Chairman’s Statement
Business Performance
The environment for industrial electronics, which is
approximately 50% of our business, was somewhat tougher
in 2005 than 2004. Despite this, XP has continued to make
progress towards our strategic goals. In 2005 59% of our
revenues came from products containing XP intellectual
property compared with 55% in 2004. Our product
development groups around the world have delivered a
number of exciting new products during 2005, which will
help us achieve our goal of achieving 75% of our revenues
from XP product in 2007.
The business delivered earnings per share of 30.1 pence
(2004: 22.6 pence) on a diluted basis. Approximately
4.0 pence of this improvement was due to the fact that,
in accordance with International Accounting Standard,
(IAS) 38 ‘Intangible Assets’, £1.0 million of product
development costs were capitalised (2004: £nil). No product
development costs were capitalised in the 2004 figures as the
Group did not have the necessary records and assessments
in place during that time.
Dividend
The continued increase in profitability, together with strong
free cash flow (see note 24), has enabled us to once again
increase the dividend payable to shareholders. We will be
proposing a final dividend of 9 pence per share at the
Technical accounting treatment was
responsible for much of our growth
in earnings during 2005. We aim to
achieve reasonable growth in 2006 from
operational successes. Growth in revenue
is expected as is improvement in our
gross margins. Larry Tracey, Executive Chairman
Diluted Earnings per Share
UK GAAP diluted EPS adjusted for goodwill
UK GAAP diluted EPS
Diluted EPS
30.1
22.6
12.4
7.3
19.3
05 04 03 02 01
UK GAAP IFRS
4.9
0.0
13.5
