REG - AB Dynamics PLC - Half-year Report
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RNS Number : 2754A AB Dynamics PLC 14 April 2026
14 April 2026
AB Dynamics plc
Unaudited interim results for the six months ended 28 February 2026
"Structural market drivers intact, underpinning medium term growth
opportunity"
AB Dynamics plc (AIM: ABDP, the 'Company', or the 'Group'), the designer,
manufacturer and supplier of advanced testing, simulation and measurement
products and services to the global transport market, is pleased to announce
its interim results for the six-month period to 28 February 2026 (the
'Period').
H1 2026 H1 2025
£m £m
Revenue 48.8 58.0 -16%
Gross margin 63.7% 60.2% +350bps
Adjusted EBITDA(1) 11.3 12.9 -12%
Adjusted operating profit(1) 9.1 10.8 -16%
Adjusted operating margin(1) 18.6% 18.6%
Statutory operating (loss)/profit (12.1) 6.7
Adjusted cash flow from operations(1) 6.5 9.3
Net cash 39.3 27.2
Pence Pence
Adjusted diluted earnings per share(1) 31.3 37.0 -15%
Statutory diluted (loss)/earnings per share (53.0) 21.9
Interim dividend per share 3.08 2.80 +10%
(1)Before amortisation of acquired intangibles, acquisition related charges,
and exceptional items. A reconciliation to statutory measures is given in note
3 of the interim report.
Financial highlights
· H1 performance reflects previously guided second half bias for FY
2026, with full year adjusted operating profit expected to be in line with
current market expectations(2)
· Order intake was £64m (H1 2025: £66m, FY 2025: £110m) with
market and customer activity returning to more positive levels following a
subdued third quarter of FY 2025 which had been impacted by disruption from
tariffs
· Revenue decreased by 16% reflecting the previously communicated
delays in the timing of order intake and customer delivery requirements,
together with the weaker than anticipated volumes at our VadoTech Testing
Services business in China
· Operating margin maintained at 18.6%, as the negative impact of
operational gearing was offset by a combination of the full year effect of
operational improvements, management implemented cost mitigation actions and
positive revenue mix
· Adjusted diluted EPS was down 15% to 31.3p (H1 2025: 37.0p)
driven by the decrease in operating profit, with the tax rate in line with the
prior year at 20%
· Net cash at period end was £39.3m (H1 2025: £27.2m, FY 2025:
£41.4m). Rolling 12-month cash conversion was 102%, demonstrating continued
strong working capital discipline
· Interim dividend of 3.08p per share (H1 2025: 2.80p per share),
an increase of 10%, reflecting the Board's confidence in the Group's financial
position and prospects
Operational and strategic highlights
· In response to the lower than anticipated customer activity in
the VadoTech Testing Services business, the Group will undertake a strategic
review of this business (on-road testing in China on behalf of a European OEM)
during the second half of the year. The Group has recorded exceptional items
totalling £16.8m in relation to VadoTech, the majority of which is a non-cash
impairment charge
· Internal focus on innovation has been enhanced with a view to
building on the Group's strong record and driving the next generation of new
product development
· The technology roadmap for Testing Products is aligned to the
regulatory and consumer ratings changes scheduled for the next five years to
enable our customers to remain at the forefront of ADAS development
· In the Simulation market our newly launched Delta S3 Spin
simulator received its first order late in FY 2025 and further orders in FY
2026 demonstrating the value of the investment made in this area
· The Group set out its medium-term growth aspiration in November
2024 and remains committed to delivering those ambitions, viewing the events
of the last 12 months very much as a short-term timing difference as opposed
to any fundamental change in structural growth drivers within our core
sectors. In summary the medium-term ambitions are:
o Average organic growth of 10% per year across core markets, supported by
regulatory tailwinds and rapid technology change, with a significantly
strengthened and scalable operational and commercial platform
o Further margin expansion to greater than 20% through operational gearing,
supply chain improvements and operational efficiencies
o Strong cash generation that provides scope for further value-enhancing
investment
Current trading and outlook
· The Group is OEM and powertrain agnostic, selling into R&D
and testing services functions globally, providing resilience against
short-term automotive industry headwinds
· The Group is geographically diversified and supplies
market-leading products which are critical to our customers' future success
· Period end order book of £47m (H1 2025: £42m), which in
addition to revenue already delivered in the first half gives circa 70%
coverage of expected full year revenue, providing good visibility for the rest
of FY 2026
· We note the emerging situation in the Middle East and whilst the
Group has no operating footprint in the region, we continue to monitor any
potential impacts from broader risks to trade, cost inflation and supply
chain disruption. The Group has strong pricing power and a proven, agile
approach to managing the business through changing conditions and so we remain
confident in delivering on our key strategic and operational priorities
· Whilst we are mindful of the current geopolitical uncertainty,
absent an extended disruption, the Board expects adjusted operating profit for
FY 2026 to be in line with current expectations(2) with an expected 55-60%
revenue bias towards the second half of the year
· Future growth prospects remain supported by long-term structural
and regulatory growth drivers in active safety, autonomous systems and the
automation of vehicle applications, underpinning the Group's medium-term
financial objectives
There will be a presentation for analysts this morning at 9.00am at Stifel
offices, 150 Cheapside, London EC2V 6ET. Please contact abdynamics@teneo.com
if you would like to attend.
A presentation will also be provided on the Investor Meet Company platform on
15 April 2026 at 9.00am. Anyone wishing to attend should register their
interest
via https://www.investormeetcompany.com/ab-dynamics-plc/register-investor
(https://www.investormeetcompany.com/ab-dynamics-plc/register-investor) .
Commenting on the results, Sarah Matthews-DeMers, Chief Executive Officer
said:
"The Group has undergone significant technological, operational and commercial
development over the last five years, enhancing a platform which today is
backed by great people, great products and a great market position. The
long-term growth opportunity for AB Dynamics remains compelling and our
strategy is unchanged; going forward we expect evolution not revolution with
an enhanced focus on innovation, excellence and continuous improvement.
"As part of our consistent focus on value creation, we have taken early action
in respect of VadoTech in China, where the service provided became
commoditised and the customer experienced challenging local market conditions.
"As expected, revenue in H1 reflected the dip in order intake in Q3 of last
year following disruption from tariffs, and it is pleasing to see order intake
recovering to more normal levels. Order coverage and our confidence in
operational execution leaves us well positioned to deliver in the second half
of the year.
"We note the emerging situation in the Middle East and whilst the Group has no
operating footprint in the region, we continue to monitor any potential
impacts from broader risks to trade, cost inflation and supply chain
disruption. The Group has strong pricing power and a proven, agile approach to
managing the business through changing conditions and so we remain confident
in delivering on our key strategic and operational priorities.
"Whilst we are mindful of the current geopolitical uncertainty, absent an
extended disruption, the Board expects to deliver adjusted operating profit
for FY 2026 in line with current expectations(2)."
(2) The Company is aware of eight analysts publishing independent
research. The Company compiled analyst expectations for the year ended 31
August 2026 is for a mean adjusted operating profit of £24.4m.
Enquiries:
AB Dynamics plc 0207 710 7600
Sarah Matthews-DeMers, Chief Executive Officer
Andrew Lewis, Interim Chief Financial Officer
Peel Hunt LLP (Nominated Adviser and Joint Broker) 0207 894 7000
Mike Bell
Ed Allsopp
Stifel Nicolaus Europe Limited (Joint Broker) 0207 710 7600
Matthew Blawat
Orme Clarke
Teneo 0207 353 4200
James Macey White
Matt Low
The person responsible for arranging the release of this information is Miles
Ingrey-Counter, Company Secretary.
About AB Dynamics plc
AB Dynamics is a leading designer, manufacturer and supplier of advanced
testing, simulation and measurement products and services to the global
transport market.
AB Dynamics is an international group of companies headquartered in Bradford
on Avon. AB Dynamics currently supplies all the top automotive manufacturers,
Tier 1 suppliers and service providers, who routinely use the Group's products
and services to test and verify vehicle safety systems and dynamics.
Half Year Review
Group overview
As previously communicated, and as expected, the first half of FY 2026 was
slightly softer, driven by the timing and nature of order intake in the second
half of FY 2025 where our markets saw customers delay procurement decisions
following the geopolitical and macro-economic disruption across the spring and
summer of 2025.
The Group set out its medium-term growth ambitions in November 2024 and
remains committed to delivering those ambitions, capitalising on the
compelling structural growth drivers within our core sectors through the
Group's market leading service and technology capabilities. Whilst market
conditions over the last 12 months have created short-term disruption, we view
this very much as a timing difference as opposed to any fundamental change in
the market's requirement for our products and services, which continues to
strengthen.
The Group has 14 facilities in six countries across Europe, North America and
Asia. Building on the strength of the core business, coupled with value
enhancing acquisitions, the Group has a high performing, scalable platform
from which to capitalise on a multi-year growth opportunity, supported by
strong long-term structural and regulatory tailwinds.
The Group's mission is to accelerate its customers' drive towards net zero
emissions, improving road safety and the automation of vehicle applications.
Its market-leading position is driven by its technical capabilities and
reputation. The Group's products must satisfy challenging and complex
requirements meaning barriers to entry are high.
Market overview
The automotive sector continues to experience structural and regulatory
changes driving rapid unprecedented evolution, creating the following positive
market drivers for the Group:
· Safety technology and the associated regulatory and certification
requirements are developing rapidly, both in terms of complexity and the rate
of adoption
· Powertrain developments have led to a proliferation of different
models, with electric vehicles ('EVs') and internal combustion engine vehicles
expected to coexist for a longer period
· New entrants into the automotive market are driving competition
for market share, meaning new model development is a key focus for OEMs
· While full scale adoption of autonomous vehicles is not expected
until well into the future, the Group is well placed to benefit as regulation
matures
All of the above trends are long-term tailwinds that support the growth of the
Group's end markets across each of its three sectors, but have also
contributed to volatility in the wider automotive market that can impact the
timing of specific customer procurement activity over a short-term period.
As a global market leading supplier of critical technology products and
services, with a broad international footprint, the Group has an inherently
resilient profile leaving it well placed to manage effectively through any
short-term market headwinds:
· OEMs need to remain fully committed to investing in R&D,
arguably more now than ever given the heightened levels of competition as each
OEM needs to respond to the evolving industry dynamics and their own specific
footprint challenges
· OEMs need AB Dynamics' testing products and services for
development of vehicles and certification of active safety systems across all
types of powertrains
· The Group is a leader in all key global markets and, with over
150 customers, its broad customer base and geographic mix of revenue means it
is largely agnostic to the success or failure of individual OEMs
· The Group's simulation capabilities enable OEMs to accelerate the
efficiency and speed of development by allowing customers to test in a virtual
environment
· In the medium term the Group's international manufacturing and
assembly footprint gives it operational flexibility to react to changes in
automotive market and international trade dynamics
Financial performance in the period
Revenue declined by 16% to £48.8m (H1 2025: £58.0m), with decreases across
all three sectors.
Gross margin was 63.7%, up 350bps on H1 2025 (60.2%) due to positive revenue
mix and a full year effect of operational improvements.
Group adjusted operating profit decreased by 16% to £9.1m (H1 2025: £10.8m).
The adjusted operating margin was maintained at 18.6% (H1 2025: 18.6%), as the
negative effect of operational gearing was offset by the full year effect of
operational improvements, together with cost mitigation actions taken by
management and positive revenue mix.
Adjusted earnings before interest, tax, depreciation and amortisation
('EBITDA') decreased by 12% to £11.3m (H1 2025: £12.9m). Adjusted EBITDA
margin was 23.2% (H1 2025: 22.2%), an increase of 100 bps.
Adjusted net finance costs were £nil (H1 2025: £0.1m).
Adjusted profit before tax was £9.1m (H1 2025: £10.7m). The Group adjusted
tax charge totalled £1.8m (H1 2025: £2.1m), an adjusted effective tax rate
of 20% (H1 2025: 20%).
Adjusted diluted earnings per share was 31.3p (H1 2025: 37.0p), a decrease of
15%, reflecting the decrease in operating profit.
Statutory operating loss was £12.1m (H1 2025: £6.7m profit) and after net
finance costs of £0.3m (H1 2025: £0.4m), statutory loss before tax was
£12.4m (H1 2025: £6.3m profit). The statutory tax credit was £0.2m (H1
2025: £1.2m charge), resulting in a statutory basic loss per share of 53.0p
(H1 2025: 22.2p earnings). A reconciliation of statutory to underlying
non-GAAP financial measures is provided in note 3.
The net cash position at the period end was £39.3m (28 February 2025:
£27.2m, 31 August 2025: £41.4m) underpinning a robust balance sheet and
providing the significant resources from which to continue the Group's
investment programme. Adjusted operating cash of £6.5m (H1 2025: £9.3m)
reflected an investment in working capital as customer deliveries occurred
later in the period than usual due to the timing of order intake in the second
half of FY 2025. Cash conversion over the last 12 months was 102% of adjusted
EBITDA, and the rolling three-year average was 105%, demonstrating that the
ongoing focus on working capital improvements is delivering long-term,
sustainable cash generation.
The order book at 28 February 2026 was £47m (28 February 2025: £42m, 31
August 2025: £32m), with £29m for delivery in the second half of the year.
This, combined with revenue delivered in the first half of the year provides
circa 70% cover of FY 2026 expected revenue, providing good visibility for the
rest of FY 2026.
Sector review
H1 2026 H1 2025 Change
£m £m
Testing Products
Revenue 31.0 37.5 -17%
Adjusted EBITDA 8.2 9.1 -10%
Adjusted operating profit 6.8 8.1 -16%
Testing Services
Revenue 6.5 9.1 -29%
Adjusted EBITDA 1.7 2.8 -39%
Adjusted operating profit 1.2 1.9 -37%
Simulation
Revenue 11.3 11.4 -1%
Adjusted EBITDA 3.4 3.0 +13%
Adjusted operating profit 3.1 2.8 +11%
Testing Products
The Group's Testing Products are used on proving grounds, test tracks and in
the laboratory to evaluate the performance of vehicle active safety systems,
autonomous technologies, EVs, vehicle durability, vehicle dynamics and
electronics testing.
In Testing Products, underlying demand drivers remain strong and order intake
was encouraging during H1 2026, particularly in Asia Pacific and North
America.
Testing products revenue of £31.0m was down 17% against H1 2025 revenue of
£37.5m as a material delivery of robots to a North American OEM made in H1
2025 did not recur in the period. The increase in margin was driven by
operational efficiencies, together with cost control measures focused on the
timing of discretionary spend.
Global New Car Assessment Program ('NCAP') testing requirements for ADAS have
been increasing rapidly with further growth expected. Euro NCAP's recently
published protocols for 2026 will add new tests through an extended layer
creating higher speed and more challenging scenarios. The standard tests and
new extended range take the number of test scenarios to over 1,000. While Euro
NCAP is currently the most stringent, it is expected that other NCAPs will
move towards adoption of these stricter standards. New tests for commercial
vehicles offer further opportunities for market expansion.
High value Suspension Parameter Measuring Machines (SPMMs) sales are
individually material and revenue recognition is impacted by timing of
delivery. Demand for SPMMs continued to grow, with additional orders received
during the period for delivery in the second half of the year and early FY
2027.
The Group continues to invest in new product development in the Testing
Products sector in order to meet forthcoming regulatory requirements and to
ensure we retain our market leadership in testing technology.
Testing Services
Testing Services includes revenue from the Group's test facility in
Bakersfield, USA, where testing of ADAS systems and vehicle dynamics is
performed on behalf of OEMs, technology developers and government agencies.
VTS, based in Michigan, USA, performs laboratory-based mileage accumulation
testing as well as assessment of EV powertrain and battery performance.
In China, the Group provides on-road vehicle testing services on behalf of a
European OEM for the assessment of all aspects of vehicle performance,
particularly focusing on EV performance, charging capability and vehicle
connectivity.
Revenue decreased by 29% to £6.5m (H1 2025: £9.1m). Whilst there was strong
growth at our US businesses, our VadoTech business in China has seen
significantly weaker than anticipated volumes under the new contract with a
European OEM, awarded at the end of last year.
The ramp in the volume of cars under VadoTech's new contract is not occurring
as previously indicated by the customer, who is experiencing challenging local
market conditions in China. The services provided have become commoditised and
therefore swift management action has been taken, with a strategic review of
the VadoTech business having commenced and expected to conclude in the second
half of the year. The Group has recorded exceptional items totalling £16.8m
in relation to VadoTech, the majority of which is a non-cash impairment charge
(see note 3 of the interim report). This is an isolated issue with a single
European OEM that is facing challenging local market conditions in China and
has no bearing on the opportunities to sell Testing Products to Chinese OEMs
for local use in China, which has been a strong market for our testing
products in the first half of the year.
The remaining Testing Services businesses in the US are higher margin than the
VadoTech business with good quality earnings. A summary of the Testing
Services segment excluding VadoTech is presented below:
H1 2026 H1 2026 excluding VadoTech H1 2025 H1 2025 excluding VadoTech FY 2025 FY 2025 excluding VadoTech
£m £m £m
£m £m £m
Testing Services
Revenue 6.5 4.3 9.1 3.3 18.0 7.5
Adjusted EBITDA 1.7 1.9 2.8 1.5 5.8 4.2
Adjusted operating profit 1.2 1.6 1.9 0.9 4.4 3.4
Simulation
The Group provides both physical simulators and advanced, physics-based
simulation software. Simulators are used by both automotive manufacturers and
motorsport teams to accurately represent the real world using the rFpro
software, coupled with state-of-the-art motion platforms and static driving
simulators to assist in development of new vehicles and improve performance.
Our newly launched Delta S3 Spin simulator received its first order late in FY
2025 and further orders in FY 2026, demonstrating the value of the investment
made in this area.
Simulation revenue decreased by 1% to £11.3m (H1 2025: £11.4m) due to lower
motion platform sales in the period, where we expect revenue to be more
heavily weighted to the second half, offset by higher software sales. High
value motion platform sales are individually material and two further contract
wins are assumed in H2 2026 revenue expectations.
Strategy
The Group continues to make good progress against its organic led growth
strategy, supplemented with value enhancing acquisitions.
The structural drivers from which the Group benefits, namely vehicle
development cycles, safety regulation and trends in new mobility, including
active safety, autonomy and connected vehicle technology, provide tailwinds
for growth over the long term alongside resilience against the more
challenging near-term dynamics in the automotive industry.
Products and innovation
The Group has expanded its simulation offering with new products such as the
Delta S3 Spin simulator that was launched during the previous year, with
further orders received from customers during the first half of this year.
Market led new product development continues to be a core focus of the Group's
capital allocation policy to ensure that our customers' current and future
needs are met, while regulatory requirements and the number and complexity of
test scenarios increase.
In relation to Artificial intelligence ('AI'), our recently launched AV
Elevate tool is designed to accelerate the development of Autonomous Vehicles
('AVs') and ADAS by enabling engineers to train and test their technology,
such as sensor systems or perception algorithms, using engineering-grade
synthetic training data that can be customised to cover hundreds of edge-case
scenarios. Further opportunities to exploit AI in our product and software
offering are being explored, in addition to maximising efficiencies from its
use in administrative tasks such as the preparation of proposal documents and
meeting minutes.
The Group's intellectual property ('IP') is critical to its market-leading
position and we have taken steps to mitigate the risk of loss of IP due to AI
related data leaks, including only using approved enterprise AI tools and
implementing a Group wide AI Usage Policy that restricts how confidential and
proprietary information may be used, ensuring that Group data is not shared
externally or used to train public AI models.
The development and adoption of AVs is not perceived as a risk to demand for
the Group's products. Our platforms and targets are required by AV developers
to create realistic, multi-object scenarios for testing, while our driving
robots are used as actuators to develop and test control algorithms used in
self-driving vehicles. As the regulatory environment for AVs matures, this
will lead to an increased level of testing and certification which the Group
is well placed to benefit from, both via physical testing and in simulation.
Capability and capacity
The investment in the Group's infrastructure, people and processes over the
last five years has built the foundations for accelerating profitable growth,
which in turn has been demonstrated by the margin expansion seen during the
prior year. Operational improvements, facilitated by our new ERP system, have
reduced customer lead times, helping to expand and protect market share.
Product quality has also been improved by rationalising the number of product
configuration options, implementing a new supplier quality management system
and introducing more stringent subassembly testing procedures. Further
opportunities for standardisation of products and simplification of supply
chain are being pursued to improve capability and capacity further, in
addition to other commercial initiatives.
Acquisitive growth
Acquisitions have been, and will continue to be, a significant part of the
overall strategy.
A number of M&A opportunities were evaluated during the period, but we
remained disciplined in our evaluation process against strategic and financial
criteria and chose not to progress any of these to completion.
There is a promising pipeline of potential value enhancing and strategically
compelling acquisition opportunities and with net cash of £39.3m at period
end, the Group has significant resources with which to take advantage of
opportunities that arise.
Service and support
The Group has expanded its software suite during the period with the release
of a new module designed specifically for the demands of the latest Euro NCAP
2026 protocols, with over 1,000 new pre-defined test scenarios, enabling
customers to significantly increase the efficiency of testing. In addition,
market interest is continuing to build for the Group's simulation software
solution for ADAS and AV development, AV Elevate.
The Group continues to focus on maximising its service and support revenue
streams via targeted upselling of value add services, such as calibration, and
specific software upgrades to its installed customer base.
International footprint
Through selective acquisitions in different locations and the targeting of key
geographies through its regional sales offices, the Group's international
footprint has continued to grow. Our broad customer base and leadership
positions in key regional markets give rise to an attractive geographic mix of
revenue, which has helped to reduce any adverse impact of the current
volatility in the automotive industry. Looking ahead, our international
footprint and improved operational capability provides optionality over future
manufacturing and assembly locations which will enable us to optimise our
approach to future developments in both the automotive sector and trade
economics.
Diversification
As part of the objective to diversify into adjacent markets, ABD Solutions
continues to make significant progress in its mission to add automated
solutions to existing vehicle fleets in a faster and more cost effective way.
A number of opportunities for niche applications for the robotic automation
retrofit system are in progress.
As part of a larger project with a major automotive OEM, ABD Solutions has
also provided enabling technology into a new automated mileage accumulation
solution with initial revenues delivered during the prior year. This
technology, used in a LiDAR-based object detection system, has subsequently
been launched to the wider market as ClearTrack(TM).
Medium term growth ambitions
The strategic pillars described above gave rise to the medium-term growth
ambitions we articulated in November 2024. At that point we clearly didn't
have visibility of some of the geo-political and macro-economic issues and
challenges that 2025 and 2026 have brought and the medium-term progression was
never likely to occur in a linear fashion. Market conditions in the last two
years have seen particularly high levels of disruption to operational and
demand environments, but we have continued to take the key enabling actions
and strategic developments that will support our delivery of these ambitions
over time. With the structural drivers supporting growing demand in our core
markets only strengthening in this period, we remain confident in the Group's
ability to achieve our key targets.
Organic revenue growth
The Group's ambition of average organic growth of 10% per year is underpinned
by structural tailwinds in vehicle development and safety regulation, which
have supported the revenue growth the Group has delivered previously and,
given the long-term nature of these market drivers, is expected to sustain
increases in both volume and pricing going forward. The impacts of the
structural tailwinds are multi-faceted and the timing of the associated volume
increases is fluid across different geographies and OEM customers.
In vehicle development, for example, our testing equipment is used in the
development of active safety features for new vehicle models, thus sales
volumes for equipment correlates broadly with the adoption of these features
into new models. As OEMs include an increasing level of active safety features
throughout their range of models, for example by adding more ADAS technology
onto vehicles sold in non-mature markets such as India, demand for our
equipment is expected to increase. Volume increases for our Simulation sector
will be driven by the gradual adoption of simulation by OEMs in the
development process. The benefits of this are clear, namely the drive for cost
efficiency and speed to market, however OEMs are at varying stages of
technology adoption and hence the timing of growth is dependent on the
conversion of specific opportunities.
In safety regulation, increases in volume in our Testing Products and Testing
Services sectors are linked to step changes in regulatory requirements and the
requirements of consumer rating bodies such as Euro NCAP. Again, the link to
volumes is multi-faceted, varying by OEM and geography, with non-linear timing
and demand drivers occurring at both the development phase, for the OEMs
developing the safety technology, and at the certification stage, for OEMs and
regulatory bodies performing testing. As an example, the upcoming regulatory
change in the US, which will mandate all passenger vehicles to have Automatic
Emergency Braking by 2029, has driven a significant demand increase for
testing equipment among US OEMs who are responding to the regulatory step
change by adding to their ADAS testing capabilities. Similar demand trends
have been observable in the past as regulatory and consumer ratings testing
stringency has increased in recent years, and are expected to continue as the
testing environment increases in complexity and non-mature markets harmonise
testing standards with mature markets such as Europe.
In addition to the expected volume increases, the Group has a strong position
in the market and a premium offering, which gives it strong pricing power and
has enabled it to consistently increase prices above inflation in recent
years. The safety critical applications for the Group's equipment, as well as
its service and support package that is critical to its customers' development
cycles, further strengthens the Group's competitive position and should
facilitate further price increases in future, which will contribute towards
achieving its organic growth targets.
Margin progression
The Group made good progress in this area in FY 2025, delivering operational
improvements which were margin enhancing and embedded in the business, thus we
see the full year effect of these in H1 2026. We maintain our focus on
commercial and operational excellence which we expect to allow us to deliver
the targeted > 20% margin in the medium term.
Targeted M&A
We continue to target value enhancing M&A. We review a number of
opportunities in each period, but maintain our discipline when evaluating them
so that we execute only those that meet our strategic and financial criteria.
We maintain a Group balance sheet that gives us the flexibility to execute
transactions as and when the right opportunity arises.
Alternative performance measures
In the analysis of the Group's financial performance and position, operating
results and cash flows, alternative performance measures are presented to
provide readers with additional information. The principal measures presented
are adjusted measures of earnings including adjusted operating profit,
adjusted EBITDA, adjusted operating margin, adjusted profit before tax,
adjusted earnings per share and adjusted cash flow from operations. A
reconciliation of adjusted measures to statutory measures is provided in note
3.
Foreign currency exposure
The Group faces currency exposure on its foreign currency transactions and
with significant overseas operations, also has exposure to foreign currency
translation risk. The Group maintains a natural hedge whenever possible to
transactional exposure by matching the cash inflows and outflows in the
respective currencies.
On a constant currency basis, revenue would have been £0.9m higher than
reported at £49.7m and adjusted operating profit would have been £0.2m
higher than reported at £9.3m, as the US dollar and Yen weakened against
sterling while the Euro has strengthened against sterling compared to H1 2025.
Return on capital employed ('ROCE')
Our capital-efficient business and high margins enable generation of strong
ROCE (defined as adjusted operating profit as a percentage of capital
employed, being shareholders' equity less net cash plus deferred tax
liabilities and contingent consideration). On a rolling 12-month basis the
ROCE was 21.2% (H1 2025: 20.3%) benefitting from further improvement in
operating margin alongside disciplined capital management.
Capital allocation
Our capital allocation framework aims to deliver sustainable compounding
growth as well as growing returns to shareholders. Our priorities are:
· Continuous organic investment and innovation to protect and grow
the core business
· Complementary acquisitions contributing to one or more of the
Group's strategic priorities
· Progressive dividend policy
Dividends
The Board has declared an interim dividend of 3.08p per ordinary share (H1
2025: 2.80p), an increase of 10%, which will be paid on 15 May 2026 to
shareholders on the register on 1 May 2026.
A final dividend of 6.36p per share was paid on 30 January 2026 in respect of
the year ended 31 August 2025 totalling £1.5m. 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.
Summary and Outlook
The Group set out its medium-term growth ambitions in November 2024 and
remains committed to delivering those ambitions, capitalising on the
compelling structural growth drivers within our core sectors through the
Group's market leading service and technology capabilities. Whilst market
conditions over the last 12 months have created short-term disruption, we view
this very much as a timing difference as opposed to any fundamental change in
the market's requirement for our products and services, which continues to
strengthen.
The Group is geographically diversified, OEM and powertrain agnostic, selling
into R&D and testing functions, providing resilience against short-term
automotive industry headwinds. Future growth prospects remain supported by
long-term structural and regulatory growth drivers in active safety,
autonomous systems and the automation of vehicle applications, underpinning
our medium-term financial objectives. We are continuing to invest in new
product development and have the capacity to accelerate progress with further
value creating acquisitions.
Encouragingly, underlying demand drivers remain strong and customer activity,
which we saw increase towards the end of FY 2025, remained at robust levels
through the first half of FY 2026. As a result, the Group carries forward
£47m of orders (H1 2025: £42m), with £29m for delivery in H2, which
combined with revenue delivered in the first half of the year provides circa
70% cover of FY 2026 expected revenue.
We note the emerging situation in the Middle East and whilst the Group has no
operating footprint in the region, we continue to monitor any potential
impacts from broader risks to trade, cost inflation and supply chain
disruption. The Group has strong pricing power and a proven, agile approach to
managing the business through changing conditions and so we remain confident
in delivering on our key strategic and operational priorities.
Whilst we are mindful of the current geopolitical uncertainty, absent an
extended disruption, the Board expects adjusted operating profit for FY 2026
to be in line with current expectations(2) with an expected 55-60% revenue
bias towards the second half of the year.
(2) The Company is aware of eight analysts publishing independent research.
The Company compiled analyst expectations for the year ended 31 August 2026 is
for a mean adjusted operating profit of £24.4m.
Directors' Responsibility Statement
The Directors confirm that this condensed consolidated half year financial
information has been prepared in accordance with International Accounting
Standard 34, 'Interim Financial Reporting' as adopted by the United Kingdom,
and that the half year management report herein includes a fair review of the
information required by DTR 4.2.7 and DTR 4.2.8, namely:
· an indication of important events that have occurred during the
first six months and their impact on the condensed consolidated half year
financial information, and a description of the principal risks and
uncertainties for the remaining six months of the financial year; and
· material related party transactions in the first six months and
any material changes in the related party transactions described in the last
annual report.
By order of the Board
Sarah Matthews-DeMers
Chief Executive Officer
14 April 2026
AB Dynamics plc
Unaudited condensed consolidated statement of comprehensive income
for the six months ended 28 February 2026
Unaudited 6 months ended Unaudited 6 months ended Audited Year ended 31 August
28 February 2026 28 February 2025 2025
Adjusted Adjustments Statutory Adjusted Adjustments Statutory Adjusted Adjustments Statutory
Note £m £m £m £m £m £m £m £m £m
Revenue 2 48.8 - 48.8 58.0 - 58.0 114.7 - 114.7
Cost of sales (17.7) - (17.7) (23.1) - (23.1) (43.6) - (43.6)
Gross profit 31.1 - 31.1 34.9 - 34.9 71.1 - 71.1
General and administrative expenses (22.0) (21.2) (43.2) (24.1) (4.1) (28.2) (47.8) (7.8) (55.6)
Operating profit / (loss) 9.1 (21.2) (12.1) 10.8 (4.1) 6.7 23.3 (7.8) 15.5
Operating profit / (loss) is analysed as:
Before depreciation and amortisation 11.3 (18.1) (6.8) 12.9 (1.0) 11.9 27.8 (1.6) 26.2
Depreciation and amortisation (2.2) (3.1) (5.3) (2.1) (3.1) (5.2) (4.5) (6.2) (10.7)
Operating profit / (loss) 9.1 (21.2) (12.1) 10.8 (4.1) 6.7 23.3 (7.8) 15.5
Net finance expense - (0.3) (0.3) (0.1) (0.3) (0.4) (0.4) (0.5) (0.9)
Profit / (loss) before tax 9.1 (21.5) (12.4) 10.7 (4.4) 6.3 22.9 (8.3) 14.6
Tax (expense) / credit (1.8) 2.0 0.2 (2.1) 0.9 (1.2) (4.2) 1.6 (2.6)
Profit / (loss) for the period 7.3 (19.5) (12.2) 8.6 (3.5) 5.1 18.7 (6.7) 12.0
Other comprehensive income
Items that may be reclassified to consolidated income statement:
Exchange gain on translation of foreign operations 0.6 - 0.6 1.1 - 1.1 0.1 - 0.1
Total comprehensive income / (loss) for the period 7.9 (19.5) (11.6) 9.7 (3.5) 6.2 18.8 (6.7) 12.1
Earnings / (loss) per share - basic (pence) 5 31.7p (53.0p) 37.5p 22.2p 81.3p 52.2p
Earnings / (loss) per share - diluted (pence) 5 31.3p (53.0p) 37.0p 21.9p 80.3p 51.5p
AB Dynamics plc
Unaudited condensed consolidated statement of financial position
as at 28 February 2026
Unaudited Unaudited Audited
28 February 28 February 31 August
2026 2025 2025
£m
£m £m
ASSETS Note
Non-current assets
Goodwill 39.0 46.2 45.3
Acquired intangible assets 21.8 32.5 29.3
Other intangible assets 3.2 2.8 2.9
Property, plant and equipment 28.8 29.8 29.0
Right-of-use assets 3.0 3.0 3.0
95.8 114.3 109.5
Current assets
Inventories 12.6 15.2 13.9
Trade and other receivables 22.6 20.5 14.3
Contract assets 2.8 3.8 4.6
Cash and cash equivalents 7 42.9 30.6 44.7
80.9 70.1 77.5
Assets held for sale 1.9 1.9 1.9
LIABILITIES
Current liabilities
Trade and other payables 21.3 21.3 19.7
Contract liabilities 12.6 10.5 9.1
Short-term lease liabilities 7 1.1 1.8 1.1
Contingent consideration 6.3 3.8 6.1
41.3 37.4 36.0
Non-current liabilities
Deferred tax liabilities 8.4 7.9 9.7
Long-term lease liabilities 7 2.5 1.6 2.2
Contingent consideration - 3.4 1.1
10.9 12.9 13.0
Net assets 126.4 136.0 139.9
Shareholders' equity
Share capital 0.2 0.2 0.2
Share premium 62.9 62.9 62.9
Other reserves 8 1.4 1.8 0.8
Retained earnings 61.9 71.1 76.0
Total equity 126.4 136.0 139.9
AB Dynamics plc
Unaudited condensed consolidated statement of changes in equity
for the six months ended 28 February 2026
Share capital Share premium Other reserves Retained earnings
Total equity
£m £m £m £m £m
At 1 September 2025 0.2 62.9 0.8 76.0 139.9
Total comprehensive income / (loss) - - 0.6 (12.2) (11.6)
Share based payments - - - 0.7 0.7
Dividend paid - - - (1.5) (1.5)
Purchase of own shares - - - (1.1) (1.1)
At 28 February 2026 0.2 62.9 1.4 61.9 126.4
At 1 September 2024 0.2 62.9 0.7 67.5 131.3
Total comprehensive income - - 1.1 5.1 6.2
Share based payments - - - 0.7 0.7
Dividend paid - - - (1.2) (1.2)
Purchase of own shares - - - (1.0) (1.0)
At 28 February 2025 0.2 62.9 1.8 71.1 136.0
At 1 September 2024 0.2 62.9 0.7 67.5 131.3
Total comprehensive income - - 0.1 12.0 12.1
Share based payments - - - 0.7 0.7
Deferred tax on share based payments - - - (0.2) (0.2)
Dividend paid - - - (1.9) (1.9)
Purchase of own shares - - - (2.1) (2.1)
At 31 August 2025 0.2 62.9 0.8 76.0 139.9
AB Dynamics plc
Unaudited condensed consolidated cash flow statement
for the six months ended 28 February 2026
Unaudited Unaudited Audited Year
6 months 6 months ended
ended ended 31 August
28 February 28 February 2025
2026 2025
£m £m £m
(Loss) / profit before tax (12.4) 6.3 14.6
Depreciation and amortisation 5.3 5.2 10.7
Finance expense 0.3 0.4 0.9
Share based payments 0.7 0.8 0.7
Impairment and other non-cash exceptional items 16.4 - -
Operating cash flows before changes in working capital 12.7 26.9
10.3
Decrease/(increase) in inventories 1.4 (0.2) 1.0
Increase in trade and other receivables (7.5) (7.0) (1.6)
Increase in trade and other payables 0.6 2.8 1.5
Cash flows from operations 4.8 8.3 27.8
Cash flows from operations are analysed as:
Adjusted cash flows from operations 6.5 9.3 29.4
Cash impact of adjusting items (1.7) (1.0) (1.6)
Cash flows from operations 4.8 8.3 27.8
Finance income / (costs) received / (paid) 0.1 - (0.2)
Income tax paid (0.9) (1.6) (2.9)
Net cash flows from operating activities 4.0 6.7 24.7
Cash flows used in investing activities
Acquisition of businesses net of cash (1.1) (3.5) (3.4)
Purchase of property, plant and equipment (1.2) (0.9) (2.3)
Capitalised development costs and purchased software (0.4) (0.6) (0.8)
Proceeds from sale of property, plant and equipment 0.1 - -
Net cash used in investing activities (2.6) (5.0) (6.5)
Cash flows used in financing activities
Dividends paid (1.5) (1.2) (1.9)
Purchase of own shares (1.1) (1.0) (2.1)
Repayment of lease liabilities (0.7) (0.7) (1.3)
Net cash flow used in financing activities (3.3) (2.9) (5.3)
Net (decrease) / increase in cash and cash equivalents (1.9) (1.2) 12.9
Cash and cash equivalents at beginning of the period 44.7 31.8 31.8
Effects of exchange rate changes 0.1 - -
Cash and cash equivalents at end of the period 42.9 30.6 44.7
AB Dynamics plc
Notes to the unaudited interim report
for the six months ended 28 February 2026
1. Basis of preparation
The Company is a public limited company limited by shares and incorporated
under the UK Companies Act. The Company is domiciled in the United Kingdom and
the registered office and principal place of business is Middleton Drive,
Bradford on Avon, Wiltshire, BA15 1GB.
The principal activity is the specialised area of design, manufacture and
supply of advanced testing, simulation and measurement products and services
to the global transport market.
The annual financial statements of the Group are prepared in accordance with
UK-adopted international accounting standards and applicable law. A copy of
the statutory accounts for the year ended 31 August 2025 has been delivered to
the Registrar of Companies. The auditor's report on those accounts was
unqualified and did not contain any statements under section 498(2) or (3) of
the Companies Act 2006.
The same accounting policies, presentation and methods of computation have
been followed in this unaudited interim financial information as those which
were applied in the preparation of the Group's annual financial statements for
the year ended 31 August 2025.
A new amendment to standards and interpretations became applicable for the
current reporting period. The application of this amendment has not had any
material impact on the disclosures, net assets or results of the Group.
The interim accounts are unaudited and do not constitute statutory accounts as
defined in Section 434 of the Companies Act 2006.
Going concern basis of accounting
At 28 February 2026 the Group had £39.3m of net cash and a £20.0m undrawn
revolving credit facility. The Directors believe that the Group is well placed
to manage its financing and other business risks satisfactorily and have a
reasonable expectation that the Group will have adequate resources to continue
in operation for at least twelve months from the signing date of this
financial information.
As part of their regular assessment of the Group's working capital and
financing position, the Directors have prepared a cash flow forecast for the
period through to 31 August 2027, being at least twelve months after the date
of approval of the financial statements. Additional sensitivity analysis has
been performed on the forecasts to consider the impact of a severe, but
plausible, reasonable worst case scenario on the Group's cashflow and covenant
requirements. The scenario, which sensitised the forecasts for specific
identified risks, modelled the reduction in anticipated levels of net cash and
the associated reduction of adjusted EBITDA. The scenario considered the
principal risks and uncertainties referred to in note 11 and modelled the
financial impact of all of the below sensitivities to the base case forecast:
· A reduction in demand of 25% over the next two financial years
· A 10% increase in operating costs
· An increase in the cash collection cycle
· An increase in input costs resulting in a reduction in gross
margin by 12%
The sensitised scenario shows headroom on the Group's revolving credit
facility and covenant thresholds throughout the forecast period. After
consideration of the above, the Directors have a reasonable expectation that
the Group has adequate resources to continue in operational existence for at
least twelve months after the date of approval of the interim financial
statements. They therefore consider it appropriate to adopt the going concern
basis of accounting in preparing the interim financial statements.
2. Segment information
The Group derives revenue from the sale of its advanced measurement,
simulation and testing products and services used in assisting the global
transport market in the laboratory, on the test track and on-road. The Group
has three segments.
The operating segments are based on internal reports about components of the
Group, which are regularly reviewed and used by the Board of Directors being
the Chief Operating Decision Maker.
Unaudited Unaudited
6 months ended 6 months ended
28 February 2026 28 February 2025
Testing Products Testing Services Testing Products Testing Services
£m £m Simulation Unallocated* Total £m £m Simulation Unallocated* Total
£m £m £m £m £m £m
Revenue 31.0 6.5 11.3 - 48.8 37.5 9.1 11.4 - 58.0
Adjusted operating profit 6.8 1.2 3.1 (2.0) 9.1 8.1 1.9 2.8 (2.0) 10.8
Operating profit is analysed as:
Before depreciation and amortisation 8.2 1.7 3.4 (2.0) 11.3 9.1 2.8 3.0 (2.0) 12.9
Depreciation and amortisation (1.4) (0.5) (0.3) - (2.2) (1.0) (0.9) (0.2) - (2.1)
Adjusted operating profit 6.8 1.2 3.1 (2.0) 9.1 8.1 1.9 2.8 (2.0) 10.8
Amortisation of acquired intangibles (0.2) (1.7) (1.2) - (3.1) (0.2) (1.7) (1.2) - (3.1)
Adjusting items - (16.8) - (1.3) (18.1) - - - (1.0) (1.0)
Operating profit / (loss) 6.6 (17.3) 1.9 (3.3) (12.1) 7.9 0.2 1.6 (3.0) 6.7
Net finance expense (0.3) (0.4)
(Loss) / profit before tax (12.4) 6.3
Tax credit / (expense) 0.2 (1.2)
(Loss) / profit for the year (12.2) 5.1
*Unallocated items are head office costs that cannot be allocated to a
business segment.
Audited
Year ended
31 August 2025
Testing Products Testing Services
£m £m Simulation Unallocated* Total
£m £m £m
Revenue 74.3 18.0 22.4 - 114.7
Adjusted operating profit 16.9 4.4 5.0 (3.0) 23.3
Operating profit is analysed as:
Before depreciation and amortisation 19.4 5.8 5.5 (2.9) 27.8
Depreciation and amortisation (2.5) (1.4) (0.5) (0.1) (4.5)
Adjusted operating profit 16.9 4.4 5.0 (3.0) 23.3
Amortisation of acquired intangibles (0.5) (3.4) (2.3) - (6.2)
Adjusting items - - - (1.6) (1.6)
Operating profit 16.4 1.0 2.7 (4.6) 15.5
Net finance expense (0.9)
Profit before tax 14.6
Tax expense (2.6)
Profit for the year 12.0
*Unallocated items are head office costs that cannot be allocated to a
business segment.
Analysis of revenue by destination:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
28 February 2026 28 February 2025 31 August 2025
£m £m £m
Europe (including United Kingdom) 12.9 11.7 31.8
North America 13.0 17.3 29.4
Asia Pacific 22.3 28.9 53.3
Rest of World 0.6 0.1 0.2
48.8 58.0 114.7
3. Alternative performance measures
In the analysis of the Group's financial performance and position, operating
results and cash flows, alternative performance measures are presented to
provide readers with additional information. The principal measures presented
are adjusted measures of earnings including adjusted EBITDA, adjusted
operating profit, adjusted operating margin, adjusted profit before tax,
adjusted earnings per share and adjusted cash flow from operations.
The interim financial information includes both statutory and adjusted
non-GAAP financial measures, the latter of which the Directors believe better
reflect the underlying performance of the business and provide a more
meaningful comparison of how the business is managed and measured on a
day-to-day basis. The Group's alternative performance measures and KPIs are
aligned to the Group's strategy and together are used to measure the
performance of the business and form the basis of the performance measures for
remuneration. Adjusted results exclude certain items because if included,
these items could distort the understanding of the performance for the year
and the comparability between the periods.
Comparatives are provided alongside all current period figures. The term
'adjusted' is not defined under IFRS and may not be comparable with similarly
titled measures used by other companies. All profit and earnings per share
figures in this interim report relate to underlying business performance (as
defined above) unless otherwise stated.
A reconciliation of adjusted measures to statutory measures is provided below:
H1 2026 H1 2025
Adjusted Adjustments Statutory Adjusted Adjustments Statutory
EBITDA (£m) 11.3 (18.1) (6.8) 12.9 (1.0) 11.9
Operating profit / (loss) (£m) 9.1 (21.2) (12.1) 10.8 (4.1) 6.7
Operating margin 18.6% (24.8%) 18.6% 11.6%
Finance expense (£m) - (0.3) (0.3) (0.1) (0.3) (0.4)
Profit / (loss) before tax (£m) 9.1 (21.5) (12.4) 10.7 (4.4) 6.3
Taxation(£m) (1.8) 2.0 0.2 (2.1) 0.9 (1.2)
Profit / (loss) after tax (£m) 7.3 (19.5) (12.2) 8.6 (3.5) 5.1
Diluted earnings/(loss) per share (pence) 31.3 (53.0) 37.0 21.9
Cash flow from operations (£m) 6.5 (1.7) 4.8 9.3 (1.0) 8.3
The adjustments comprise:
H1 2026 H1 2025 Cash flow impact H1 2026 Cash flow impact H1 2025
£m £m £m £m
Amortisation of acquired intangibles 3.1 3.1 - -
Acquisition related costs 0.1 0.5 0.1 0.5
ERP development costs 0.5 0.5 0.5 0.5
CEO and CFO transition costs 0.7 - 0.7 -
Impairment of VadoTech Group assets 12.3 - - -
Restructuring costs - VadoTech Group 0.4 - 0.4 -
Onerous contract provision - VadoTech Group 4.1 - - -
Adjustments to operating profit 21.2 4.1 1.7 1.0
Acquisition related finance costs 0.3 0.3 - -
Adjustments to profit before tax 21.5 4.4 1.7 1.0
Amortisation of acquired intangibles
The amortisation relates to the businesses acquired in the previous years,
DRI, rFpro, VadoTech Group, Ansible Motion, Venshure Test Services and Bolab.
Acquisition related costs
The current year cost relates to the professional fees incurred in relation to
the Group's mergers and acquisitions activity during the period. The cost in
the prior year relates to the acquisition of Bolab.
ERP development costs
These costs relate to the development, configuration and customisation of the
Group's new ERP system which is hosted in the cloud.
CEO and CFO transition costs
The amount includes the external recruitment costs of both the CEO and CFO
roles, together with the one-off costs of restructuring the corporate office
team following the change in leadership.
Impairment of VadoTech Group assets
VadoTech Group has seen significantly weaker than anticipated volumes under
its new contract with a European OEM, awarded at the end of last year. The
customer has faced challenging local market conditions and the lower
consequent activity has resulted in revenue reducing by approximately one half
to less than £3m for the period. In light of this, the Group will undertake a
strategic review of VadoTech Group during the second half of the year and has
recorded a non-cash impairment expense of £12.3m, of which £6.4m relates to
goodwill, £4.4m to acquired intangible assets and £1.5m to other assets.
Restructuring costs - VadoTech Group
The amount includes one-off costs of redundancy payments incurred to date at
VadoTech Group, as the Group took mitigating action to reduce its cost base in
response to the lower than anticipated volumes under its new contract.
Onerous contract provision - VadoTech Group
The contract with a European OEM with lower than anticipated volumes is in a
loss-making position as a result of the unavoidable costs to meet the
obligations under the contract, therefore an onerous contract provision has
been recorded.
Acquisition related finance costs
Finance costs relate to the unwind of the discount on deferred contingent
consideration payable on the acquisition of Venshure Test Services and Bolab
(H1 2025: Venshure Test Services and Bolab).
Tax
The tax impact of these adjustments was as follows: amortisation £0.8m (H1
2025: £0.8m, 31 August 2025: £1.3m), acquisition related costs £nil (H1
2025: £Nil, 31 August 2025: £0.1m), impairment of VadoTech Group assets
£0.8m (H1 2025: £Nil, 31 August 2025: £Nil), restructuring costs £0.3m (H1
2025: £Nil, 31 August 2025: £nil) and ERP development costs £0.1m (H1 2025:
£0.1m, 31 August 2025: £0.2m).
Cash impact
The operating cash flow impact of the adjustments was an outflow of £1.7m (H1
2025: £1.0m, 31 August 2025: £1.6m) being £0.5m (H1 2025: £0.5m, 31 August
2025: £1.1m) in relation to ERP development costs, £1.1m (H1 2025: £Nil, 31
August 2025: £Nil) in relation to restructuring costs and £0.1m (H1 2025:
£0.5m, 31 August 2025: £0.5m) in relation to acquisition costs.
4. Tax
The statutory effective tax rate for the period is a credit of 2% (H1 2025:
charge of 19%, FY 2025: charge of 18%).
The adjusted effective tax rate, adjusting both the tax charge and the profit
before taxation is 20% (H1 2025: 20%, FY 2025: 18%).
5. Earnings per share
The calculation of earnings per share is based on the following earnings and
number of shares:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
28 February 28 February 31 August
2026 2025 2025
Weighted average number of shares ('m)
Basic 23.0 23.0 23.0
Diluted 23.3 23.3 23.3
(Loss) / earnings per share (pence)
(Loss)/profit after tax attributable to owners of the Group (£m) 5.1 12.0
(12.2)
Basic (53.0) 22.2 52.2p
Diluted (53.0) 21.9 51.5p
Adjusted earnings per share (pence)
Adjusted profit after tax attributable to owners of the Group (£m) 7.3 8.6 18.7
Adjusted basic 31.7 37.5 81.3p
Adjusted diluted 31.3 37.0 80.3p
6. Dividends
At the Annual General Meeting the shareholders approved a final dividend in
respect of the year ended 31 August 2025 of 6.36p per ordinary share totalling
£1.5m. This was paid on 30 January 2026 to shareholders on the register on 16
January 2026.
An interim dividend of 3.08p per ordinary share totalling £0.7m has been
declared in respect of the year ending 31 August 2026 which will be paid on 15
May 2026 to shareholders on the register on 1 May 2026.
7. Net cash
Net cash comprises cash and cash equivalents, bank overdrafts, borrowings and
lease liabilities.
Unaudited Unaudited Audited
28 February 28 February 31 August
2026 2025 2025
£m
£m £m
Cash and cash equivalents 42.9 30.6 44.7
Lease liabilities (3.6) (3.4) (3.3)
39.3 27.2 41.4
The Group has a £20.0m revolving credit facility with National Westminster
Bank plc. The facility runs until 28 February 2029 with an option to extend
for a further year at the lenders' discretion.
8. Other reserves
Merger relief reserve Reconstruction reserve Translation reserve Total other reserves
£m £m £m £m
At 1 September 2024 14.6 (11.3) (2.6) 0.7
Other comprehensive income - - 1.1 1.1
At 28 February 2025 14.6 (11.3) (1.5) 1.8
Other comprehensive loss - - (1.0) (1.0)
At 31 August 2025 14.6 (11.3) (2.5) 0.8
Other comprehensive income - - 0.6 0.6
At 28 February 2026 14.6 (11.3) (1.9) 1.4
9. Foreign exchange
The foreign exchange rates applied during the period were:
H1 2026 H1 2025 FY 2025
Period end rate
US dollar 1.35 1.26 1.35
Euro 1.14 1.21 1.16
Yen 210 189 199
Average rate
US dollar 1.34 1.28 1.30
Euro 1.15 1.20 1.19
Yen 207 192 193
10. Acquisitions
Bolab
On 25 September 2024, the Group acquired 100% of Bolab Systems GmbH. The
initial consideration was €3.9m (£3.3m), which comprised €4.5m (£3.8m)
of cash consideration paid on completion plus €0.5m (£0.4m) retained
against potential warranties, less the working capital adjustment of €1.1m
(£0.9m) following completion in line with the closing mechanism agreed in the
sale and purchase agreement.
Contingent consideration of up to €6.0m (£5.0m) was potentially payable in
cash across two tranches for the two years following completion, subject to
meeting certain performance criteria for each year. No consideration was paid
at the end of the first performance period. The remaining contingent
consideration potentially payable at the end of the second performance period
is presented below.
Contingent consideration £m
At 31 August 2025 1.1
Unwind of discount 0.1
Exchange differences -
At 28 February 2026 1.2
Current 1.2
Non-current -
Venshure Test Services
On 2 April 2024, the Group acquired 100% of Venshure Test Services LLC. The
acquisition was completed for an initial cash consideration of $13.5m
(£10.7m), being $15.0m (£11.9m) initial consideration less $1.5m (£1.1m
discounted to present value) retained against potential warranties. Contingent
consideration of up to $15.0m (£11.9m) was potentially payable in cash across
two tranches for the two years following completion, subject to meeting
certain performance criteria for both years. No consideration was paid at the
end of the first performance period. The remaining contingent consideration
potentially payable at the end of the second performance period is presented
below.
Contingent consideration £m
At 31 August 2025 6.1
Cash paid (1.1)
Unwind of discount 0.2
Exchange differences (0.1)
At 28 February 2026 5.1
Current 5.1
Non-current -
11. Principal risks
The principal risks and uncertainties impacting the Group are described on
pages 58-60 of our Annual Report 2025. The Group's risk profile remains
unchanged as at 28 February 2026, save in respect of the following areas of
heightened risk:
- Downturn or instability in major geographic markets or market sectors
- Disruption in automotive market and loss of major customers
- Loss of key personnel
The potential impact on global markets as a result of the ongoing conflict in
the Middle East and in particular the suspension of crude oil shipping from
the region is difficult to quantify at this stage. The Group's direct exposure
to the conflict is expected to be limited but the more general inflationary
impacts of increasing energy costs and possible indirect effects on supply
chains will be kept under review and mitigated where possible through customer
price increases and supply chain planning.
Competition from Chinese OEMs has triggered a decline in business for European
OEMs importing into China, which has negatively impacted the volumes of our
VadoTech business that provides on-road testing services for European OEMs in
China. However, the Group's geographic diversification and critical nature of
its market-leading products and services have created a highly resilient
platform that is well-positioned to support customers navigating these dynamic
market conditions.
The CEO transition created a vacancy for the CFO role which prompted the
appointment of Andrew Lewis, an experienced FTSE 250 CFO as Interim CFO, in
February 2026. Some other leadership changes have been made which, while
unlikely to adversely impact the Group's customer relationships and trading
performance, need to be carefully managed alongside the search for a new
permanent CFO.
The Group's other risks as reported in the Annual report 2025 are: supply
chain disruption, failure to deliver new products, dependence on external
routes to market, acquisitions integration and performance, cybersecurity and
business interruption, competitor actions, loss of key personnel, threat of
disruptive technology, product liability, failure to manage growth, foreign
currency, counterparty risk, credit risk, intellectual property/patents and
environmental risk.
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