AB Dynamics (ABDP) H1 2026 earnings summary

Executive summary

• Revenue for H1 FY 2026 declined 16% year-over-year to £48.8m due to prior order delays, global tariff disruptions, and weaker volumes in China, but order intake rebounded to £64m, with a closing order book of £47m covering 70% of expected full-year revenue.

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

• A £16.8m non-cash impairment and exceptional charge was recorded for the Chinese testing services business, VadoTech, due to weaker volumes and challenging local market conditions, resulting in a statutory operating loss.

• Interim dividend increased by 10% to 3.08p, reflecting strong cash generation and financial confidence.

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

Financial highlights

• H1 FY 2026 revenue was £48.8m (down 16% YoY); adjusted operating profit was £9.1m (down 16% YoY); adjusted diluted EPS was 31.3p (down 15% YoY); statutory diluted EPS was a loss of 53.0p.

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

• Cash conversion at 102% on a rolling 12-month basis; net cash balance of £39.3m at period end.

• Interim dividend up 10% to 3.08p; return on capital employed increased to 21%.

Outlook and guidance

• Adjusted operating profit for FY 2026 expected to be in line with analyst consensus of £24.4m, with 55%-60% of revenue and profit weighted to H2.

• Order book of £47m, with £29m for H2 delivery, provides strong visibility for the remainder of the year.

• Medium-term ambition remains to double revenue and triple operating profit from the FY 2024 baseline, targeting >20% operating margin and 10% average organic growth.

• Long-term growth supported by structural and regulatory drivers in automotive safety, automation, and simulation.