08 July 2014
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 2014.
The Group traded in line with the Board's expectations during the first half of the year. Group revenues for the six months ended 30 June 2014 increased by 2% from the same period in 2013. The strength of Sterling versus the US Dollar, the Group's principal trading currency, had a significant translation effect in the period and in constant currency the increase was 9%.
Orders for the first half of 2014 were 3% higher than the prior year. In constant currency we estimate the increase was 9%.
Production volumes at both our Chinese and Vietnamese factories have continued to increase. While the translation effect from the weaker US Dollar negatively impacts the revenue line it has a corresponding positive impact on cost of sales and the combination of these two factors acts to increase the gross margin percentage.
Given the combined benefit of improved factory loading and the aforementioned foreign exchange impacts, we expect first half gross margins will exceed those achieved in the first half of 2013.
Net debt continued to reduce and was £1.6 million at 30 June 2014 compared to £8.5 million at 30 June 2013. Using the exchange rates prevailing at 30 June 2013, net debt at 30 June 2014 would have been £1.8 million.
An increased dividend for the second quarter of 13 pence per share (2013: 12 pence per share) will be paid on 10 October 2014 to shareholders on the register at 5 September 2014.
At the time of our first quarter trading update in April, we reported that order intake had been encouraging, reflecting a continuation of the gradual improvement in trading conditions seen through the second half of 2013.
Order intake in the second quarter was robust and we therefore reiterate our guidance that we would expect to grow revenues again in 2014, although this underlying growth is expected to be impacted by the currency translation effects discussed above.
XP will issue its interim results for the six months to 30 June 2014 on 28 July 2014.
|Duncan Penny, Chief Executive||+44 (0)7776 178 018|
|Jonathan Rhodes, Finance Director||+44 (0)7500 944 614|
|Citigate Dewe Rogerson|
|Kevin Smith/Jos Bieneman||+44 (0)20 7638 9571|
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 30% sales) and technology (circa 25% 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 and efficiency.
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.