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Xaar first half loss widens on falling revenue, outlook still positive

19th Sep 2023 12:18

(Alliance News) - Xaar PLC on Tuesday said first half loss widened from a year earlier as revenue fell, but stressed it was confident of meeting its full-year expectations.

Shares in Xaar were down 6.5% to 164.15 pence each in London on Tuesday at midday.

In the six months that ended June 30, the Cambridge, England-based inkjet printing technology firm said pretax loss widened to GBP1.8 million from GBP301,00 a year earlier.

Revenue fell 5.7% to GBP34.5 million from GBP36.6 million, falling faster than Xaar's expectations of a 5.2% fall to GBP34.7 million, as disclosed last month.

General & administrative expenses almost doubled to GBP10.3 million from GBP6.0 million, while research & development expenses fell 21% to GBP2.6 million from GBP3.3 million. Sales & marketing expenses also fell 11% to GBP3.2 million from GBP3.6 million.

Xaar said last month that it expected adjusted pretax profit to fall in line with its expectations due to successful factory reorganisation, offset by the sale of GBP1.8 million of non-core intellectual property assets.

On Tuesday, it reported adjusted pretax profit rose 20% to GBP1.8 million from GBP1.4 million.

"We remain focused on the successful delivery of our strategy and taking advantage of the significant opportunities that will drive profitable growth. We have seen continued positive momentum across the business, with increased visibility over customer product launches and a robust pipeline," said Chief Executive Officer John Mills.

"Our products, especially Aquinox, are generating strong interest from existing and new customers, underlining our leadership in printing highly viscous fluids. Phase 1 of our factory efficiency programme has been successfully completed on time and within budget positioning us to deliver increased efficiency and capacity, whilst realising significant cost savings."

Looking ahead, Xaar said it remains confident of delivering full-year results in line with its expectations, while "remaining vigilant to broader macroeconomic conditions".

It expects market conditions within the sectors it operates in to improve during the second half of 2023. Coupled with increased customer product launches, it expects this will drive higher demand for Xaar printheads, despite sales volumes in its Printhead business continue to be affected after the lifting of Covid-19 restrictions in China.

Xaar said its focus on diversifying across a range of market sectors means that further customer product launches are expected in 2024, which it hopes will provide confidence in delivering its medium-term growth plans.

"Whilst being mindful of the external environment, we remain optimistic about the future with encouraging signs of recovery in key markets and the business in good shape to make further progress and to deliver a full year performance in line with our expectations," Mills continued.

"With a substantial market opportunity and the progress made, we remain well positioned to realise our exciting potential."

By Greg Rosenvinge, Alliance News reporter

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