Following a weak year of trading in 2012, XP Power (XPP) bounced back with decent revenue and profit growth in the first half of 2013, despite continued challenging market conditions.
XP Power makes control units that convert mains power into the correct form required by specialist electrical equipment, and it was the healthcare sector which proved most resilient. Revenues there grew 14 per cent to £14.5m, outperforming the industrial sector where sales grew 11 per cent to £23.5m. The technology sector proved more challenging, however, with revenues declining 14 per cent to £11.0m.
The company's decision to build its own manufacturing capability in Vietnam is also starting to pay off. Combined with new, higher-margin product introductions, gross margins increased to 48.6 per cent from 46.9 per cent. XP Power therefore looks well-positioned to benefit when the global market eventually recovers and customer orders return to previous levels. But chief executive Duncan Penny warns: "There doesn't seem to be any immediate signs of any big uptick" just yet.
Broker Investec forecasts adjusted EPS of 90.9p in the current year and 97.6p in 2014 (from 81.3p in 2012).
XP POWER (XPP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,325p | MARKET VALUE: | £254m | |
| TOUCH: | 1,317-1,364p | 12-MONTH HIGH: | 1,375p | LOW: 873p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 339p* | NET DEBT: | 13% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 46.5 | 9.6 | 40.6 | 21.0 |
| 2013 | 49.0 | 10.4 | 42.1 | 23.0 |
| % change | +5 | +8 | +4 | +10 |
Ex-div: 4 Sep Payment: 10 Oct *Includes intangible assets of £38.6m, or 201p a share | ||||
