XP Power, one of the world's leading developers and manufacturers of critical power control components for the electronics industry, is today issuing an update on taxation charges for the year ended 31 December 2017.
The recently enacted Tax Cuts and Jobs Act in the United States is expected (subject to audit) to result in a non-cash tax credit in 2017 relating to the revaluation of US deferred tax balances of circa £5.2m, based on the net deferred tax liability at the end of 2017. This credit is as a result of the reduction in the federal tax rate from 35% to 21% and will be excluded from adjusted earnings.
The Company has also received notice that claims relating to the Development and Expansion Incentive (DEI) in Singapore have been accepted by the Inland Revenue Authority of Singapore resulting in a circa £1.3m refund of Corporation Tax paid in 2015 and 2016. This will also be excluded from adjusted earnings.
We will continue to work through the full impact of these changes but expect the Company's future effective adjusted tax rate to be in the range 15-17% depending on regional mix of profits.
Duncan Penny, Chief Executive Officer
Gavin Griggs, Chief Financial Officer
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Note to editors
XP designs and manufactures power controllers, the essential sub assembly in every piece of electrical equipment that converts the power from the electricity grid into the right form for the equipment to function. XP 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 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 has invested in research and development and its own manufacturing facilities in China, North America and Vietnam, to develop a range of up to date products based on its own intellectual property that provide its customers with significantly improved functionality and efficiency. Headquartered in Singapore and listed on the Main Market of the London Stock Exchange since 2000, XP serves a global blue chip customer base from 27 locations in Asia, Europe and North America.