Last checked at 9 Jul 2012 07:00
9 July 2012 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 quarter ended 30 June 2012.
Trading
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 year.
Financial Position
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.
Dividend
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.
Outlook
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 23July 2012. - Ends - Enquiries:XP PowerDuncan Penny, Chief Executive +44 (0)7776 178 018Jonathan Rhodes, Finance Director +44 (0)118 976 5074Citigate Dewe Rogerson +44 (0)20 7638 9571Kevin Smith/Jos BienemanNote 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 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.
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