Alternative Investment Market-listed “Industrial Engineering” company, which got incorporated in 1982 as a vehicle consultancy and whose shares entered the London Stock Exchange as on 23-May-2013, has created a fortune for its shareholders in over the past 5-years.
Created on the strong foundation by visionary leaders – AB Dynamics Plc- (AIM: ABDP) has made its shareholders wealthier many times of their investment in just 5-years. A quick analysis of FTSE AIM 100 company for the past 5-years exhibits that shares of AB Dynamics Plc have handed a humongous 1,288% return to its shareholders- moving from a share price of GBX 155.62 (adjusted close as on 06-October-2014) to GBX 2,160 (adjusted close an on 04-October-2019).
An amount of £10,000 invested 5-years ago in AB Dynamics Plc’s stocks is worth £1,38,799.5 now, it implies 5-years multiplier in GBP = 13.87x. Its shares have delivered a Compounded Average Growth Rate of 69% over the last five years, which is way ahead of its benchmark FTSE AIM 100 Index performance, both in absolute and CAGR terms. During the same time period, the group’s benchmark index FTSE AIM 100 has delivered an absolute price return of 38%, whereas in CAGR terms it has handed just 7% of return respectively.
Bradford on Avon, UK- headquartered AB Dynamics has recorded strong growth since inception to become one of the world’s most reliable supplier of the automotive test system. As on date, their clientele comprises the top 25 global automobile manufacturers. The group provides the world’s most comprehensive variety of automobile test and development system, with substantiated trust, efficient integration and technology roadmap that runs in parallel with a fast-changing programme requirement.
A quick 5-year financial performance analysis of AB Dynamics Plc
Over the past 5-years, the Industrial Engineering group’s revenue surged at a Compounded Average Growth Rate (CAGR) of 25%, from £12.17m in FY13 to £37.05m in FY18. Every year the group’s revenue has increased by more than 15% against their respective previous year revenue, gross profit leapt up to £18.47m in FY18 from £3.12m reported in FY13 and recorded a CAGR return of 43%. AB Dynamics Plc’s EBITDA grew with a CAGR of 33% to £7.88m in FY18 from £1.89m reported five years-ago and has consistently maintained an EBITDA margin above 15% throughout the past five years. Also, group’s Net Income during the period under consideration, surged with a CAGR of 38% to £7.01m in FY18 from £1.42m reported in the FY13 and consistently maintained Net Margin above 10% throughout the period, however, since FY14 Net Margin reported by the group year-after-year have remained above 15%.
From the Return on Equity (ROE) perspective, the group’s performance has been substantially higher, as in the past years the group has reported consistency, and every year its reported ROE was above 15%. The group has zero debt, which reflects no balance sheet risk for the company.
The above-discussed measures reflect a sound financial performance and strong operational efficiency of the group. The consistent consecutive revenue growth above 15%, EBITDA Margin above 15%, Net Income Margin above 10% and ROE above 10% reflects sound operational and financial efficiency of the management, also these matrices are generally very uncommon and are difficult to find easily, all together in one company. Corporations who possess all these matrices are unusual companies created by uncommon entrepreneurs.
Latest Financial Performance Highlights: FY19
Recently (on October 02, 2019), automotive test system provider reported its pre-close trading update for the financial year ended on August 31, 2019. In the statement, the group stated that it continued to deliver strongly during the second half of the FY19 and estimates to post revenue growth and adjusted pre-tax profit growth for the FY19 ended on August 31, 2019, well above the market expectations.
The group during the year under consideration benefited from the continuation of the trend recorded in the second half of the FY19 and market conditions during the period was favourable led by significant structural and regulatory tailwinds.
Also, in the exchange filing, the group announced that Sarah Matthews-DeMers, the new Chief Financial Officer of the AB Dynamics Plc, would take charge of his office on November 04, 2019.
At the time of writing (as on October 07, 2019, at 12:15 PM GMT, before the market close), shares of the ABDP were at GBX 2,160.0 and were trading flat against the previous closing level. At the current trading level mentioned above, the outstanding market capitalisation of the group stood at around £484.26m with 22.42m shares in issue. Over the year-ago period, its shares surged approximately 52%, on a YTD basis and delivered a price return of 55.6% while have given up 22.86% in the past one months respectively. In the past 52-weeks, its shares have registered a high price of GBX 2,850.0 and a low of GBX 1,090.39, respectively and at current trading level, the stock was quoting approximately 24% below its 52w high price level and around 98% above the 52w low price level.
In the past five years, shares of the AB Dynamics Plc ended 472 times up, 418 times low and remained unchanged for 375 times against their respective previous closing prices and the stocks’ 5-year Up/Down ratio stood at 472/418 or 1.13, reflecting rise exceeded fall and during the same period stock registered a high of GBX2,850.0 as on September 03, 2019 and a low of GBX 146.7 as on October 14, 2014, respectively. Also, in the past one year, its shares ended 93 times up, 83 times down and 76 times unchanged against its corresponding previous closes, with Up/Down ratio standing at 93/83 or 1.12, reflecting that in a year-over period also rise exceeded fall.
From the technical standpoint, ABDP’s Price/SMA-200 ratio stood at 1.06x, whereas benchmark FTSE AIM 100 Price/ SMA-200 ratio stood at 0.93x, and the 14-day Relative Strength Index (RSI) recovering from oversold territory.
At the current trading level, the Price-to-Earnings ratio of the ADBP stood at 42.82x, and the dividend yield of the company at 0.18%, respectively.