Today’s pre close trading update points to FY25 (Aug Y/E) adj. EBIT slightly (c.2%) ahead of market expectations. Management action and revenue mix has supported a significant step-up in the group’s operating margin (at least +180bps, to >20% vs SCMe 18.5%) notwithstanding some order deferrals resulting in lower than expected revenues. Positively customer activity has picked up towards the end of the year with a healthy order book providing good trading momentum into FY26. Year-end net cash of £41.4m also exceeded expectations (SCMe £31.1m). Positives outweigh the negatives in today’s update and our investment case remains unchanged. While the CEO transition has unsettled investors (share price down 20.5% rel. last 3 months) fundamentally this doesn’t change our view that AB Dynamics is a high quality, unique proposition with a strong moat. BUY reaffirmed.
