Xp Power Share Price (XPP)

XP expects to report slightly weaker FY12 revenues than we were expecting, as customers continue to take a cautious approach to ordering. The transfer of outsourced manufacturing to in-house facilities is on track, driving the gross margin recovery in H2. We have reduced our FY12 and FY13 forecasts to reflect a more cautious start to the year, although we continue to forecast +20% operating margins and reduction of debt. Upside from this point depends on a sustained uptick in bookings, particularly from the technology sector

Trading Statement 10 January 2013 XP Power Limited ("XP Power" or "the Group") Trading Update 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 fourth quarter ended 31 December 2012. Trading Revenues for the twelve months ended 31 December 2012 were 9% lower than those achieved in 2011. In constant currency revenues also declined by 9%. Customers continue to be cautious in placing new orders and taking delivery of product from their existing call off orders. Although markets have remained challenging, revenues showed a marginal sequential improvement from the first half of the year to the second half. Factory loading in our Chinese facility has increased and start-up losses in our new Vietnamese facility have declined. These combined factors should result in a solid improvement in gross margins in the second half of the year compared to the first half, as expected. Financial Position Net debt was £10.7 million at 31 December 2012 compared to £18.6 million at 31 December 2011. Using the exchange rates prevailing at 31 December 2011, net debt at 31 December 2012 would have been £11.1 million. Dividend A dividend of 12 pence per share for the third quarter will be paid today, 10 January 2013, to shareholders on the register at 14 December 2012. The dividend for the fourth quarter of 2012 will be announced with the 2012 final results on 25 February 2013 but is not expected to be less than 16 pence per share, representing a minimum total dividend of 49 pence per share for 2012, an increase of 9% over the total dividend of 45 pence per share paid for 2011. Outlook XP Power's customers supply capital equipment to markets across the globe. The macro-economic outlook for these customers appears to be less positive entering 2013, in an environment characterised by reduced government spending and increased taxation, which are not generally positive indicators for increased investment in capital equipment. Orders received in the second half of 2012 are 8% higher than the comparable period in 2011. However, at this early stage of the year, this would indicate flat or only modestly increased revenue for 2013. XP Power has a long-established strategy of targeting blue chip customers with strong leadership positions in their respective markets, and whose requirement to vet their suppliers' design and manufacturing facilities acts as a significant barrier to entry to many of the Group's competitors. The success of this strategy has mitigated some of the reduction in the market for power supplies in 2012 and should leave us well placed for the year

http://www.fsa.gov.uk/static/pubs/international/short-positions-daily-update.xls. Checkout the daily update and you can see who is shorting this stock

XP Power Ltd. (DI) Buy 06-Nov-12 £25,000.00 James E Peters 2,500 @ 1,000.00p XP Power Ltd. (DI) Buy 06-Nov-12 £25,000.00 James E Peters 2,500 @ 1,000.00p

Valuation: Waiting for bookings upturn XP trades on a P/E multiple of 11.8x FY12e and 10.4x FY13e revised EPS, with a forecast dividend yield of 4.8%. It trades in line with UK distributors and towards the lower end of global power converter companies, a discount not justified by its superior margins or dividend yield support, in our view. To see upside from this point, investors will need to see evidence of a sustained improvement in bookings in Q4 and into 2013.

http://www.edisoninvestmentresearch.co.uk/researchreports/XPPower091012update.pdf