XP Power (XPP) downplayed its prospects for the first half of 2019, following a fourth-quarter softening in order intake from its semiconductor business, which generates around a quarter of the engineer’s revenues.
A record order backlog and a contribution from high-voltage equipment company Glassman, which it acquired in May 2018, should accelerate growth, according to chief executive Duncan Penny. The acquisition makes XP “one of the few power converter companies in the world that you can come to and get the whole range of products”, Mr Penny said. It will also allow XP to expand its addressable market by $500bn (£381m).
Tariffs imposed as part of the US-China trade war have cost the group around $2m, but the business has mitigated the impact of the conflict by moving products from China to Vietnam. Some of its customers have also moved their production out of the US, in order to avoid the tariffs, according to the chief executive.
Analysts at Investec forecast full-year 2019 pre-tax profits and earnings per share of £42.4m and 177p, respectively, up from £41.2m and 173p in the prior year.
XP POWER (XPP) | ||||
ORD PRICE: | 2,040p | MARKET VALUE: | £392m | |
TOUCH: | 2,040-2,050p | 12-MONTH HIGH: | 3,780p | LOW: 1,940p |
DIVIDEND YIELD: | 4.2% | PE RATIO: | 13 | |
NET ASSET VALUE: | 710p* | NET DEBT: | 38% |
Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2014 | 101 | 24.3 | 102 | 61 |
2015 | 110 | 25.4 | 104 | 66 |
2016 | 130 | 27.8 | 112 | 71 |
2017 | 167 | 32.2 | 148 | 78 |
2018 | 195 | 37.6 | 158 | 85 |
% change | +17 | +17 | +6 | +9 |
Ex-div: | 21 Mar | |||
Payment: | 23 Apr | |||
*Includes intangible assets of £98m, or 509p a share |