Xp Power Share Discussion Threads

[redartbmud] 11/8/2022 09:38

James Peters, Chair, commented:

“While underlying demand remained strong across all sectors, a combination of external supply chain factors, which restricted our capacity to deliver to customers, and inflationary pressures have produced a challenging backdrop in the first half. The team is working hard to mitigate these industry-wide challenges, with an improvement in performance in Q2 being sustained into the early weeks of the second half. While we are confident of a substantially better performance in the remainder of 2022 supported by the inventory on hand and a record, committed order book, there remains a wider range of full year outcomes than in prior years including scenarios where full year outturn is at the lower end of current analyst expectations. Longer term, the Group’s prospects remain bright, we are excited by the additional capacity to come from our new Malaysian facility and the opportunities that will provide. We are confident of delivering strong revenue growth and significant long term value creation as we outperform our end markets.”

I still maintain that the major problem is quality of senior management.
Given the right setup the share price should fly - unless they re screwed iver by litigaion, which is a self-inflicted naive action.

red

[valhamos] 11/8/2022 09:25

"others built inventory (such as diploma) to mitigage such supply chain issues. here this hasnt happened and you see the results."

On the contrary, inventory has increased from £54.2m at the end of 2020 to £74m at the end of 2021 "through investment in raw materials and safety stocks to manage supply issues and the customer demand backlog" (2021 Annual Report) and further increased to £108.4m (and only £4.4m of that increase is due to the FuG/Guth acquisitions) with "Inventory increased through investment in raw materials and safety stocks to ensure that the business is well positioned to ramp up production as key components become available and capacity increases in H2. (2022 Interim Results).

[redartbmud] 11/8/2022 09:14

I am afraid that you have to ask questions about the quality of senior management.
Looking at the big picture all companies have been faced with major disruption. Some have been able to navigate their way through, while others have created their own banana skins that have impacted more severely on performance.
I see Xpp as being in the latter category. Shaking up the bag at the top is required. Get the basics right and the company is in a sector where it is far more difficult to fail than it is to succeed.

Comments not prejudiced by the fact that I am nursing a thumping loss on my holding.

red

[roguetraderuk] 11/8/2022 09:06

others built inventory (such as diploma) to mitigage such supply chain issues. here this hasnt happened and you see the results. however at current prices its been derisked substantially and merits watching from here to see if they are making moves in the right direction.

[alotto] 10/8/2022 20:10

My thinking was, can a big company leverage their own supply chain better than a smaller company like xpp? Maybe big companies are better placed to guarantee continuity of supply to their customers because they can get their own supply more reliably. Maybe they can negotiate better pricing with supplier and customers. Xpp is struggling with inflation and cannot fulfill their orders. It is key they retain customers and volumes on the long term.

[valhamos] 10/8/2022 18:33

OK I understand your point but this is an industry wide problem not specific to XPP so all suppliers are in the same boat, as indeed are XPP's customers particularly in the semi equipment sector.

[alotto] 10/8/2022 15:08

Scorecards are based on quality and on time delivery. If they have orders but they have supply chain issue they will have late delivery with their customers.

[valhamos] 10/8/2022 14:43

alotto - why would their scorecards be red?

[mower] 10/8/2022 14:41

Off course its gone up.I sold half my long term holding yesterday. Everyone can feel free to load up now.!!!

[alotto] 10/8/2022 12:31

By the look of it, it has hit its bottom, hopefully there is some room for recovery now. Unfortunately the board is not able to project full year figures. I think we enter into murky water when looking at long term. Customers will look at XP as a supplier and their supplier score cards will be red and possibly will look at alternative suppliers or to be double sourced

[jamtin] 09/8/2022 13:15

I presume the debt has gone up due to the £33m acquisitions of FuG and Guth in January, that could also be part of the increased admin costs.

I think there is probably still a good business here, but I am very unhappy with the Board comms around the legal issue (let alone allowing it to happen in the first place). Aside from the delay in communicating the issue which jacks13 mentions, they now seem to be giving the bare minimum of information, and while that may be all they can do, there is nothing in the way they are addressing it to show they understand the concerns that we will have as investors and want to answer them as soon as they can.

I've held XPP for 14 years and it always used to have great, open matter-of-fact comms, under promise, over deliver, just the sort of board I wanted. I hope that wasn't all Duncan Penny.

[alotto] 09/8/2022 12:13

"Administrative expenses" have gone up quite significantly... what's driving that?
Total debt has gone up significantly too.. what is a realistic figure for the full year profits, or losses?
PE ratio is now 12, based on last year figures. I dont think we will see £3 any time soon, until figures are sorted out

[alotto] 09/8/2022 11:47

It will take a 50% increase to return to the price pre-HY results.
An encouraging director buy but, is the confidence of the board sufficient to give retain the current share holders?

[jacks13] 04/8/2022 14:37

What is disappointing is that Comet filed its litigation in early September 2020 and it took XP Power a full six months to advise the market. They broke the story the following March in the f/y results, when they had no other option. In the meantime Duncan Penny had moved on and Gavin Griggs eased into the chair. This is a ft250 company, shocking corporate governance.

[buoycat] 03/8/2022 15:49

This buy and hold can be dispiriting. I was up 95% at one point and vowed to sell half at 100% which I never quite reached. I'm now down 10% or so. Should have sold at the first sign of trouble of course.

[suetballs] 03/8/2022 15:14

sharw as you say we live and learn - until the next time!
Good luck.
Suet

[sharw] 03/8/2022 15:02

suetballs - my feelings exactly. With the benefit of hindsight it would have been good to sell at £56 (Aug. 12 - 17 last year) or even £36 (after first mention of court case verdict) but we live and learn.

I was lulled by the initial market reaction - small drop to £29 on Monday morning, having been at or below that for much of the last month. Then at 11 00 the great slide started and I decided there might be a dead cat bounce and I would get out then. The following morning the slide resumed and I gave up the bounce thought and got out at 2510p. With my usual timimg this would have been the lowest trade of the day but no - the slide has continued. You could say the same after getting out this morning!

Here's to a better night's sleep!

[suetballs] 03/8/2022 13:26

Decided to sell earlier this am for what I bought my shares for.
The ride down from £50 has been very painful but tbh I can't see any short term upside.
The funds raised are now invested in hsba and dge and I will sleep more easily.
Should have sold when the litigation first surfaced - but hey ho.
Suet

[owenski] 01/8/2022 21:29

Margins getting trimmed, but the biggy is the litigation, it's an unknown as to what additional costs will be applied.

PE not cheap either, this has got further to fall IMO

[thorpematt] 01/8/2022 20:09

Here's Edison's updated note from this morning: -




And a nice video to go with it: -



--------------

Does anyone have a view on further litigation?

By which I mean: Does one succesful case against XPP increase the likelihood of another one being instigated?

The USA can be a very litigious operating environment.

TIA for any views.

[mjneish] 01/8/2022 16:18

The shares still look expensive considering the uncertainties stated.

They've maintained their dividend, and the historic yield is now 3.6%. If the price goes down further, the dividend could provide some support, provided of course that the company is able to maintain it in the second half. The financials look like a maze, so that's hard to say. Net debt is sharply up.

[suetballs] 01/8/2022 13:13

Looks like my first thoughts were correct.
Ugly now.
Suet

[suetballs] 01/8/2022 08:26

Opening not as bad as I feared!
Suet

[suetballs] 01/8/2022 07:40

Half year results - mmm.
More negatives than positives tbh.
Supply chain issues, margins under pressure and Comet legal issue.
But good order intake,supportive banks and 'long term prospects remain bright'.

Sadly I expect a material neagative market reaction this am.
Suet

[mjneish] 23/6/2022 14:54

I think the PE ratio had a healthy bit of expectation built in, and even now the valuation looks rather generous to me given the issues described above. It looks like a good company so they may become attractive again at the right time.