Last close As at 05/08/2026
GBP17.92
▲ 6.00 (0.34%)
Market capitalisation
GBP501m
Research: TMT
XP reported another robust quarter for order intake (+7% y-o-y, +38% q-o-q in constant currency), strengthening the backlog for the coming quarters. Demand from the semiconductor manufacturing sector remains strong and demand from the industrial technology sector has started to rebound, more than compensating for the moderation in orders from the healthcare sector. Management reiterates its outlook for underlying revenue growth in FY21 and we maintain our forecasts.
XP Power |
Order momentum maintained in Q1 |
Q121 trading update |
Tech hardware & equipment |
13 April 2021 |
Share price performance
Business description
Next events
Analyst
XP Power is a research client of Edison Investment Research Limited |
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XP reported another robust quarter for order intake (+7% y-o-y, +38% q-o-q in constant currency), strengthening the backlog for the coming quarters. Demand from the semiconductor manufacturing sector remains strong and demand from the industrial technology sector has started to rebound, more than compensating for the moderation in orders from the healthcare sector. Management reiterates its outlook for underlying revenue growth in FY21 and we maintain our forecasts.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/19 |
199.9 |
32.3 |
141.4 |
55.0 |
33.9 |
1.1 |
12/20 |
233.3 |
44.3 |
198.4 |
74.0 |
24.1 |
1.5 |
12/21e |
227.8 |
41.5 |
171.4 |
94.0 |
27.9 |
2.0 |
12/22e |
237.8 |
44.9 |
185.3 |
98.0 |
25.8 |
2.0 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Bookings remain robust in Q121
XP Power reported that Q121 bookings of £73.7m were 1% higher y-o-y (or 7% in constant currency) and 32% higher q-o-q (38% constant currency). Demand from semiconductor equipment manufacturers remained strong and industrial technology customer demand started to recover. As expected, orders from healthcare customers returned to pre COVID-19 levels. Q121 revenue was £57.1m, 16% higher y-o-y (23% constant currency) and down 3% q-o-q (up 1% constant currency). In the same period a year ago, the company experienced manufacturing shutdowns due to COVID-19 as well as related supply chain issues. Book-to-bill for the quarter was 1.29x, providing a strong backlog entering Q221.
Maintaining forecasts
XP finished Q121 with a net debt position of £18.4m (FY20: £17.9m). The board has recommended a Q1 dividend of 18p per share, in line with our expectations. Management is encouraged by the Q1 order book which underpins its expectations for underlying revenue growth for FY21, albeit injecting a note of caution around currency and continued COVID-19 risk. We maintain our forecasts which factor in constant currency revenue growth of 3.8% for FY21 (-2.4% on a reported basis).
Valuation: Supported by strong order intake
The stock is up 2% year-to-date, although it is down 16% from the peak reached in February, despite continued positive news from the semiconductor sector regarding fab investment plans. On an FY21e P/E basis XP is trading at an 11% premium to global power-converter companies but at an 8% discount to UK electronics companies, with a dividend yield at the upper end of the range. The company generates EBITDA and EBIT margins at the top end of both peer groups. Strong cash management during the crisis leaves the company well-funded to pursue both organic and acquisitive growth.
Exhibit 1: Financial summary
£'m |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
2021e |
2022e |
||
31-December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||||||
Revenue |
|
|
109.7 |
129.8 |
166.8 |
195.1 |
199.9 |
233.3 |
227.8 |
237.8 |
Cost of Sales |
(55.1) |
(67.8) |
(89.2) |
(102.8) |
(109.8) |
(123.2) |
(123.3) |
(127.4) |
||
Gross Profit |
54.6 |
62.0 |
77.6 |
92.3 |
90.1 |
110.1 |
104.5 |
110.4 |
||
EBITDA |
|
|
29.7 |
33.0 |
41.7 |
49.2 |
44.5 |
56.8 |
54.6 |
58.4 |
Normalised operating profit |
|
|
25.9 |
28.8 |
36.4 |
42.9 |
35.0 |
46.0 |
43.0 |
46.2 |
Amortisation of acquired intangibles |
0.0 |
(0.4) |
(0.6) |
(2.8) |
(3.2) |
(3.2) |
(3.2) |
(3.2) |
||
Exceptionals |
(0.3) |
(0.4) |
(3.3) |
(0.8) |
(5.1) |
(5.4) |
(1.5) |
0.0 |
||
Share-based payments |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Reported operating profit |
25.6 |
28.0 |
32.5 |
39.3 |
26.7 |
37.4 |
38.3 |
43.0 |
||
Net Interest |
(0.2) |
(0.2) |
(0.3) |
(1.7) |
(2.7) |
(1.7) |
(1.5) |
(1.3) |
||
Joint ventures & associates (post tax) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Exceptional & other financial |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
25.7 |
28.6 |
36.1 |
41.2 |
32.3 |
44.3 |
41.5 |
44.9 |
Profit Before Tax (reported) |
|
|
25.4 |
27.8 |
32.2 |
37.6 |
24.0 |
35.7 |
36.8 |
41.7 |
Reported tax |
(5.5) |
(6.3) |
(3.6) |
(7.2) |
(3.2) |
(4.0) |
(6.3) |
(7.1) |
||
Profit After Tax (norm) |
20.2 |
22.3 |
28.8 |
33.9 |
27.9 |
39.2 |
34.5 |
37.2 |
||
Profit After Tax (reported) |
19.9 |
21.5 |
28.6 |
30.4 |
20.8 |
31.7 |
30.6 |
34.6 |
||
Minority interests |
(0.2) |
(0.2) |
(0.3) |
(0.2) |
(0.3) |
(0.2) |
(0.3) |
(0.3) |
||
Discontinued operations |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
20.0 |
22.1 |
28.5 |
33.7 |
27.6 |
39.0 |
34.2 |
37.0 |
||
Net income (reported) |
19.7 |
21.3 |
28.3 |
30.2 |
20.5 |
31.5 |
30.3 |
34.3 |
||
Basic average number of shares outstanding (m) |
19.0 |
19.0 |
19.1 |
19.1 |
19.2 |
19.3 |
19.6 |
19.6 |
||
EPS - basic normalised (p) |
|
|
105.3 |
116.2 |
149.4 |
176.1 |
144.1 |
201.8 |
174.3 |
188.4 |
EPS - diluted normalised (p) |
|
|
104.3 |
115.3 |
147.0 |
172.8 |
141.4 |
198.4 |
171.4 |
185.3 |
EPS - basic reported (p) |
|
|
103.7 |
112.0 |
148.3 |
157.8 |
107.0 |
163.0 |
154.4 |
174.8 |
Dividend (p) |
66 |
71 |
78 |
85 |
55 |
74 |
94 |
98 |
||
Revenue growth (%) |
8.5 |
18.3 |
28.5 |
17.0 |
2.5 |
16.7 |
(-2.4) |
4.4 |
||
Gross Margin (%) |
49.8 |
47.8 |
46.5 |
47.3 |
45.1 |
47.2 |
45.9 |
46.4 |
||
EBITDA Margin (%) |
27.0 |
25.4 |
25.0 |
25.2 |
22.3 |
24.3 |
24.0 |
24.5 |
||
Normalised Operating Margin |
23.6 |
22.2 |
21.8 |
22.0 |
17.5 |
19.7 |
18.9 |
19.4 |
||
BALANCE SHEET |
||||||||||
Fixed Assets |
|
|
65.4 |
73.2 |
88.1 |
129.2 |
137.4 |
135.2 |
141.4 |
143.5 |
Intangible Assets |
48.2 |
53.0 |
63.9 |
97.7 |
99.6 |
98.8 |
105.4 |
107.8 |
||
Tangible Assets |
16.1 |
19.1 |
22.5 |
30.7 |
35.9 |
33.5 |
33.1 |
32.8 |
||
Investments & other |
1.1 |
1.1 |
1.7 |
0.8 |
1.9 |
2.9 |
2.9 |
2.9 |
||
Current Assets |
|
|
53.5 |
65.7 |
83.5 |
105.1 |
96.0 |
107.0 |
106.5 |
114.3 |
Stocks |
28.7 |
32.2 |
37.8 |
56.5 |
44.1 |
54.2 |
52.4 |
54.1 |
||
Debtors |
17.5 |
21.5 |
23.8 |
33.0 |
34.8 |
30.2 |
37.4 |
39.1 |
||
Cash & cash equivalents |
4.9 |
9.2 |
15.0 |
11.5 |
11.2 |
13.9 |
8.0 |
12.4 |
||
Other |
2.4 |
2.8 |
6.9 |
4.1 |
5.9 |
8.7 |
8.7 |
8.7 |
||
Current Liabilities |
|
|
(19.8) |
(25.8) |
(25.1) |
(26.8) |
(30.4) |
(34.7) |
(34.9) |
(35.9) |
Creditors |
(14.6) |
(16.1) |
(21.4) |
(22.4) |
(25.2) |
(28.3) |
(28.5) |
(29.5) |
||
Tax and social security |
(1.2) |
(3.3) |
(3.5) |
(4.2) |
(3.1) |
(4.9) |
(4.9) |
(4.9) |
||
Short term borrowings |
(4.0) |
(5.5) |
0.0 |
0.0 |
(1.6) |
(1.5) |
(1.5) |
(1.5) |
||
Other |
0.0 |
(0.9) |
(0.2) |
(0.2) |
(0.5) |
0.0 |
0.0 |
0.0 |
||
Long Term Liabilities |
|
|
(10.0) |
(6.2) |
(29.6) |
(70.1) |
(64.1) |
(43.0) |
(36.3) |
(29.6) |
Long term borrowings |
(4.6) |
0.0 |
(24.0) |
(63.5) |
(57.3) |
(35.2) |
(28.5) |
(21.8) |
||
Other long term liabilities |
(5.4) |
(6.2) |
(5.6) |
(6.6) |
(6.8) |
(7.8) |
(7.8) |
(7.8) |
||
Net Assets |
|
|
89.1 |
106.9 |
116.9 |
137.4 |
138.9 |
164.5 |
176.7 |
192.3 |
Minority interests |
(0.8) |
(0.8) |
(0.9) |
(1.0) |
(0.7) |
(0.7) |
(0.8) |
(0.8) |
||
Shareholders' equity |
|
|
88.3 |
106.1 |
116.0 |
136.4 |
138.2 |
163.8 |
176.0 |
191.5 |
CASH FLOW |
||||||||||
Op Cash Flow before WC and tax |
29.7 |
33.0 |
41.7 |
49.2 |
44.5 |
56.8 |
54.6 |
58.4 |
||
Working capital |
(4.6) |
(6.1) |
0.4 |
(21.6) |
10.6 |
(6.2) |
(5.2) |
(2.3) |
||
Exceptional & other |
0.6 |
5.1 |
(6.3) |
3.2 |
(4.4) |
(1.7) |
(1.5) |
0.0 |
||
Tax |
(4.7) |
(4.1) |
(6.1) |
(4.1) |
(4.5) |
(3.3) |
(6.3) |
(7.1) |
||
Net operating cash flow |
|
|
21.0 |
27.9 |
29.7 |
26.7 |
46.2 |
45.6 |
41.6 |
48.9 |
Capex |
(5.4) |
(6.8) |
(10.1) |
(15.0) |
(16.3) |
(14.9) |
(21.0) |
(17.5) |
||
Acquisitions/disposals |
(8.3) |
0.1 |
(18.3) |
(35.4) |
0.0 |
(0.5) |
0.0 |
0.0 |
||
Net interest |
(0.1) |
(0.2) |
(0.2) |
(1.5) |
(2.7) |
(1.3) |
(1.5) |
(1.3) |
||
Equity financing |
0.0 |
0.2 |
(0.2) |
0.6 |
0.5 |
3.5 |
0.0 |
0.0 |
||
Dividends |
(12.2) |
(13.1) |
(14.2) |
(15.6) |
(17.2) |
(7.3) |
(18.3) |
(19.0) |
||
Other |
0.2 |
0.0 |
0.0 |
0.0 |
(1.5) |
(1.7) |
(1.7) |
(1.7) |
||
Net Cash Flow |
(4.8) |
8.1 |
(13.3) |
(40.2) |
9.0 |
23.4 |
(0.9) |
9.4 |
||
Opening net debt/(cash) |
|
|
(1.3) |
3.7 |
(3.7) |
9.0 |
52.0 |
41.3 |
17.9 |
18.8 |
FX |
(0.2) |
(0.5) |
0.6 |
(2.7) |
1.7 |
0.0 |
0.0 |
0.0 |
||
Other non-cash movements |
0.1 |
(0.2) |
0.0 |
(0.1) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Closing net debt/(cash) |
|
|
3.7 |
(3.7) |
9.0 |
52.0 |
41.3 |
17.9 |
18.8 |
9.4 |
Source: XP Power, Edison Investment Research
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Research: Industrials
The Medserv board has announced that a conditional agreement has been reached with Regis Holdings Limited, based in Mauritius, to effect a strategic transaction through a share for share exchange with a value of €32.5m. The deal should provide Medserv with market access into critical growing markets and should strengthen its equity base and liquidity position. The deal is subject to Medserv shareholder approval at a general meeting. More details including financial outlooks for FY21 and FY22 for the expanded Medserv plc are to be provided in a shareholder circular in advance of that.