28th Jul 2026 11:54
(Alliance News) - AB Dynamics PLC shares fell on Tuesday after it forecast lower revenue in light of an "increasingly more challenging" trading environment.
The stock was down 24% at 810.00 pence in London late on Tuesday morning.
The Wiltshire, England-based supplier of advanced testing, simulation and measurement products also said it has agreed to exit VadoTech, its Chinese testing services business. This followed VadoTech being placed under strategic review earlier in the year, due to customer volumes not developing as expected under its new contract.
"Since the half year, customer volumes have remained weak and as a result we have reached an agreement with the customer to terminate the current contract and exit the business," AB Dynamics said.
The firm added that it expects group revenue for the financial year ending August 31 to be approximately GBP4 million lower due to the classification of VadoTech as discontinued.
AB Dynamics also said that despite a "resilient" first-half performance, "the overall trading backdrop has become increasingly more challenging during the second half".
It attributed this to "reduced customer confidence and logistics headwinds arising from the Middle East conflict, as well as increased disruption to development programmes within the automotive market, particularly for European original equipment manufacturer customers, as evidenced by several recent potential restructuring announcements."
As a result, AB Dynamics said order intake has been lower in the fourth quarter despite its sales pipeline remaining "healthy," as clients lengthen their procurement decision timelines. This has adversely impacted short-term order conversion and revenue generation within Testing Products and Simulation businesses.
AB Dynamics consequently expects revenue for continuing operations of between GBP90 million and GBP95 million for financial 2026, down from GBP104.2 million the previous year, or from GBP114.7 million when including results from VadoTech.
However, the company added that it has been actively managing costs, and "believes it will be able to mitigate a significant degree of the adverse operational gearing impact of the lower than expected revenue".
It forecast a 20% adjusted operating margin for the year, slightly down from 20.3% in financial 2025 but "consistent with the group's medium-term plan."
"Whilst increasing geopolitical disruption is impacting near term performance, the long term structural drivers of growth in the group's key markets remain compelling, underpinned by significant regulatory and technological developments," AB Dynamics said.
By Emma Curzon, Alliance News reporter
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