XP Power Ltd has declared a second quarter dividend of 19.0 pence per share (2021: 19.0 pence per share). Together with the first quarter dividend, this brings the total first half dividends declared to 37.0 pence per share (H1 2021 total dividends 37.0 pence). The ex-dividend date for the second quarter dividend will be 8 September 2022 and the dividend will be paid on 13 October 2022 to shareholders on the register at the record date of 9 September 2022.
Other Financial Highlights:
- Order intake was up 18% at constant currency and 23% as reported to £193.1 million, with growth driven by continued momentum in all segments, especially Healthcare.
- Demand remains strong into H2 2022 with a record, committed order book of £285.2 million (31 December 2021: £217.0 million) giving good visibility out beyond the next 12 months
- Revenue growth nonetheless constrained by industry-wide component shortages, a five-week COVID-19 lock-down in China, and extended component lead-times
- Gross and operating margins impacted by both lower production volumes and compounded by inflation where there is a lag to full recovery in higher customer pricing, and also ongoing global logistics challenges. Pricing action taken in 2021 and 2022 is expected to have a larger benefit in H2 with further improvement in FY 2023
- Improvement in financial performance metrics which began in Q2 has been sustained into July, with significantly improved performance expected from the second half
- Investing to support significant medium term growth, including;
- Acquisition of FuG and Guth for €39.0 million completed in January. Both businesses are performing well
- Manufacturing capacity expansion, with construction of third Asia facility in Malaysia underway, to facilitate growth plans
- Increased the capacity, efficiency and resilience of existing facilities across the globe
- Roll-out of Enterprise Resource Planning system in Asia manufacturing sites, now largely complete
- Successful bank refinancing, with RCF increased from $150 million to $255 million with up to an additional $75 million accordion option, providing the Group with substantial liquidity out until 2026 with an extension option to 2027
- Net debt of £102.0 million has risen substantially since 2021 year end largely reflecting the acquisition consideration (£32.3 million), adverse FX movements (£8.1 million) and elevated levels of working capital excluding the impact of specific items (£22.1 million). There has been no payment for legal damages in H1
- Period end net debt/EBITDA of 2.1x is expected to remain at c.2x at year end including the potential payment in H2 of expected damages from legal case
- No final judgement on Comet legal case, expected damages of $40.0 million (c.£30.7 million) as well as a provision for estimated future costs to resolution
