**Summary**
AB Dynamics PLC, a designer and manufacturer of advanced testing and simulation products for the global transport market, reported its unaudited interim results for the six months ended 28 February 2026. Key highlights include
**Financial Performance** Revenue decreased by 16% to ยฃ48.8 million due to delays in order intake and customer delivery requirements, as well as weaker volumes in the VadoTech Testing Services business in China. Adjusted EBITDA and operating profit also declined, but the operating margin was maintained at 18.6%. Net cash increased to ยฃ39.3 million.
**Strategic Review of VadoTech** Due to lower-than-anticipated customer activity in the VadoTech Testing Services business, the Group will undertake a strategic review of this business in the second half of the year. Exceptional items totaling ยฃ16.8 million, primarily a non-cash impairment charge, were recorded in relation to VadoTech.
**Innovation and Product Development** The Group continues to focus on innovation, with a technology roadmap aligned to regulatory and consumer ratings changes. The newly launched Delta S3 Spin simulator received its first order late in FY 2025 and further orders in FY 2026.
**Medium-Term Growth Ambitions** AB Dynamics remains committed to its medium-term growth targets, including average organic growth of 10% per year, margin expansion to greater than 20%, and strong cash generation.
**Current Trading and Outlook** The Group expects adjusted operating profit for FY 2026 to be in line with current market expectations, with a 55-60% revenue bias towards the second half of the year. The order book at the period end was ยฃ47 million, providing good visibility for the rest of FY 2026.
**Dividend** An interim dividend of 3.08p per share was declared, a 10% increase from the previous year, reflecting the Boards confidence in the Groups financial position and prospects.
Despite short-term challenges, AB Dynamics remains optimistic about its long-term growth prospects, supported by structural and regulatory drivers in the automotive sector.
### Key Observations:
1. **Revenue Decline**: Revenue decreased by 16% year-on-year, primarily due to delays in order intake and weaker volumes in the VadoTech Testing Services business in China.
2. **Margin Improvement**: Gross margin improved by 350 basis points to 63.7%, driven by operational improvements and positive revenue mix.
3. **Profitability**: Adjusted operating profit declined by 16%, but the adjusted operating margin was maintained at 18.6% due to cost mitigation actions.
4. **Cash Position**: Net cash increased significantly by 44% to ยฃ39.3m, reflecting strong working capital discipline.
5. **Debt**: Lease liabilities increased slightly by 6%, but overall debt remains minimal compared to cash reserves.