Last checked at 9 Jan 2012 07:00
9 January 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 fourth quarter ended 31 December 2011.
Trading
Revenues for the twelve months ended 31 December 2011 were 13% higher than those achieved in 2010. In constant currency the growth rate was 16%.
Trading in the final quarter was characterised by a deterioration in global economic confidence, which impacted on end-user demand in a number of the markets served by our customers. Group revenues, in the three months to 31 December 2011, contracted by 5% over the same period in 2010 as some customers pushed out deliveries. In constant currency the contraction rate was also 5%. This contraction was most pronounced in our North American business.
Despite another strong design win performance throughout the year, total bookings in the latter part of 2011 were soft as orders relating to existing programs were reduced against the backdrop of increasing macroeconomic uncertainty. This softness was most evident in the industrial and technology sectors, while healthcare has continued to remain resilient. With no improvement in end market sentiment yet in evidence, we expect further revenue contraction in the first quarter of 2012.
Construction of the new Vietnamese manufacturing facility - which commenced in December 2010 - was completed on schedule during December 2011. This new, state of the art facility adds significant additional capacity and geographical diversification to our manufacturing assets, an important consideration for potential customers. We expect to start initial production of magnetic components at the new site during the first quarter of 2012.
Financial Position
Net debt was £19.0 million at 31 December 2011 compared to £18.4 million at 31 December 2010. Using the exchange rates prevailing at 31 December 2010, net debt at 31 December 2011 would have been £19.4 million.
Dividend
A dividend of 11 pence per share for the third quarter will be paid on 10 January 2012 to shareholders on the register at 9 December 2011.
The dividend for the fourth quarter of 2011 will be announced with the 2011 final results on 20 February 2011 but, is not expected to be less than 14 pence per share representing a minimum total dividend of 44 pence per share for 2011, a minimum increase of 33% over the total dividend of 33 pence per share paid for 2010.
Outlook
Design wins in 2011 have continued to be positive and we are pleased with the further headway that has been made in achieving approved or preferred supplier status at new key accounts, but increased macroeconomic uncertainty will present a challenging environment as we enter 2012. Bookings in the last quarter of 2011 from existing programs were soft and customers are generally cautious and are delaying orders.
As a supplier to manufacturers of capital goods, we cannot expect to be immune from the effects of lower global end-market growth, nevertheless, XP's successful repositioning as a designer and manufacturer of its own range of market-leading products and the addition of its second manufacturing site providing magnetic capability leave the Group well positioned to respond to these more difficult markets and to continue to take market share.
XP Power will announce final results for the 12 months to 31 December 2011 on20 February 2011. - Ends - Enquiries:XP Power
Larry Tracey, Executive Chairman +44 (0)7785 387142
James Peters, Deputy Chairman +44 (0)7785 353066
Duncan Penny, Chief Executive +65 8322 9520
Jonathan Rhodes, Finance Director +44 (0)7500 944614
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 40% of sales), healthcare (circa 30% sales) and technology (circa 30% 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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