XP Power: Q3 Trading Supports FY18 Outlook
Edison | Oct 08, 2018 05:46AM ET
XP Power's (LON:XPP) Q3 trading update confirms strong revenue growth, despite currency headwinds, and good progress in design wins across all end markets. Q3 bookings growth has moderated slightly, partially reflecting uncertainty in the semiconductor sector over capex plans, but management is confident of achieving expectations set at its recent interim results; we leave our forecasts unchanged.
Strong 9M like-for-like revenue and bookings growth
XP received orders worth £153.3m in the nine months to 30 September 2018 (9M18), +11% y-o-y, +18% in constant currency and +8% on a like-for-like basis (excluding currency and acquisitions). In 9M18, the company reported revenues of £146.1m, +18% y-o-y, +24% in constant currency and 11% on a like-for-like basis; this equates to a book-to-bill of 1.05x for the period. As noted in July, the company has seen a shortage of components such as capacitors and has built its safety inventory to cope with extended lead times – this is factored into our gross margin assumptions for H218 and resulted in a small increase in net debt to £49.3m from £46.5m at the end of H118. The Q3 dividend of 19p is in line with our forecast.
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