AB Dynamics, the designer and manufacturer of testing, simulation and measurement equipment for the global transport market, said it now expects group revenue from continuing operations for the year ending 31 August (FY26) to be in the range of £90-95m.
AB Dynamics' shares plunged 23.9% to 811.0p after the group cut FY26 revenue guidance to £90-95m and said it would exit its Chinese VadoTech on-road testing unit. The group said the VadoTech exit would reduce FY26 reported revenue by approximately £4m and net cash stood at £41.7m as of 30 June.
The Wiltshire-based group also confirmed it has agreed to terminate its contract and exit VadoTech, its Chinese on-road testing business, after customer volumes failed to recover following a half-year strategic review.
The exit, expected to complete in the first half of FY27, will see VadoTech classified as a discontinued operation, reducing FY26 reported group revenue by approximately £4m.
AB Dynamics said trading conditions worsened through the second half, citing reduced customer confidence, Middle East-related logistics disruption and delays to development programmes among European carmakers, several of which have flagged potential restructuring.
Customers are lengthening procurement decisions, the company said, hitting short-term order conversion within its Testing Products and Simulation divisions despite a healthy sales pipeline and robust enquiry levels.
Active cost management should offset much of the operating leverage hit from lower revenue, with adjusted operating margin still expected at 20%, in line with the group's medium-term plan.
Net cash stood at £41.7m as of 30 June, though working capital is expected to be higher than planned as customer deliveries shift towards the end of the financial year.
"The strength of the Group's balance sheet provides the Board with confidence to continue to invest in innovation and sales and marketing resource," the company said, pointing to long-term structural growth drivers in its key markets.
