Ab Dynamics PLC (LON:ABDP) Chief Executive Officer Tim Rogers caught up with DirectorsTalk for an exclusive interview to discuss their final results, the new factory & offices, main areas of focus, the outlook for the next financial year and the company’s new CEO.
Q1: Congratulations on the strong set of results, can I ask what has driven the growth?
A1: The key growth really is coming from the continual spend by the automotive R&D companies on basically developing new and better products. Last year, $110 billion was spent on R&D by the car companies and as they move their markets towards more autonomous and advanced driver systems, we’re providing the technology that lets them test it and bring it to market.
Equally, we’ve seen the growth in China, very much a regional growth opportunity for us and they continue to invest very heavily in development of new cars, more for their own domestic market rather than a market for export and that’s continuing into next year with our current order book.
Q2: Ab Dynamics is moving into a new £8.4 million state of the art factory and offices, how were you hoping this will add to your operation?
A2: In the past 4 years, we’ve had to split the company up as we’ve grown so quickly, and we had about six sites spread around the Wiltshire countryside and without a doubt, the company works a lot better when you’ve got all the design functions under one roof.
So, what the new place has bought us is a large office space and a large development space where the mechanical, electronics, electronic software, design all under one space and already we’re starting to see the integration between the teams as it used to be some time back when we were all together. The other thing is an ability now to be able to tie up some of the manufacturing and just improve some of the manufacturing processes to cope with the order book.
Q3: What are the main focus areas for Ab Dynamics in the next few months?
A3: I think the key thing we’re going to be seeing over the next few months is our expansion in terms of the support offices, we’re opening up an office in Germany in the next few weeks, there’s over 700 robot systems out in the marketplace and they’re increasingly getting more sophisticated and there is a demand for us to be able to support those products in the field. We also see an opportunity to be able to get some recurring revenue by doing that so very much the focus is keeping with the reseller model in terms of sales but taking control of the market via support that we offer both the reseller and the customer in the regions like China, Korea, Japan, America and Europe so that’s a big area of expansion.
The other area of growth to us is the development of the advanced simulator, we’re well down the road now of getting a product that’s ready for market. We think that the market is ready for this kind of product because the idea of virtual testing is becoming more and more acceptable as the software gets better and better. That’s something that’s quite useful for us because it doesn’t just tie in the simulator itself, but it also ties in some of the products we make so the data generated by the robots on the track can be taken and played on the simulator and that’s somewhat of a unique proposition for us as a company to offer our customer.
So, they’re the key areas really of development and also expansion of the new product development as well is an area where we’re going to use some of the proceeds from last years to continue to refresh and develop new products for the next 2/3/4 years.
Q4: How is trading going and what’s the outlook for the next financial year?
A4: Trading is still moving forward, I can say we managed to grow our adjusted profit quite significantly, we obviously do carry this option charge which is a non-cash charge, but it has to be recognised in our accounts. More importantly, we are seeing a big demand for our products, the order book is probably at an all-time high and one of the key jobs now is to not let customers down and make sure we fill that order book over the next year.
Q5: Back in August, you said that you were stepping down and today you referred to the new CEO taking Ab Dynamics forward, when should we expect to hear news on the new CEO?
A5: We should be making a decision and making an announcement quite quickly and we’ve had a pretty good set of candidates come to see us, I think the company can attract good calibre people. My own position is that we need someone now who can take the company through to the revenue targets we’re going to need in the next 3-4 years and it need a set of skills that perhaps this person needs to possess. The company is ready to grow to the next step, but it needs a different form of leadership, so our hope is that with the candidates we’ve got to look at, we should be able to make a selection quite quickly and hopefully we’ll be making that announcement in the near future.
