come through the dip with ABDP and the half year report is now well and truly in the price. As a long term holder for a number of years I took the opportunity over the last month to double my holding in stages. Hopefully it doesn’t come back to bite me, but I am very optimistic for the future. Hope you are all safe and well.
A2S

[patient fox] 22/4/2020 21:07

priscilla31 = "top aim stocks" moron from twitter

[patient fox] 22/4/2020 17:20

AB Dynamics: long-term appeal remains undiminished
AB Dynamics (LON: ABDP), the specialist provider of advanced testing systems and measurement products to the global automotive sector, announced excellent interim results for the six-months to 29 February 2020.

Founded in 1982 as a vehicle engineering consultancy, the group arrived on AIM in 2013 at a share price of 86p and market capitalisation of only £14m. Despite recent steep falls, the shares are still up over 1600% since IPO and the business looks in great shape with plenty of cash and a new manufacturing facility to support its growth.

Group revenues in the six-month period increased 34% to £34.7m or 11% excluding the contribution from acquisitions. The Track Testing sector contributed the majority rising 29% to £29.6m with sales of their Advanced Driver Assistance System test products increasing 44% to £12.7m. It is well placed to benefit as the testing of active safety systems continue to evolve, with automotive manufacturers required by regulation to ensure that new vehicles have suitable active safety and driver assistance systems to minimise the risk of accidents and injuries.

The Laboratory Testing & Simulation sector increased revenues 82% to £5.1m driven by growth in Suspension Parameter Measurement Machine sales with simulation also contributing following the acquisition of rFpro earlier in the year.

The proportion of recurring revenue rose from 10% to 25% of total sales offering a greater degree of visibility than ever before.

Adjusted profit before tax increased by 36% to £8.7m. On a statutory basis, profit before tax was £3.7m (2019: £6.3m) after significant amortisation and inventory write-offs.

Cash inflow from operations was a somewhat disappointing £3.3m due to an increase in trade receivables from two OEMs. Thankfully, outstanding balances were received after the period end. Cash at 29 February 2019 was a reassuring £35.1m but, as with many, the group has prudently concluded to postpone the payment of an interim dividend and review matters at the year end.

Whilst it has not seen a material reduction in order intake during March and into April, there has been some deferment of orders, particularly when related to higher value capital equipment. The is likely to be an impact on order intake in the second half of the year with the short-term outlook extremely uncertain.

The shares remain 50% off the highs of November 2019 and now trade at 27x reported adjusted earnings for year ending August 2019. The long-term outlook remains extremely positive and the business looks far better structured than ever before.

[tim1478] 22/4/2020 12:48

Thank you Effortless

[effortless cool] 22/4/2020 12:27

Amortisation of purchased intangibles and a sizeable inventory write-off.

The first is not a concern and should be adjusted out of any valuation analysis.

The second is only a concern if it indicative of further underlying accounting issues, the type of which we have seen all too much of in other quoted businesses in recent years. As it stands, I am not too worried about it. The fact that it comes in the unaudited interims means that it has not been mandated by the auditors, but is likely part of a 'new broom' exercise by the recently appointed CFO. There is nothing in the report indicating any deeper problems, and this seems to be just a one-off fix.

[tim1478] 22/4/2020 12:04

Hi. Why did the operating profit and basic earnings per share fall so much? Is this a concern?

[johndoe23] 22/4/2020 09:30

Yeah couldn't get a quote to buy at 1200-1250p. Missed opportunity ?

[sandmarr] 22/4/2020 09:23

Looking like a bit of a tree shake this morning.....no online quote to buy for a spell, but easy enough to sell. Price now recovering.

[patient fox] 22/4/2020 09:06

cheapest I paid was £9.80 just added under £13, hell of a lot cheaper than the oversubscribed £22 placing the institutions paid.would of thought funds would be adding at this price.

[alter ego] 22/4/2020 08:45

Agree and not the sort of basket case that needs rescue by a bigger player.

[adamb1978] 22/4/2020 08:42

Just been through the results. Reported bottom line has been clouded by certain exceptionals and the amort of acquired intangibles.

Looking at clean EPS, earnings are around 31p EPS in H1 and based on my figures and factoring a subdued H2, I get to 53p EPS for the year growing to 74p year to Aug-21 and 99p to year to Aug-22.

I therefore have it on around 18x PE for Aug-21, and if you adjust for the cash pile, you lower than to 16x.

Given the growth, thats good value in my view

[patient fox] 22/4/2020 08:02

Yes many great uk companies have been bought out by other countries firms.look at the car industry the only UK owned company is Morgan and they only produce around 750 cars a year with a two year waiting list.This stock seems to be a winner but will the board hold out if a giant comes in with a bid.

[adamb1978] 22/4/2020 07:41

Agreed patient fox. Particularly pleased with the increase in recurring revenue from 10% to 25% - I hadn’t appreciated the increase would be so stark. I think this is a very good long-term hold, though whether they get the chance to execute that as an independent company, I have my doubts. From a UK perspective, it would be great if they can and from a shareholder perspective, I guess I’m ambivalent as long as the price is right

[patient fox] 22/4/2020 07:32

Just read the report,very strong results operating as normal but some larger cost orders defured.seem to be riding the covid peak very well.strong balance sheet,new products been welcomed by the market,reoccurring revenues in a long term growth market.I will be adding at this price.

[sahara5] 08/4/2020 23:03

Stifel upgraded the shares yesterday from hold to buy which is (probably partly) why they were up so much.

[adamb1978] 07/4/2020 16:08

ali47fish

You're probably right, but I generally don't 'trade' - I typically hold for a couple years at least in my ISA and much, much longer in my pension. I think this company could easily go up 2x -3x from here over 3-5 years so not bothered with any short-term fluctuations

[paulisi] 07/4/2020 16:00

The markets are up 5%, but this share is up 20%.I thought there may be something I'm missing other than bulls thinking they have found the bottom.Expect some profit taking from institutions before Easter.

[ali47fish] 07/4/2020 14:59

Adam-i wonder if it makes sense to play it the other way - to take todays profit and then add later on when it is much lower

[saab9] 07/4/2020 13:51

Well abdp said any effect from corona would be shown in next report anyway, not this one. I guess it could be true for other companies too.

[adamb1978] 07/4/2020 13:38

Yes, everything buoyant for the last couple days. Personally I think its a mugs game buying in at these levels given we've moving into reporting season which is going to be carnage.

It feels to me like the 12 year bull market which we've had has lulled people into thinking that shares only go up, and actually with the length of the cycle there will be a lot of investors who have only seen share prices go up.

I think markets will be 10% lower in the next couple months so not buying at more at these levels

[saab9] 07/4/2020 10:48

Jumps everywhere. Think there's news of the Corona curve flattening

[paulisi] 07/4/2020 10:37

Big jump this morning - any reasons?