XP Power earnings firmer in 2016

Critical power components manufacturer XP Power posted its annual results for the year to 31 December on Wednesday, with order intake up 21% to £133.5m, and revenue rising 18% to £129.8m year-on-year.

The London-listed firm reported a gross margin as reducing by 200 basis points to 47.8%, while adjusted profit before tax rose 11% £28.6m and adjusted profit after tax and minority interest was up 10% to £22.3m.

Adjusted diluted earnings per share were 11% firmer at 115.3p.

XP Power said its operating cash flow surged 33% on the prior year to £27.9m, and its net cash stood at £3.7m, compared to net debt of £3.7m at the end of 2015.

Its board declared an 8% improvement in the final dividend per share at 26p, leading to an 8% rise in total dividends per share for the year at 71p.

On a reported basis, profit before tax was up 9% at £27.8m, profit after tax and minority interest was 8% higher at £21.5m, and diluted earnings per share were up 8% at 111.2p.

“We are encouraged by the strong finish we had to 2016,” commented chairman James Peters.

“The group entered 2017 with a strong order backlog and, despite the mixed global economic picture, we have established positive momentum in the new financial year.

“The further utilisation of lower cost production capacity in Vietnam is giving us a competitive advantage and we will begin work on a second factory at the site towards the end of 2017, to address our future volume growth requirements.”

Peters also pointed to the group’s strong balance sheet and highly cash-generative business, that he said would enable it to help fund further targeted acquisitions to broaden its product offering and engineering capabilities.

“We remain excited about the opportunities we believe will be available to the group in the years ahead.”