Xaar plc

Trading Update

Xaar plc ("Xaar", "the Group" or "the Company"), the leading inkjet printing technology group, today announces a trading update for the six months ended 30 June 2021.

TRADING

The Board is pleased to announce that trading for the six months ended 30 June 2021 has been in line with its expectations. Revenue for the period is expected to be approximately £26 million, representing an increase of 11% and 8% relative to H1 and H2 2020 respectively.

The Printhead business continues to perform well following the ongoing successful roll out of the ImagineX platform and launch of the Xaar Nitrox printhead in April, which is attracting new customers and increased opportunities to broaden the offering in applications where our products are market leading. Whilst we are seeing some COVID-19 related supply constraints, we are taking the required actions to mitigate their impact and continue to be optimistic on the future trading environment.

Revenues for the Product Print Systems business (EPS) are in line with management expectations, being below that achieved in H1 2020. Whilst the underlying performance remains on track and the business continues to be profitable, H1 2021 results have been impacted by non-cash adjustments relating to slow moving and obsolete inventory following the implementation of planned process improvement and strategy actions announced at our full year results.

Negotiations to divest Xaar's interest in Xaar 3D are now at an advanced stage and a further update will be announced to shareholders in due course.

BALANCE SHEET AND LIQUIDITY

The Group retains a strong balance sheet and cash position. Net cash at 30 June 2021, excluding cash from the 3D business (which is classified as an asset held for sale) was £17.1 million. This represents a decline of £1.0 million in net cash for continuing operations since 31 December 2020, which has been primarily driven by planned capital investment, including the relocation of Xaar's Cambridge office which will generate £0.7 million of annual cost savings. The Group maintains a strong cash focus and disciplined cost controls.

TRADING OUTLOOK

Whilst the COVID-19 pandemic continues to have a wider economic impact, our short-term outlook remains positive with a healthy order book across the business. We continue to focus on implementing our strategy to enable future growth and remain on-track to return to profitability in the medium term.

We announced on 12 July 2021 the acquisition of FFEI Limited ("FFEI"), a leading integrator and manufacturer of industrial digital inkjet systems and digital life science technology. The addition of FFEI strengthens Xaar's capabilities and skills and will accelerate Xaar's existing growth strategy. 

John Mills, Chief Executive Officer, commented:

"We are pleased with our continued good performance which shows the positive momentum we have in the business. Our strong foundations remain, and we continue to gain new customers and see positive re-engagement with the business as our strategy is proving to work. We are investing in capability and capacity to drive future growth and the addition of FFEI to the Group will provide us with further opportunities to grow the business and accelerate our strategy." 

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