XP Power Ltd Q1 Trading Update

 
TIDMXPP 
 
14 April 2022 
 
                               XP Power Limited 
 
                 ("XP Power" or "the Group" or the "Company") 
 
                               Q1 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 first quarter ended 31 March 2022. 
 
Trading 
 
The strong momentum in order intake seen in the previous year continued in Q1, 
up 37% at constant currency and 39% as reported to £102.4 million.  Demand 
remains encouraging across all three sectors.  The Group has a record order 
book of c.£260 million, providing very high levels of cover compared to full 
year revenue consensus expectations. 
 
Revenue of £61.8 million in Q1 was up 7% year-on-year on a constant currency 
basis and 8% as reported.  Excluding the acquisitions of FuG and Guth, organic 
revenue grew 1% on a constant currency basis.  As previously highlighted 
industry-wide supply chain constraints, specifically the availability of key 
components, global logistics challenges and the ongoing effects of COVID-19 
continued to impact product shipments.  Phase two of our end-to-end Enterprise 
Resource Planning system was successfully implemented in early March although, 
as expected, this also modestly impacted on shipments in the period. 
 
The book to bill ratio, which tracks the relationship between orders received 
and completed sales, was 1.66 for the first quarter of 2022 (Q1 2021: 1.29). 
 
£ Millions          Q1 2022  Q1 2021  Change    Change in    Like-for-like 
                                                constant     in constant 
                                                currency     currency 
 
Orders              102.4    73.7     39%       37%          30% 
 
Revenue             61.8     57.1     8%        7%           1% 
 
Book to Bill 
 
First quarter       1.66     1.29     0.37 
 
 
The FuG and Guth businesses in Germany, which were acquired on 31 January 2022, 
have been successfully integrated into the Group structure and made a strong 
start to trading under XP's ownership, reporting record revenues for the month 
of March. 
 
The site for our third manufacturing facility in Asia has now been secured and 
we expect to break ground at Perak, North West Malaysia during 2022. 
 
Legal 
 
As announced on 24 March 2022, a jury in the US legal action brought by Comet 
Technologies USA Inc., Comet AG, and YXLON International ("Comet") found in 
favour of Comet and awarded damages of $40 million against XP Power.  The Board 
continues to assess next steps in respect of this judgement and will update as 
soon as practicable. 
 
Financial Position and Dividend 
 
Net debt at 31 March 2022 was £81.5 million, compared with £24.6 million at 31 
December 2021.  The increased net debt reflects the acquisition spend of £33 
million on FuG and Guth, investment in working capital of around £12 million to 
meet the significant order backlog and the specific items, predominantly legal 
fees.  The working capital investment made in Q1 2022 is expected to be 
sufficient to meet the expected ramp up in revenue throughout the remainder of 
FY 2022. 
 
Net debt/EBITDA at the end of June 2022 is expected to rise to between 2.0 and 
2.3 times, well within our agreed banking covenants of 3.0 times.  This gearing 
includes the payment of cash during Q2 2022 should damages and legal costs be 
required.  We expect net debt/EBITDA to reduce to below 2.0 times by 2022 
year-end as our working capital unwinds and given the expected second half 
weighting to trading.  The Group has also put through targeted price increases 
to reflect the inflationary environment. 
 
The Board has declared a dividend for the first quarter of 18.0 pence per share 
(2021: 18.0 pence per share).  The ex-dividend date will be 16 June 2022 and 
the dividend will be paid on 14 July 2022 to shareholders on the register at 
the record date of 17 June 2022.  The last date for election for the share 
alternative to the dividend under the Company's Dividend Reinvestment Plan is 
23 June 2022. 
 
Outlook 
 
The Group enters the second quarter with a very strong order book.  While we 
remain mindful of the ongoing uncertainties in respect of component supply and 
freight capacity and costs, we are optimistic on the Group's prospects for the 
full year and are progressing with our planned investment in a manufacturing 
facility in Malaysia, as well as other capacity improvements, to support the 
future growth of the Group. 
 
Longer term, the Board believes XP Power to be very well positioned to grow 
ahead of its end markets. 
 
Enquiries: 
 
XP 
Power 
 
Gavin Griggs, Chief Executive 
Officer                                                         [phone] 
5515 
 
Oskar Zahn, Chief Financial 
Officer                                                            +44 (0)118 
984 5515 
 
Citigate Dewe 
Rogerson 
 
Kevin Smith/Jos 
Bieneman 
[phone] 
 
Note to editors 
 
XP Power designs and manufactures power controllers, the essential hardware 
component in every piece of electrical equipment that converts power from the 
electricity grid into the right form for equipment to function. 
 
XP Power has invested in research and development and its own manufacturing 
facilities in China and Vietnam, 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 Power is a constituent of the FTSE 250 Index. XP Power 
serves a global blue-chip customer base from 29 locations in Europe, North 
America, and Asia. 
 
For further information, please visit xppower.com 
 
 
 
END 
 
 

(END) Dow Jones Newswires

April 14, 2022 02:00 ET (06:00 GMT)