XP Power reports ongoing decline in revenues but eyes recovery

XP Power, which makes power control components for the electronics industry, has posted an 11 per cent decline in revenues for the nine months ended September 30th compared to the same period the previous year, rising to 12 per cent on a constant currency basis.

The firm was hit by subdued global demand for the capital equipment manufactured by its customers, but believes the situation is looking up.

In a trading update the group said: "While the trading environment remains challenging, order intake continues to be above the low levels experienced in the later part of 2011. We therefore expect a modest sequential improvement in second half revenues as these enter production in the fourth quarter, with a corresponding improvement in gross margins due to higher factory utilisation.

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"At some point we expect companies to take advantage of the low cost of funds and invest in new equipment incorporating the latest technologies to improve their productivity. In the interim, we will continue to press for further market share gains from our portfolio of market-leading power technology products."

At the half year point the firm posted profit after tax for the year of £9.6m (2011: £11.9m) on revenues of £46.5m (2011: £51.9m), pushing the gross margin from £25.7m to £21.8m.

On Tuesday the share price fell 6.04% to 949p by mid-morning.

NR