AB Dynamics trading well, acquires Ansible Motion
AB Dynamics announced the £19.2m acquisition of Ansible Motion on Wednesday, as it reported a “strong” trading performance in its second half.
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The AIM-traded firm said it managed continued supply chain disruption through the 12 months ended 31 August, to deliver strong organic growth and another record half-year for sales.
As a result, the board said it now expected to report revenue for the financial year of around £80m, representing year-on-year growth of about 22%.
“With robust margin performance through the second half, full year adjusted operating profit is also anticipated to be ahead of current market expectations,” the directors said in a statement.
The group said it maintained its track record of strong operating cash conversion, with net cash at year-end of £29m, up from £22.3m a year earlier, after capital investment of £4m.
“Despite the significant sales growth throughout the year, order intake continued to be strong and resulted in another period of positive book-to-bill ratio,” the board added.
“Whilst mindful of continued uncertainty in the wider economic backdrop, this provides good momentum as the business enters the 2023 financial year.
At the same time, AB Dynamics announced the completed acquisition of Ansible Motion for an initial consideration of £19.2m.
It described Ansible Motion as a “leading provider” of advanced simulators to the global automotive market.
Its products are used for a range of applications, including the evaluation of advanced driver assistance systems (ADAS), autonomy, vehicle dynamics, powertrain development and motorsport.
Founded in 2009 and based in Norfolk, Ansible Motion was already a long-standing partner of rFpro, which AB Dynamics acquired in 2019.
The maximum consideration payable for Ansible would be £31.2m, comprising an initial cash consideration of £16m, and £3.2m of new ordinary shares in AB Dynamics issued to the vendors.
AB Dynamics said the acquisition was completed on a cash-free, debt-free basis with the initial consideration funded from its existing cash resources, and short-term use of part of its revolving credit facility.
Conditional consideration of up to £12m would be payable in cash subject to certain performance criteria being met in the year ending 31 August 2023.
Based on unaudited accounts, for the year ended 31 March Ansible Motion generated revenue of £8m, EBITDA of £1.9m and an operating profit of £1.8m.
Its Net assets as at 31 March totalled £4.1m.
AB Dynamics’ board said it expected the acquisition to be earnings-enhancing in the 2023 financial year, with revenues expected to be around £12m based on the existing order-book and “strong” order pipeline, with adjusted operating profit of about £2.2m.
Ansible Motion was acquired from its three shareholders - Kia Cammaerts, Jonathan Walker and Robert Stevens - with Cammaerts and Stevens remaining in the business as managing director and chief engineer, respectively.
“The business has performed strongly against a backdrop of continued challenging market conditions and demonstrates the resilience of our business model,” said chief executive officer Dr James Routh.
“The acquisition of Ansible Motion is another important milestone in our ongoing strategic development and supports the group's strategic initiatives by broadening the scope of the Group's product offering, strengthens our position in the strategically important global simulation market, and enhances our capabilities in research and development, and manufacturing.
“Ansible Motion is a business we have known for a long time, and has an outstanding reputation for providing customer focussed driving simulation solutions and, coupled with our existing simulator business and our world class simulation software rFpro, this acquisition positions us as a market leader with genuine scale to drive significant continued growth in the simulation sector.”
At 1418 BST, shares in AB Dynamics were up 6.25% at 1,304.2p.
Reporting by Josh White at Sharecast.com.