Strong performance continues
AB Dynamics’ (ABD) trading update for the first six months of FY 2019E states that revenues and adjusted operating profits are expected to be ‘significantly ahead’ of the same period last year. Consequently, management expects the full year to be in line with market (and its own) expectations. Market demand for track testing products and ABD’s own operational improvements are cited as the main drivers of a continuation of the strong performance seen in FY 2018. The announcement also highlights an updated strategy, which will be presented at the time of the interim results – CEO Dr James Routh notes that the focus is on “successfully implementing the strategy which builds on our strong foundations to create long-term sustainable growth.” Noting the strong first half performance and the in-line trading update, we bring our revenue estimates up from the lower end of market expectations, adding 8% and 5% for FY 2019E and FY 2020E respectively. We adjust EBITDA to reflect previous guidance on investment in growth opportunities.