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Xaar shares down on warning over China hit on Printhead business

12th Jan 2023 12:13

(Alliance News) - Xaar PLC shares were down on Thursday, as it issued a warning over the impact of uncertainty in China on its Printhead business.

Shares in the Cambridge, England-based industrial inkjet manufacturer were down 12% to 177.25 pence each in London on Thursday around midday.

Xaar said it expects revenue in 2022 to be around GBP74 million, up from GBP59.3 million a year earlier. This represents year-on-year growth of 24%, driven by a combination of organic growth and acquisitions.

The company added that it expects to deliver an on track adjusted profit for the year. In 2021, Xaar reported an adjusted pretax loss of GBP571,000.

Meanwhile, net cash as at December 31, 2022 fell to GBP8.6 million from GBP25.2 million a year prior.

The company noted that its factory reorganisation began in December and is progressing well and on schedule for completion by March. It explained that the project is expected to deliver increased efficiency, reduce power usage, and reduce costs.

It added that the integration of recent acquisitions, FFEI Ltd and Megnajet Ltd, have been completed successfully and they are both contributing "positively" to results.

Xaar bought FFEI, an integrator and manufacturer of industrial digital inkjet systems and digital life science technology, in July 2021. It then bought industrial ink management firm Megnajet in March 2022.

However, Xaar said that sales volume in its Printhead business continue to be affected by the uncertainty in China, which is expected to continue in the short term as Covid cases increase. It added that it remains unclear when normal levels of business will return.

Chief Executive John Mills said: "We expect to deliver strong profitable revenue growth and the important milestone of achieving full year profitability representing great progress against our plan and remain well positioned for the business to achieve its exciting potential."

By Sophie Rose, Alliance News reporter

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