In a move to safeguard its short-term financial health, XP (NASDAQ:XP) Power, a manufacturer of power controllers listed on the London Stock Exchange, has withdrawn its plan to pay a second-quarter dividend of 19.0 pence per share on October 12th. The decision, which deviates from the company's earlier intention, is set to conserve £3.75 million ($4.6 million) in cash for the firm.
The cancellation of the dividend payment came after feedback from major shareholders and the board's assessment of the company's financial outlook. This change in strategy aligns with the company's focus on controlling its cost base and managing cash resources effectively amid lower-than-anticipated profit forecasts for 2023.
This decision aligns with the InvestingPro Tip that XP Power does not pay a dividend to shareholders. It's worth noting that the company's market cap stands at $106.46M, according to InvestingPro data. The company's P/E Ratio is -4.69, which suggests that the company has been operating at a loss.
The company's revenue for the last twelve months (LTM2023.Q2) was $2.59M, with a negative growth rate of -28.0%. This aligns with another InvestingPro Tip that XP Power's revenue has been declining at an accelerating rate.
Despite this decision to halt dividends for now, Jamie Pike, the Chair of XP Power, expressed a positive long-term view for the company. He also indicated a commitment to realize its potential and plans to resume dividend payments when deemed appropriate. This mirrors the InvestingPro Tip that analysts predict the company will be profitable this year.
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