13th Nov 2014 09:07
LONDON (Alliance News) - AB Dynamics PLC saw its shares rise early Thursday after it reported a big increase in pretax profit for its last financial year, driven by higher sales, particularly of its high-margin track test equipment, and said the current year had got off to a strong start.
The company, which designs and, manufactures testing and measurement products for vehicle suspension, brakes and steering used in automotive research and development reported a pretax profit of GBP2.7 million for the 12 months to end-August, up from GBP1.9 million a year earlier, as revenue rose to GBP13.8 million, from GBP12.2 million.
Its operating profit margin rose to 19.1%, from 15.6% in fiscal 2013, as its profitable track test equipment accounted for 68% of revenue, up from 60%.
The company, which listed on AIM in May 2013, is headquartered in Bradford on Avon and employs about 60 staff. It currently supplies all of the top twenty automotive manufacturers, including Honda, Toyota, Ford and Volkswagen, which use its products to test vehicle safety.
It said revenues from its track testing products had exceeded its expectations, buoyed by growth in its traditional markets in Europe and Japan, as well as "significant" sales growth in China. It said sales of its laboratory testing product, the Suspension Parameter Measuring Machine, remained in line with its forecasts.
"Since the beginning of the new financial year, trading has been in line with expectations with significant visibility provided by our existing order book for the remainder of the year," it said.
AB Dynamics is trying to build a new dedicated facility to support its growth, but had run into planning process delays. It has therefore leased a further 3,500 square foot of production space to meet the immediate need to support increased capacity demand, meaning it has created an extra 6,900 square foot of new office and production space, a 70% increase, since its initial public offering. It said this should be enough to see it through until the new facility is opened, which it expects to be in the third quarter of 2016.
"Subject to full planning permission being granted, the next year will see the company focus on finalising planning and design of the new factory HQ near our current facility in Bradford on Avon,2 it said.
The company said it had net cash of GBP4.9 million at the end of its last financial year, down from nearly GBP6.0 million a year earlier.
It has proposed a final dividend of 1.5 pence, taking its total dividend for the last year to 2.5 pence.
AB Dynamics shares were up 6.3% at 168.00 pence early Thursday, one of the best-performing stocks on the AIM All-Share index.
By Steve McGrath; [email protected]; @stevemcgrath1
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