XPP XP Power

Edison Investment Research Limited: XP Power (XPP): A record year

Edison Investment Research Limited
Edison Investment Research Limited: XP Power (XPP): A record year

03-March-2021 / 07:00 GMT/BST

 

London, UK, 3 March 2021

 

XP Power (XPP): A record year

XP Power reacted quickly to pandemic-related disruption early in 2020, so well positioned to benefit from a sustained uptick in orders as COVID-19 generated demand for critical care equipment and semiconductors. The company reported a record year for revenue and earnings while reducing net debt; the dividend was reinstated from Q220 as visibility improved. Despite expecting demand to normalise, XP still expects growth in underlying revenues in FY21.

 

Having gained 79% over the last year, on a P/E basis XP is trading at a premium to both global power-converter companies and 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, which reduced net debt by 57% y-o-y, leaves the company well funded to pursue both organic and acquisitive growth.

 
 

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