Xaar profits rocket as new manufacturing plant comes closer
Xaar plc, the inkjet printing technology group headquartered in Cambridge, hoisted pre-tax profits 69 per cent to £11m for the year ended December 31 on turnover 23 per cent ahead at £42.8m.Xaar plc, the inkjet printing technology group headquartered in Cambridge, hoisted pre-tax profits 69 per cent to £11m for the year ended December 31 on turnover 23 per cent ahead at £42.8m.
The company is currently investing heavily in further expansion of its manufacturing capability locally, as previously reported in Business Weekly.
A new manufacturing plant is being built in Huntingdon and is scheduled to start production by the end of 2006. Planned investment of £10m will create initially 30 new jobs.
Chairman, Arie Rosenfeld said: "Our sales of established products continue to grow and our new products launched in 2006 will add growth in the medium term. For the longer term we have further new products due for commercial launch in 2007, together with an expanding range of applications ready to adopt them."
Chief executive Ian Dinwoodie identified several areas of global growth for the company to exploit. To the wider print market, inkjet continues its penetration of traditional printing markets and interest from global players will hand Xaar further significant opportunities.
Agfa has just reiterated its intention to become a major player in the industrial inkjet market and during the year several other large global imaging companies entered the market or significantly expanded their inkjet activities.
Hewlett Packard acquired Scitex Vision (a major Xaar customer) and also announced a new strategic partnership with Seiko Instruments (a Xaar licensee). Fuji Photo Film acquired Sericol Inks and Avecia Inks, both Xaar ink partners, and Dainippon Screen bought Inca Digital Printers in Cambridge.
Printheads remain the dominant proportion of Xaar’s revenues, representing 85 per cent of total group sales.
Asia remains the company’s largest market, representing 59 per cent of turnover with growth of 29 per cent in the year.
Most of Xaar’s Asian customers produce graphics printing machines and many now export a significant proportion of their equipment to the American and European markets.
Europe (and the Middle East) is Xaar’s second largest geographic market, accounting for a third of group sales with growth of 24 per cent in 2005.
Wide format graphics and coding and marking make up the majority of sales in this market and Europe continues to be a highly active and innovative region for new inkjet applications.
Sales to the Americas fell 12 per cent during the year to 8 per cent of total revenues due to one large customer ceasing its manufacturing operations in the US.
Longer term Xaar sees future growth in sales to the Americas coming from both new customers in the graphics market – where high-end sophisticated machines continue to be manufactured in the US, and new industrial applications as these develop over the next few years.
It also expects growth from South America where it now has a Brazilian sales office, through which Xaar will be supporting a number of local printer manufacturers in their planned launch of wide format printing machines in the coming year.
The graphic arts market, and particularly the wide and grand format sectors, continues to be the largest single application for Xaar technology today. Sales to the graphics printing market grew 28 per cent in the year and accounted for 77 per cent of total revenues.