AB Dynamics’ CMD provided a clear and detailed run-through of management’s value creation plan. The ambition is to double revenue and triple operating profit over the medium-term (FY24 base), from a combination of organic growth (c.10% CAGR), operating margin expansion (to >20%) and M&A. Much of the focus of the CMD was on market drivers and opportunities for organic growth. We came away with renewed confidence in our investment thesis which highlights the group’s strong IP, track record of growth and long-term potential, both organically and via M&A. The shares trade on a CY25e PER of 22.7x, after de-rating by c.30% in the last 12 months. Yet the company hasn’t set a foot wrong in that period and looking ahead we forecast >30% profit growth (adj. EBIT to FY27). BUY.
