19th Mar 2015 07:57
LONDON (Alliance News) - Inkjet printing technology firm Xaar PLC Thursday said it expects 2015 to be a "year of stabilisation" as it prepares to return to growth in 2016, forecasting a further reduction in revenue for 2015 as lower demand in its key market of ceramic tiles led it to post a decline in pretax profit for 2014.
The company has been hampered throughout 2014 by a slow-down in the property and construction markets in China, leading to lower demand for Xaar's ceramic tile products during the second half of 2014 after a period of strong growth. This was compounded by slower progress than expected in other applications.
Xaar has slashed costs in an effort to counter its reduced revenue, cutting 20% of its global workforce, and reducing its total annual cost base by GBP9 million.
Xaar posted a pretax profit of GBP23.1 million for 2014, compared to GBP40.1 million in 2013, as revenue fell to GBP109.2 million from GBP137.1 million on the back of the weaker demand. It said that whilst its performance in 2014 was "clearly disappointing", it suggested it should be seen as a step change correction against "an overshoot in 2013".
It is is forecasting revenue of around GBP90 million for 2015.
Xaar proposed a final dividend of 6 pence, taking its total dividend for the year to 9.0 pence, up from 8.0 pence a year before.
The company said that generating revenues from a wider, more balanced set of markets is a key objective. It has been working on its 'thin film' technology development during the year, and said it is now working on early product demonstrations with potential partners. It expects to start sampling the first product using the technology, the Xaar 5400, at the end of 2015 with the first commercial revenues planned for late 2016.
"Despite the short term reduction in revenue our ambitions are undiminished; Xaar has great people, products and technology, remains strongly profitable, retains a robust balance sheet and has substantial growth opportunities ahead," said newly appointed Chief Executive Doug Edwards in a statement.
Edwards, formerly an executive at Eastman Kodak Co, took up the position in January succeeding long-time Chief Ian Dinwoodie.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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