XP reports strong orders from healthcare equipment makers

XP Power said trading was encouraging as the company worked to meet demand from makers of healthcare equipment during the Covid-19 crisis.

The FTSE 250 company said order intake in April and May was strong and that it would go into the second half of 2020 with a healthy order book. Orders rose by 33% in the first quarter to £73.1m from a year earlier and by 76% in April and May to £54.9m at constant currency.

XP, which makes power controllers for electrical equipment, said it had "exceptional" demand from customers making ventilators, patient monitors, hospital beds and X-ray machines to supply hospitals during the coronavirus pandemic. The company said it was working hard to get through the order backlog and that it expected demand to return to normal in the second half.

Makers of semiconductor equipment have also started to recover from a 2019 downturn, leading to strong orders for XP in April and May. Technology and industrial electronics orders have held up well though in recent weeks a few customers have deferred orders because of weak demand or production problems.

XP said: "The board is pleased with the group’s trading performance in the year to date, which demonstrates both the Group’s operational resilience and the benefits of our end market diversification. Order intake in healthcare and semiconductor equipment manufacturing, in particular, remains encouraging.

"Our strong order book gives good near-term visibility, but high levels of economic uncertainty and general market volatility continue to provide a wide range of potential outcomes for 2020."

The company's shares rose 3.9% to £36.36 at 11:37 BST.

XP said its supply chain was working well despite slight shortages of some parts. Air freight costs have risen sharply on routes out of Asia because of a lack of capacity and XP is negotiating these costs with its customers.

"Current conditions in the global airfreight market are creating some cost pressures which are likely to remain a feature until capacity recovers," the company said.