AB Dynamics

AB Dynamics Dividend Analysis and Summary

• Declared dividend: Final 6.36p per share, taking FY25 total DPS to 9.16p (up 20% YoY).
• Ex-dividend date: 15/01/2026 (derived from record date).
• Record date: 16/01/2026; Payment date: 30/01/2026.
• Coverage (FY25): DPS 9.16p covered ~8.8x by adjusted diluted EPS (80.3p) and ~5.6x by statutory diluted EPS (51.5p).
• Cash and funding: Net cash £41.4m; adjusted cash flow from operations £29.4m (cash conversion 106%). Proposed final dividend cash cost ~£1.5m.
• Policy: Board reiterates a progressive dividend policy.

• Sustainability: Very strong with low payout ratio (~11% of adjusted EPS) and robust balance sheet/net cash. High cash generation and 45% recurring revenue provide support. The order book of £32m (c. one quarter of FY26 revenue) adds visibility.
• Growth trajectory: FY25 DPS up 20% reflects confidence after 15% EPS growth and margin expansion to 20.3%. Management cautions that part of the FY25 margin uplift from mix is not expected to recur in FY26, and H1 FY26 may be softer; therefore, future DPS growth is likely to remain positive but more measured versus FY25’s step-up.
• Financial support: Adjusted operating profit up 15% to £23.3m, ROCE up to 20.2%, and ongoing strong cash conversion underpin the dividend. The proposed final is modest relative to cash resources and expected operating cash flow.
• Capital allocation: Stated priorities are organic investment, complementary M&A, and a progressive dividend. Given active M&A (and contingent consideration), the low payout prudently preserves capacity while still growing DPS.