Earnings Release • Apr 28, 2015
Earnings Release
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RNS Number : 4490L
AB Dynamics PLC
28 April 2015
28 April 2015
AB Dynamics plc
("ABD" or the "Company" or the "Group" )
Interim Results for the 6 months ended 28 February 2015
AB Dynamics plc (AIM:ABDP), a designer, manufacturer and supplier of advanced testing systems and measurement products to the global automotive industry, is pleased to announce its Interim Results for the six month period to 28 February 2015.
Financial Highlights
· Revenues increased 13% to £7.56 million (H1 2014: £6.69 million)
· Profit Before Tax increased 30% to £1.51 million (H1 2014: £1.16 million)
· Net Cash at 28 February 2015 of £7.03 million (H1 2014: £4.55 million)
· Interim dividend increased 10% to 1.1p per ordinary share (H1 2014: 1.0p)
Operational Highlights
· Company receives first Brazilian order for SPMM
· New interim manufacturing facility on-line and generating efficiencies
· AB Dynamics Japan now established to serve all Company product lines in the region
· Track testing demand rising with Advanced Driver Assistance Systems (ADAS) targets
· Awarded conditional grant of up to £2.3 million from UK government Regional Growth Fund
Tim Rogers, Managing Director of AB Dynamics, commented:
"For the past six months the Company has delivered significant revenue and profit growth, combined with operational efficiencies leading to improved gross margins and cash generation. The Group continues to go from strength to strength: the progress of the new factory remains on track with completion expected in the latter part of 2016; and the Company continues to successfully attract key personnel having passed the 60 employees landmark. With a strong order book in place and continuing product development, the Board is pleased to announce an increased interim dividend of 1.1p per share."
For further information please contact:
| AB Dynamics plc Tim Rogers, Managing Director Tony Best, Chairman |
01225 860 200 |
| Cairn Financial Advisers LLP (Nomad) Tony Rawlinson Avi Robinson |
0207 148 7900 |
| Charles Stanley Securities Limited (Broker) Dugald J. Carlean Karri Vuori |
0207 149 6000 |
| Newgate (PR) Adam Lloyd Tim Thompson Andre Hamlyn Helena Bogle |
0207 653 9850 |
Overview of AB Dynamics plc
ABD is a leading designer, manufacturer and provider of advanced testing and measurement products for vehicle suspension, brakes and steering to the global automotive research and development sector. The Group was founded in 1982 and listed on AIM in May 2013. The Group is headquartered in Bradford on Avon employing over 60 staff. ABD currently supplies all of the top twenty automotive manufacturers, including Honda, Toyota, Ford and Volkswagen, who routinely use the Group's products to test vehicle safety.
Managing Director's and Chairman's Statement
We are pleased to report on a successful first half of the financial year for AB Dynamics. The continued strong performance resulted in profit before tax for the half year to 28 February 2015 of £1.51 million (2014: £1.16 million), an increase of 30%, and revenues of £7.56 million (2014: £6.69 million); an increase of 13%. Cash at the period end was £7.03 million (2014: £4.55 million).
Over the last six months, the considerable efforts of the Group have resulted in an improved gross margin driven in part, by manufacturing efficiencies derived from our new robot assembly facility - which came on line last year - and in part, by the improved margins obtained from our recently introduced new Track Testing products. The business has benefited from the recent establishment of AB Dynamics MF Japan Ltd, allowing the Group to support all of its products in the region via one single entity.
We see the global automotive industry investing more money in R&D with both regulatory factors and global competition driving the industry to develop new cars in a timely and efficient way.
Our Lab Testing and Track Testing products enable car companies to develop and design vehicles that are safe and pleasing to drive by factoring in precise dynamic measurements derived on their products from our machines.
The European and Japanese car makers continue to invest heavily in the field of Advanced Driver Assistance Systems (ADAS), where our package of Driverless Robots synchronising with our latest Soft Targets, assist the automotive industry in meeting the latest vehicle passenger and pedestrian safety standards, such as Euro NCAP.
We remain committed to building and establishing our new high-tech manufacturing and office facility. Now that many of the planning obstacles have been overcome we are optimistic that we will complete the build in the latter part of 2016.
The Company is pleased to have applied for and to have received in this period a conditional offer for UK Government Regional Growth Fund money of up to £2.3 million. What the Company will actually receive will be dependent on a protracted due diligence phase and meeting qualifying criteria, however it is expected that the funds will be applied to building our new facility and enabling us to embark on a more aggressive product development program.
The Group continues to attract and retain some of the very best talent in UK engineering, with several of our colleagues having been with the Company for more than 20 years. As in previous years we would both like to thank all of the team for their continued hard work and dedication.
Current trading is in line with management expectations and we remain confident of meeting our financial targets this financial year.
Our strong balance sheet and cash generation provides a good basis for an increase in the dividend and as indicated in our Trading Update on 20 March 2015, we are pleased to announce that the Directors are declaring an interim dividend of 1.1p per ordinary share. The ex-dividend date will be 7th May, the record date 8th May and the payment date 22nd May 2015.
| Anthony Best Chairman 28 April 2015 |
Tim Rogers Managing Director 28 April 2015 |
AB Dynamics plc
Unaudited consolidated statement of comprehensive income
for the six months ended 28 February 2015
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
28 February 28 February 31 August 2015 2014 2014
£ £ £
Notes
Revenue 7,559,015 6,694,460 13,846,562
Cost of sales (5,275,393) (4,895,035) (9,816,570)
Gross profit 2,283,622 1,799,425 4,029,992
Administrative expenses (757,955) (651,413) (1,378,718)
Operating profit 1,525,667 1,148,012 2,651,274
Net finance income and (costs) (19,275) 16,362 25,692
Profit before taxation 1,506,392 1,164,374 2,676,966
Income tax expense (241,686) (292,852) (525,055)
Profit after taxation and total
comprehensive income for the period 1,264,706 871,522 2,151,911
Earnings per share-Basic 2 7.53p 5.34p 13.08p
Earnings per share-Diluted 2 7.12p 4.90p 12.11p
Unaudited Unaudited Audited
28 February 28 February 31 August 2015 2014 2014
£ £ £
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 1,441,445 1,141,123 1,219,983
CURRENT ASSETS
Inventories 2,445,096 1,831,655 1,998,831
Trade receivables 3,008,620 1,933,902 4,339,755
Other receivables, deposits and prepayments 372,491 407,351 185,007
Amount owing by contract customers 959,518 1,884,811 949,197
Cash and cash equivalents 7,027,164 4,550,221 4,896,206
13,812,889 10,607,940 12,368,996
TOTAL ASSETS 15,254,334 11,749,063 13,588,979
EQUITY AND LIABILITIES
Called up share capital 168,357 163,470 167,757
Share premium account 2,436,910 2,336,528 2,385,910
Reconstruction reserve (11,284,500) (11,284,500) (11,284,500)
Merger relief reserve 11,390,000 11,390,000 11,390,000
Retained earnings 8,687,650 6,537,891 7,666,718
TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF
THE COMPANY AND TOTAL EQUITY 11,398,417 9,143,389 10,325,885
NON-CURRENT LIABILITIES
Deferred tax liabilities 133,731 117,048 79,273
CURRENT LIABILITIES
Trade and other payables 3,420,627 2,251,536 2,913,843
Derivative financial instrument 41,790 - -
Provision for taxation 259,769 237,090 269,978
3,722,186 2,488,626 3,183,821
TOTAL LIABILITIES 3,855,917 2,605,674 3,263,094
TOTAL EQUITY AND LIABILITIES 15,254,334 11,749,063 13,588,979
Share Share Merger Reconstruction Retained Total
capital premium relief reserve profits equity
reserve
£ £ £ £ £ £
At 31 August 2014 167,757 2,385,910 11,390,000 (11,284,500) 7,666,718 10,325,885
Share based payment - - - - 7,861 7,861
reserve
Profit after taxation and
Total comprehensive
Income for the financial year - - - - 1,264,706 1,264,706
Dividend paid - - - - (251,635) (251,635)
Issue of shares, net of share 600 51,000 - - - 51,600
issue costs
At 28 February 2015 168,357 2,436,910 11,390,000 (11,284,500) 8,687,650 11,398,417
At 31 August 2013 163,070 2,302,528 11,390,000 (11,284,500) 5,650,416 8,221,514
Share based payment - - - - 15,953 15,953
reserve
Profit after taxation and
Total comprehensive
Income for the financial year - - - - 871,522 871,522
Issue of shares, net of share 400 34,000 - - - 34,400
issue costs
At 28 February 2014 163,470 2,336,528 11,390,000 (11,284,500) 6,537,891 9,143,389
At 31 August 2013 163,070 2,302,528 11,390,000 (11,284,500) 5,650,416 8,221,514
Share based payment - - - - 27,861 27,861
reserve
Profit after taxation and
Total comprehensive
Income for the financial year - - - - 2,151,911 2,151,911
Dividend paid - - - - (163,470) (163,470)
Issue of shares, net of share 4,687 83,382 - - - 88,069
issue costs
At 31 August 2014 167,757 2,385,910 11,390,000 (11,284,500) 7,666,718 10,325,885
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
28 February 28 February 31 August 2015 2014 2014
£ £ £
Cash flow from operating activities
Profit before taxation 1,506,392 1,164,374 2,676,966
Adjustments for:-
Depreciation of property, plant and equipment 86,036 57,234 135,645
Loss on sale of property, plant and equipment - - 257
Finance income and costs 41,790 - -
Interest income (22,515) (16,362) (25,692)
Share based payment 7,861 15,953 27,861
Operating cash flows, before
working capital changes 1,619,564 1,221,199 2,815,037
Decrease/(increase) in inventories (446,265) (345,265) (512,441)
Decrease/(increase) in trade and
other receivables 1,133,330 (1,089,891) (2,337,786)
(Decrease)/increase in other payables 506,784 (911,557) (249,250)
Cash flow (used in) / from operations 2,813,413 (1,125,514) (284,440)
Interest received 22,515 16,362 25,692
Income tax paid (197,437) (178,955) (416,046)
Net cash flow (used in) / from operating 2,638,491 (1,288,107) (674,794)
activities
Cash flow used in investing activities
Purchase of property, plant and equipment (307,498) (186,248) (344,942)
Sale of property, plant and equipment - - 1,167
Net cash flow used in investing activities (307,498) (186,248) (343,775)
Cash flow used in financing activities
Dividends paid (251,635) - (163,470)
Proceeds from issue of share capital, net of share 51,600 34,400 88,069
issue costs
Net cash flow from/(used in) financing activities (200,035) 34,400 (75,401)
Net (decrease) / increase in cash and cash 2,130,958 (1,439,955) (1,093,970)
equivalents
Cash and cash equivalents at beginning of period 4,896,206 5,990,176 5,990,176
Cash and cash equivalents at end of period 7,027,164 4,550,221 4,896,206
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 Holt Road, Bradford upon Avon, Wiltshire, BA15 1AJ.
The principal activity is the specialised area of design and manufacture of test equipment for vehicle suspension, steering, noise and vibration. The company also offers a range of services which include analysis, design, prototype manufacture, testing and development.
The interim financial information has been prepared in accordance on the basis of the accounting policies set out in the annual report and accounts for the year ended 31 August 2014, which have been prepared in accordance with International Financial Reporting Standards as adopted for use by the European Union. The interim accounts are unaudited and do not constitute statutory accounts as defined in Section 434 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 statements for the year ended 31 August 2014, upon which the auditors issued an unqualified opinion, and which have been delivered to the registrar of companies.
The interim financial information has been drawn up using accounting policies and presentation expected to be adopted in the Group's full financial statements for the year ended 31 August 2015. Any new standards that will be adopted in full for the first time in the year-end financial statements did not have a material impact on this interim financial information.
The interim financial information for the six months ended 28 February 2015 was approved by the Board on 27th April 2015.
The Directors are declaring an interim dividend of 1.1p per ordinary share. The ex-dividend date will be 7th May, the record date 8th May and the payment date 22nd May 2015.
2. 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 2015 2014 2014
£ £ £
Profit after tax attributable to
owners of the company 1,264,706 871,522 2,151,911
Weighted average number of shares
Basic 16,804,480 16,322,446 16,452,254
Diluted 17,772,645 17,772,645 17,772,645
Earnings per share
Basic 7.53 pence 5.34 pence 13.08 pence
Diluted 7.12 pence 4.90 pence 12.11 pence
3. Analysis of revenue by geographical area and major customers
Material revenues attributable to individual foreign countries are as follows:
| Unaudited 6 months ended February 2015 |
Unaudited 6 months ended February 2014 |
Audited Year ended August 2014 |
|||
| £ | £ | £ | |||
| United Kingdom | 198,041 | 1,030,456 | 1,705,775 | ||
| Rest of the European Union | 2,632,580 | 2,109,872 | 3,752,538 | ||
| North America | 742,440 | 555,268 | 1,388,510 | ||
| Rest of the World | 3,985,954 | 2,998,864 | 6,999,739 | ||
| 7,559,015 | 6,694,460 | 13,846,562 |
Revenues derived from major customers, which individually represent 10% or more of total Company revenue are as follows:
| Unaudited 6 months ended February 2015 |
Unaudited 6 months ended February 2014 |
Audited Year ended August 2014 |
|||
| £ | £ | £ | |||
| Customer A | 85,785 | 930,522 | 1,411,745 | ||
| Other customers | 7,473,230 | 5,763,938 | 12,434,817 | ||
| 7,559,015 | 6,694,460 | 13,846,562 |
There were no material non current assets located outside the United Kingdom.
Revenues are derived from the following:
| Revenue from sale of goods | 5,984,379 | 4,525,466 | 9,609,493 | ||
| Revenue from construction contracts | 1,574,636 | 2,168,994 | 4,237,069 | ||
| 7,559,015 | 6,694,460 | 13,846,562 |
4. Share Capital
On 3rd December 2014 the Company announced that Cairn Financial Advisers LLP had exercised warrants to subscribe for 60,000 new ordinary shares of 1p each at a price of 86 pence per share. These warrants were granted to Cairn at the time of the Company's admission to AIM in May 2013. Following the issue of the new ordinary shares the company's enlarged issued share capital now comprises 16,835,640 shares.
This information is provided by RNS
The company news service from the London Stock Exchange
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