9 July 2012
XP Power Limited
("XP Power" or "the Group")
XP Power, one of the world's leading developers and manufacturers of critical
power control components to the electronics industry, is today issuing a
trading update for the quarter ended 30 June 2012.
As detailed in both our 2011 Final Results announcement and first quarter
Interim Management Statement ("IMS"), following comparatively weak order intake
in the final quarter of 2011 we expected a reduction in revenues and therefore
factory utilisation in the first half of 2012. Consequently, Group revenues for
the six months ended 30 June 2012 decreased by 10% from the same period in
2011. In constant currency the decline was 11%.
While the environment for capital goods spending remains subdued, the stronger
sequential order intake first noted in the Q1 IMS has continued, with bookings
for the first half of 2012 being 16% ahead of the second half of 2011. We
therefore expect stronger revenues in the second half of 2012 than that
achieved in the first half, as these orders enter production.
Our product mix has continued to improve, with own design products representing
60% of revenue in the first half versus 55% of revenue for the first half of
2011. While this will have a positive impact on gross margins, the improvement
in product mix will not be sufficient to compensate for the reduced gross
margins caused by lower factory loading in the first half and the previously
reported start-up costs of the new Vietnam facility.
Our newly commissioned factory in Vietnam commenced production of its first
magnetic components during the first quarter, as planned. We expect the Vietnam
facility to reach a break even position by the end of the current financial
Net debt was £15.4 million at 30 June 2012 compared to £19.6 million at 30 June
2011. Using the exchange rates prevailing at 30 June 2011, net debt at 30 June
2012 would have been £14.8 million.
An increased dividend for the second quarter of 11 pence per share (2011: 10
pence per share) will be paid on 11 October 2012 to shareholders on the
register at 7 September 2012.
Customers are continuing to place orders at a significantly higher rate than
that seen in the second half of 2011. Against this background, we currently
anticipate that second half revenues and earnings will be modestly improved
from the second half of 2011 and substantially higher than those achieved in
the first half of the current year.
XP will issue its interim statement for the six months to 30 June 2012 on 23
- Ends -
Duncan Penny, Chief Executive +44 (0)7776 178 018
Jonathan Rhodes, Finance Director +44 (0)118 976 5074
Citigate Dewe Rogerson +44 (0)20 7638 9571
Kevin Smith/Jos Bieneman
Note to editors
XP designs and manufactures power controllers, the essential hardware component
in every piece of electrical equipment that converts the power from the
electricity grid into the right form for the equipment to function.
XP typically designs in power control solutions into the end products of major
blue chip OEMs, with a focus on the industrial (circa 45% of sales), healthcare
(circa 26% sales) and technology (circa 29% of sales) sectors. Once designed
into a program, XP has a revenue annuity over the life cycle of the customer's
product which is typically 5 to 7 years depending on the industry sector.
XP has invested in research and development and its own manufacturing facility
in China, to develop a range of tailored products based on its own intellectual
property that provide its customers with significantly improved functionality
Headquartered in Singapore and listed on the Main Market of the London Stock
Exchange since 2000, XP serves a global blue chip customer base from 27
locations in Europe, North America and Asia.