Leading provider of critical power components to the electronics industry XP Power (XPP) has seen its shares drop 55% over the last six months to a low of 898p prompted by two profit warnings.

The drop continues the fall from grace for the shares which peaked around £55 in August 2021.

In a year-end trading update (16 February), the company warned 2024 revenues would be ‘significantly’ below market expectations.

It said discussions with customers within the healthcare and industrial technology sectors confirm ‘unusual, temporarily soft demand conditions and destocking.’

XPP noted cyclicality in these sectors is not typical and reflects inventory reductions in response to shorter delivery lead times.

At the same time, the firm is seeing a continuation of the ongoing cyclical slowdown in the semiconductor manufacturing equipment sector, although this is expected to improve as the year progresses.

Current demand weakness is expected to be short-lived although the timing and speed of recovery is harder to predict, the company cautioned.

Consensus analyst sales forecasts now call for a slight fall in 2024 revenues to £311 million which compares to growth expectations of around 3% in September 2023 before the first profit warning.

Analysts have revised down their earnings forecasts by roughly 40% over the last year. If revenues do indeed fall in 2024 it will be the first annual drop since 2009. 

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