Main event today is that Vodafone has confirmed that the share consolidation is effective and commencement of trading in consolidated shares began today. This means that the big dividend of 102p (30p cash and 72p in Verizon shares) will be winging their way towards my accounts. We get 6 new Shares for every 11 held which mean the share price should stay roughly the same, although it seems to be up by around 4% at the time of writing.The number of shares held goes down so the value of the holding will decline to reflect the return of value via the dividend and Verizon shares.
Otherwise another of my holdings XPP has announced some Final results today which seem to be slightly ahead of what was expected with Sales £101.5 (+8%) v £100.3(F), EPS 95.1p (+17%) v 92.4p(F) and the dividend 55p (+10%) v 54.6p(F). They also paid debt down from £10.6m to £3.5m. On the dividend they say:
"Our continued strong financial performance, strong cash flows and confidence in the Group's long term prospects have enabled us to consistently increase dividends. In line with our progressive dividend policy, a final dividend of 19 pence per share for the fourth quarter of 2013 is proposed. This dividend will be payable to members on the register on 14 March 2014 and will be paid on 10 April 2014. When combined with the interim dividends for the previous quarters, the final proposed dividend results in a total dividend of 55 pence per share for the year (2012: 50 pence); an increase of 10%. The compound average growth rate of our dividend has been 21% over the last 5 years and 16% over the last 10 years."
XP Power designs and manufactures power controllers, the essential hardware component in every piece of electrical equipment that converts power from the electricity grid into the right form for equipment to function. XP Power typically designs in power control solutions into the end products of major blue chip OEMs, with a focus on the industrial (circa 45% of sales), healthcare (circa 30% sales) and technology (circa 25% of sales) sectors. Once designed into a program, XP Power has a revenue annuity over the life cycle of the customer's product which is typically 5 to 7 years depending on the industry sector. XP Power has invested in research and development and its own manufacturing facility in China, to develop a range of tailored products based on its own intellectual property that provide its customers with significantly improved functionality and efficiency. Head quartered in Singapore and listed on the Main Market of the London Stock Exchange since 2000, XP Power serves a global blue chip customer base from 27 locations in Europe, North America and Asia. On their strategic progress they say:
"XP Power has a long-established strategy of targeting blue chip customers with strong leadership positions in their respective markets, and whose insistence on vetting their suppliers' design and manufacturing facilities acts as a significant barrier to entry to many of the Group's potential competitors. Our state-of-the-art factories in China and Vietnam are dramatically enhancing the Group's ability to secure preferred supplier status with these larger customers and increase the proportion of revenues which come from our higher margin, own-designed products. This strategy remained successful in 2013 and we believe that it will continue to underpin the Group's progress in the current financial year."
Otherwise the Chairman commenting on the Results and Outlook said:
"2013 has been another year of progress where we have again demonstrated the successful execution of our well-established strategy of moving up the value chain into design and manufacture. We have delivered a solid set of results and encouragingly, have again out-paced our competitors and taken market share. XP Power's customers supply capital equipment to numerous markets across the globe. The macro-economic outlook for these customers has shown gradual improvement in the second half of 2013, which gives us confidence for further growth in 2014 and beyond. If this improvement is sustained we would expect to grow revenues again in 2014. "
The shares have done well since I bought them under £10 towards the end of 2012. Consequently they look less good value now trading on around 17x and a 3.3% yield which is covered about 1.7x. Given the financial metrics like ROCE of 29.1%, low debt, the outlook statement and the track record of this one I am happy to run with it as a winner for now. See their website for more background.