XP Power (LON:XPP) had a strong finish to 2016, with good order in-take in Q416 and underlying revenue growth ahead of our forecast, boosted by the strength of the dollar versus sterling. Year-end net cash was higher than we forecast. The company expects to generate revenue growth in FY17 – we leave our forecasts unchanged pending the company’s FY16 results.
2016 revenue and cash ahead of our forecasts
XP generated Q416 revenues of £37.1m (+33% y-o-y) and FY16 revenues of £129.8m (+18% y-o-y, +7% constant currency), £2.6m ahead of our forecast. Taking into account the 18% y-o-y weakening of sterling versus the dollar in Q416, this implies that Q4 revenues saw good underlying growth, helped by the strong order intake in Q316. XP ended FY16 with a net cash position of £3.6m, compared to our forecast for net debt of £2.1m. The company expects to announce a Q4 dividend of at least 25p (versus our 24p forecast), for a total FY16 dividend of at least 70p (+6% y-o-y).