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29 July 2013
XP Power Limited
("XP" or "the Group")
Interim Results for the six months ended 30 June 2013
XP Power made encouraging progress during the first half, despite the global
environment for capital spending remaining challenging throughout the period.
The Group continued to benefit from its well-established strategy of moving up
the value chain and establishing its own manufacturing capability, resulting in
further increases in market share.
Revenues increased by 5% over the prior year and our new Vietnam magnetics
manufacturing facility has benefited from further volume growth and is now
breaking even. These factors, together with better factory loading and an
improved product mix, led to an increase in our gross margins to 48.6% from
46.9% in the first half of 2012.
The Group has applied a consistent strategy of moving up the value chain,
Development of a strong pipeline of leading-edge products
Provision of industry-leading levels of service and support
Targeting new key accounts and increasing the penetration of existing key
An established pipeline of new class-leading "Green" products which operate at
Enhancing its value proposition to customers by the addition of a manufacturing
Increasing the proportion of high margin own designed/manufactured products
within its revenue mix
Our value proposition to customers is to reduce their overall costs of design,
manufacture and operation. We achieve this by providing excellent sales
engineering support and producing new products that consume less power, take up
less space, reduce installation times and which are highly reliable in service.
Trading and Financial Review
XP Power supplies power control solutions to original equipment manufacturers
("OEMs") who supply the healthcare, industrial and technology markets with high
value, high reliability products. The increasing importance of energy
efficiency for environmental, reliability and economic reasons; the necessity
for ever smaller products; the accelerating rate of technological change; and
the increasing proliferation of electronic equipment, have all set a strong
foundation for medium term growth in demand for XP Power's products.
Revenues for the period increased by 5% (4% in constant currency) to £49.0
million, compared with £46.5 million in the same period a year ago. Revenues
in Europe were £22.1 million up 9%; those in North America were £23.7 million,
up 8%, and those in Asia were £3.2 million, down 26% largely due to a
particular customer program coming to the end of its life as anticipated. As we
sell to Original Equipment Manufacturers who in turn sell to their end
customers it is difficult to accurately assess whether this geographic split is
representative of the ultimate end destination of our equipment. However, we
believe a significant proportion of the equipment we sell into the industrial
sector is likely to end up in emerging markets.