XP Power Ltd (LON:XPP) saw a strong finish to the year, with Q4 revenue growth of 16% y-o-y and order growth of 24% y-o-y, resulting in FY17 revenues slightly ahead of our forecast. Good demand across all sectors and geographies was boosted by a strong contribution from the recent Comdel acquisition. Management expects continued growth in FY18; we maintain our forecasts which, based on current momentum, could prove conservative.
Positive momentum continues into Q4
XP generated revenues of £43.2m in Q4, +16% y-o-y and +23% in constant currency. Stripping out the contribution from Comdel, revenues grew 5% y-o-y. FY17 revenues of £167m were 29% higher y-o-y (+22% constant currency) and were marginally ahead of our £166.7m forecast. Q4 order intake of £46.8m was 24% higher y-o-y (+32% constant currency) and 11% ahead on an organic basis. Book-to-bill stood at 1.08x for Q4 and 1.11x for FY17. Net debt at year-end stood at £10.1m, below our £12.6m forecast. XP expects to declare a Q4 dividend of at least 28p per share, ahead of our 27p forecast. With the strong backlog in place at year-end and positive momentum during H217, management expects continued order and revenue growth in FY18. We make no changes to our forecasts pending preliminary results on 1 March.
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