AB Dynamics PLC (AIM:ABDP) shares plunged 23.7% to 813.92p after the transport testing specialist warned that customer delays and disruption linked to the Middle East conflict would hit annual revenue.
The company now expects revenue from continuing operations of £90 million to £95 million for the year ending 31 August 2026.
AB Dynamics said customer confidence had weakened during the second half, while logistics problems and disruption to automotive development programmes had increased. European carmakers have been particularly affected amid a series of potential restructuring announcements.
Although customer enquiries remain healthy, procurement decisions are taking longer, slowing order conversions and revenue at the Testing Products and Simulation divisions. Deliveries are also expected to be heavily weighted towards the end of the financial year, leaving working capital higher than previously forecast.
AB Dynamics expects to maintain an adjusted operating margin of 20%, in line with its medium-term plan, after reducing operating costs and discretionary spending.
The group will also exit VadoTech, its Chinese on-road testing business, after customer volumes under a new contract failed to improve. The contract will be terminated during the first half of the 2027 financial year.
VadoTech will be treated as a discontinued operation, reducing reported 2026 revenue by about £4 million.
AB Dynamics said its balance sheet remained robust, with net cash of £41.7 million at the end of June, allowing continued investment in innovation and sales despite the near-term disruption.
