Xaar stands tall despite shareholder flight
Shareholders of Cambridge inkjet printing technology pioneer Xaar plc face a major test of faith as the company unveils new solutions to underpin future growth.
Despite a decent set of interim results to the end of June, shareholders took flight with the stock around 10 per cent lower at various points of this morning.
Some of the share chat on London Stock Exchange was none too flattering either as backers varied in their perception of Xaar as either a potential phoenix or an early turkey.
Even the unveiling of a revolutionary new printhead – the Irix – failed to lift spirits. The neutral view must surely be that Xaar has built the foundations for a new phase of growth and that deserters may well regret selling their shares.
Revenue for the six months was up to £26.3 million from £23.7m and gross profit rose to £7.6m from £6.3m. This is despite the company boosting spend on R & D to £2.6m from £2.1m.
On total operations the loss before tax of £5.6m was not far above the £4.8m last time and the total loss virtually flatlined.
Strategically, Xaar looks in good shape. Its new corporate HQ in Cambridge is expected to deliver £0.7m of annual cost savings and a new customer service has been opened in Shenzhen, China. Besides some positive operational changes, watch out for acquisitions and a planned divestment of Xaar 3D very soon.
CEO John Mills said: “We are pleased with our continued strong performance which, despite challenging market conditions, demonstrates the success of our strategy and underlying strength of the business.
“These results reflect the positive momentum we have generated across the business. Our foundations remain strong as we continue to gain new customers and positively re-engage in our core markets.
“The COVID-19 pandemic continues to cause disruption for business – however we are determined to minimise interruption to the supply of printheads and are well-positioned to withstand further volatility caused by the pandemic.
“Launching the Xaar Irix today further demonstrates our drive and ability to deliver new products from our ImagineX platform. Continued investment in capability and capacity, together with the addition of FFEI will drive future growth and accelerate strong performance.”