XP Power, one of the world's leading developers and manufacturers of critical power control components to the electronics industry, is issuing a trading update for the first quarter ended 31 March 2023 (“the period”).
Trading
Trading in the period has been in line with our expectations, and our outlook for the full year remains unchanged.
The Group had an order book of c.£280m at the end of the period. This remains well above historic levels and provides excellent full year visibility.
Consistent with the end of 2022, order intake was below revenue in the period as customers moderated order volumes from the unprecedented levels seen in 2021 and the first half of 2022, reflecting an easing of supply chain constraints and a softening of end market demand. Order intake was £61.2 million, down 45% at constant currency and 40% as reported with Semiconductor Manufacturing Equipment and Industrial Technology seeing the greatest impacts. We would expect similar order intake patterns through the second quarter before a pick up in the second half of 2023.
Revenue grew strongly to £77.9 million, up 16% year-on-year on a constant currency basis and 26% as reported. The higher revenue enabled the Group to deliver improved profitability compared to the prior year period.
Financial Position and Dividend
Net debt at 31 March 2023 was £147.0 million, a reduction from £151.0 million at 31 December 2022.
Based on the Group's improved trading and stronger cash performance, net debt/EBITDA at the end of June 2023 is expected to be below that reported at the 2022 year end. We continue to expect net debt/EBITDA to reduce towards two times by the end of 2023.
The Board has declared a dividend for the first quarter of 18 pence per share (2022: 18 pence per share). The ex-dividend date will be 15 June 2023 and the dividend will be paid on 13 July 2023 to shareholders on the register at the record date of 16 June 2023. The last date for election for the share alternative to the dividend under the Company’s Dividend Reinvestment Plan is 22 June 2023.
Outlook
The Group has traded well in the opening months of 2023. We have significant order book visibility covering the remainder of 2023, and into 2024, and as such our full year expectations are unchanged. We continue to expect a modest second half weighting to the full year outturn.
Longer term, the Board believes XP’s clear strategy and financial framework leave the Group well positioned to grow ahead of its end markets, drive further market share gains, improve profitability and deliver strong cash generation.
