Inkjet printing technology group Xaar, headquartered in Cambridge, saw its share price rise 19.50p (8.72 per cent) to 243p after revealing a bullish trading performance.

And the company said it expects this level of trading to continue during Q4, leading to a strong full-year performance.

The tide of good news was contained in an interim management statement covering trading from July 1.

Sales of Platform 3 (P3) products in Q3 grew ahead of expectations through the successful completion of the early stages of the capacity expansion programme.

Xaar said that this had relieved the short term supply constraint, slightly earlier than anticipated, with the result that P3 revenues were now demand driven.

The remaining critical stages of the capacity expansion programme were on track for completion through the fourth quarter of 2011 and the first half of 2012, the company added.

Sales of Platform 1 (P1) products performed in line with expectations, with revenue for Q3 2011 slightly lower than Q2 2011 but forward visibility remains limited, Xaar said.

Royalty income for the year to date has increased compared to the same period last year, reflecting, in part, some market share loss to licensees in markets serviced by P1 products.

The group's balance sheet remains strong with net cash at September 30 of £16.8 million (June 30, £20.6m; December 31, 2010: £22m). The reduction in net cash reflects planned expenditures related to the capacity expansion.

The company said that, to date, the global economic gloom had not impacted Xaar's trading. But the board remained cautious and continued to monitor sales channels closely.