Record orders, revenues and pre-tax profits indicate that XP Power's (XPP) transformation from distributor to fully-fledged manufacturer was a smart one. A strong US dollar also provided a helping hand as the power converter specialist benefited from a resurgent European economy and technology market.
While the US has steadied, Europe has "come back with a bang", says boss Duncan Penny. That turn of events sent healthcare revenues climbing 13 per cent to more than £17m as the group secured a number of key new accounts on the continent. At 25 per cent, however, revenue growth in the technology business led the pack. After a prolonged period of inactivity, semiconductor customers returned in droves, fuelling a strong turnaround for the division.
Encouragingly, XP increased sales of products designed in-house by 10 per cent and its high-efficiency green offerings by 29 per cent. But while those high-margin products now account for a greater portion of group revenues, rising costs saw operating margins slip 0.9 points to 23.6 per cent.
Broker Edison expects adjusted pre-tax profit of £27.1m this year, giving adjusted EPS of 106p, rising to £28.4m and 112p in 2016 (from £24.3m and 101p in 2014).
| XP POWER (XPP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,606p | MARKET VALUE: | £308m | |
| TOUCH: | 1,588-1,624p | 12-MONTH HIGH: | 1,695p | LOW: 1,350p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 429p* | NET DEBT: | nil | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 50.2 | 12.2 | 51.1 | 25.0 |
| 2015 | 53.9 | 12.6 | 50.5 | 27.0 |
| % change | +7 | +3 | -1 | +8 |
Ex-div: 10 Sep Payment: 8 Oct *Includes intangible assets of £40.9m, or 213p a share | ||||
