AB Dynamics (ABDP) H1 2026 Pre Recorded earnings summary

Executive summary

• H1 2026 revenue declined 16% year-over-year to £48.8m due to prior order delays and weaker Chinese volumes, but order intake rebounded to £64m, signaling recovering customer activity.

• Operating margin was maintained at 18.6% despite lower volumes, supported by operational improvements and cost controls.

• CEO transition brought renewed focus on innovation, operational excellence, and a strategic review of underperforming assets, notably VadoTech.

• The group remains committed to its medium-term strategy to double revenue and triple operating profit from the FY 2024 baseline, targeting >20% operating margin.

• A 10% increase in the interim dividend reflects confidence in the financial position and ongoing investment.

Financial highlights

• Adjusted operating profit fell 16% to £9.1m; adjusted diluted EPS down 15% to 31.3p.

• Gross margin improved by 350bps to 63.7% due to operational improvements and positive revenue mix.

• Net cash at period end was £39.3m, with strong cash conversion at 102% on a rolling 12-month basis.

• Interim dividend raised to 3.08p per share, up 10% year-over-year.

• Order book rose to £47m, covering about 70% of expected FY 2026 revenue.

Outlook and guidance

• Adjusted operating profit for FY 2026 expected to be in line with market expectations, with 55-60% revenue bias to H2.

• Medium-term targets: 10% organic revenue CAGR, >20% adjusted operating margin, and 100% cash conversion through the cycle.

• Growth prospects supported by regulatory and structural drivers, especially in APAC and simulation adoption.

• Management remains confident despite geopolitical uncertainties, citing strong pricing power and operational agility.