Insider: bosses buy bargain AIM share and booming builder

Growth targets at AB Dynamics (LSE:ABDP) have been given £45,000 of boardroom backing after directors bought shares in the vehicle testing and simulation firm at the cheapest price in four years.

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Sarah Matthews-DeMers, who recently stepped up to replace James Routh as chief executive after six years as finance boss, led the buying of the AIM-listed shares with dealings at 1,151p.

She was joined by experienced finance director Andrew Lewis, who is at the Wiltshire-based firm on an interim basis but has still decided to take a stake. The other buyer was general counsel Miles Ingrey-Counter.

Their purchases followed Tuesday’s half-year results, which showed operating profit fell in line with expectations by 16% to £9.1 million after orders were delayed amid last year’s tariffs disruption. Revenues dropped 16% to £48.8 million.

AB Dynamics reiterated guidance for a stronger second half of the year, adding that it viewed the events of the last 12 months as “a short-term timing difference” as opposed to any fundamental change in structural growth drivers.

The company backed medium-term targets it set out in November 2024, including average organic growth of 10% a year across core markets and further margin expansion to greater than 20%. The margin figure was unchanged at 18.6% in last week’s results.

A further sign of confidence in the group’s financial position and prospects came with a 10% rise in the interim dividend to 3.08p a share. This is due to be paid on 15 May.

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Matthews-DeMers said: “The long-term growth opportunity for AB Dynamics remains compelling and our strategy is unchanged; going forward we expect evolution not revolution with an enhanced focus on innovation, excellence and continuous improvement.”

AB Dynamics has no operating footprint in the Middle East but is monitoring the potential impacts from broader risks to trade, cost inflation and supply chain disruption.

Demand for AB Dynamic’s products is underpinned by the increasing volume and complexity of vehicle safety tests, as well as the range of vehicle types including electric, hybrid, hydrogen and autonomous.

The company has 14 facilities in six countries across Europe, North America and Asia, with more than 150 automotive clients. Just under half its revenues came from Asia Pacific in 2024/25.

Testing products is the largest of its three divisions, with test tracks used to evaluate the performance of active safety systems, autonomous technologies and vehicle durability.

The group also provides physical simulators as well as advanced, physics-based simulation software for use by car manufacturers and motorsport teams.

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The shares were 2,250p in May 2024 and 1,865p prior to the announcement of US tariffs before they fell to 1,025p at the end of March. This compares with broker Peel Hunt’s post-results price target of 2,400p and Shore Capital at 2,100p.

The latter pointed out that budgets for safety and advanced driver assistance systems are more protected given the need of manufacturers to remain innovative.

Shore added following last week’s results: “We believe the recent weakness in shares is significantly overdone, and we see potential for earnings growth and re-rating on strategic delivery.”

The stock trades on 14.1 times 2026 earnings, which Berenberg said highlighted how inexpensive the group is when considering a strong net cash position of £39.3 million. The City firm has a price target of 2,060p.

Scoring a Try

Galliford Try Holdings (LSE:GFRD) shares have been backed to revisit February’s record level after the construction firm’s senior independent director disclosed an investment worth £21,000.

Former Spirax finance chief Kevin Boyd, who has been a Galliford board member since March 2024, bought shares on Thursday at a price of 528.4p.

His dealings compared with a near-record price of 572p after the building and infrastructure projects business boosted City guidance in interim results on 4 March.

Galliford highlighted strong market positions in highways, education, defence, custodial and health, as well as its successful transition to the water industry’s 2025-30 investment cycle.

Revenues lifted 1.3% to £934.9 million, with a 3.2% divisional adjusted operating margin further progress towards a 2030 strategic target of 4%. Adjusted profit improved 20.5% to £24.7 million, while the interim dividend paid on 10 April rose 18.2% to 6.5p a share.

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Despite the momentum, the shares finished March down at 479.5p. A recovery in line with the wider FTSE 250 index has taken place over the past fortnight, although the shares are still 9% below the record close of 577p set on 20 February.

Berenberg raised its price target from 620p to 650p following the results, having increased its earnings per share forecasts for 2026 by 3% and by 7% for 2027 and 2028.

The City bank highlighted Galliford’s strong position in areas that are critical to local and national government spending plans, as well as the extensive participation in long-term frameworks across its businesses.

Panmure Liberum, which is also at 650p, noted that Galliford’s investments are valued at 38p per share and the average net cash at 196p per share.

It added: “The market is attributing insufficient value to the Building and Infrastructure businesses, which is unjustified given management has returned the business to profitability while implementing a strict low-risk strategy.”

Graeme Evans owns AB Dynamics shares