XP Power share price collapses after warning of revenue ‘shortfall’
Shares in XP Power slumped on Friday morning after the firm warned that it faced a “shortfall” in revenue due to weak customer demand.
The firm, which supplies critical power control systems, said it had seen “unusual, temporarily soft demand conditions and destocking” within the healthcare and industrial technology sectors as firms dipped into their inventories.
This was on top of continued weakness in semiconductor manufacturing equipment, which had continued in the new year as expected.
“The board has concluded that there is likely to be a shortfall in revenue in 2024, leaving the outlook for 2024 significantly below market expectations,” the company said in a trading update.
Its shares lost over 37 per cent in early trade on Friday.
XP Power said it expects the weakness to be “relatively short-lived” and noted that there were “encouraging signals”, particularly looking into 2025. However, it warned that that “the timing and speed of the recovery is hard to predict”.
Its programme of cost savings remains on track and it confirmed that it has identified further savings that can be delivered in the first quarter.
“These combined actions will significantly lower overheads year-on-year while preserving capability to respond to the recovery when it comes,” it said.