Xaar shares plummet on trade warning
Cambridge inkjet printing firm Xaar plc saw its share price nosedive almost 30 per cent on Tuesday of last week after a gloomy trading update.
Revenue in the first half year to June 30 was £22.5 million, as previously announced, including the impact of a £4.3m revenue reversal relating to Xaar 1201 Thin Film printhead inventory being returned to the business.
As part of the interim results process, a review of the group’s holding of Xaar 1201 printhead inventory and near term prospects for sale has taken place which has resulted in a reassessment of realisable value.
The company now considers it prudent to make a provision of £5.7m which will be reflected in the first half results.
Trading for the remainder of the year is expected to be weaker than previously anticipated.
This is principally due to lower sales volumes of Xaar 1201 and Xaar 2001 printheads as a result of slower than expected new printer installs by OEMs and credit and sales channel issues on Xaar 1201.
As a result, the board now expects sales in the second half of the year to be similar to those in the first half. The group has net cash balances of £21.6 million.
Management has deferred announcement of its interim results by 16 days to September 26 while it continues to focus on its strategic negotiations and options for progress.