XP Power (LSE:XPP) has reported record third-quarter order intake of £106.8 million, nearly double the level recorded a year earlier, as demand increased from semiconductor manufacturing and industrial technology customers.
The power control equipment manufacturer recorded a book-to-bill ratio of 1.67 during the quarter, indicating that new orders exceeded revenue recognised over the period.
XP Power attributed the increase in orders partly to customers placing orders earlier than usual in response to lengthening industry lead times.
Third-quarter revenue reached £63.8 million, representing a 10% increase at constant exchange rates. The company said underlying sales remained consistent with its second-half guidance.
Manufacturing activity also increased, with shipments from XP Power’s Vietnam facility rising by 70% compared with the previous quarter.
The higher order intake lifted the group’s order book to £216.9 million at the end of the period, providing additional visibility over future production requirements.
Alongside the trading update, XP Power reported a reduction in net debt to £4.5 million, while its leverage ratio declined to 0.1 times.
The improvement in the balance sheet followed the release of a litigation bond and the company’s approach to investment and working capital management.
Management expects the group to move into a net cash position during the fourth quarter, although this remains subject to its financial performance and cash movements over the remainder of the year.
XP Power maintained its existing guidance for the 2026 financial year, continuing to anticipate a stronger second half.
However, the company indicated that improving revenue momentum and operating leverage are expected to support results for 2027 slightly ahead of current market expectations.
The revised outlook reflects management’s assessment of demand and operational performance, rather than a change to its current-year forecasts.
XP Power designs and manufactures power controllers used in semiconductor manufacturing equipment, industrial technology and healthcare devices.
The group operates manufacturing facilities in Vietnam, Malaysia, North America and Germany, supplying equipment manufacturers across international markets.
For investors, the principal development is the substantial increase in new orders relative to quarterly revenue, alongside a reduction in financial leverage.
The £216.9 million order book provides an indication of contracted demand, although the timing of revenue recognition will depend on production schedules and customer requirements.
The improved balance sheet also changes the group’s financial position entering the final quarter, with management forecasting a transition to net cash.
Looking ahead, investors will be monitoring the conversion of orders into revenue, production capacity, fourth-quarter cash generation and whether trading performance supports the company’s improved expectations for 2027.
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