XP Power Ltd Q1 Trading Update
April 14 2022 - 1:00AM
UK Regulatory
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 +44 (0)118 984
5515
Oskar Zahn, Chief Financial
Officer +44 (0)118
984 5515
Citigate Dewe
Rogerson
Kevin Smith/Jos
Bieneman
+44 (0)207 638 9571
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
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