XP Power Ltd (LON:XPP) expects to post 2016 results in line with forecasts after it saw a "strong finish" to the year.
The critical power control components firm said revenue for the final three months of the year was £37.1mln, up from the £27.8mln recorded in the same period a year earlier, and the £32.3mln seen in the third quarter of 2016.
It added that overall revenue for 2016 was £129.8min, up 18% from last year and a 7% increase on a constant currency basis.
XP Power also said it intends to significantly hike its dividend to “not less than” 25p for the fourth quarter, up from a 16p payout in the previous quarter.
For the full year, the firm added, its total dividends will be at least 70p, which would be 6% higher than the 66p total it paid out in 2015.
In its statement, the group said: "We enter 2017 with positive momentum and therefore expect that we should be able to show further growth in revenues in 2017.”
In reaction to the update, analysts at Peel Hunt upgraded their rating for XP Power to “buy” from “add” and raised their price target to 2,230p from 1,700p.
In a note to clients, they said: “A strong Q4 order intake in FY16 and early indications of even better in FY17 suggest that there is room for upgrades and we lift our EPS forecasts by 4%.”
They added: “The shares have lagged the peer group and are now much too lowly rated.”
However, XP Power shares had still edged lower late morning, down 2.5p at 1,750p.