Xaar Regulatory News (XAR)

Xaar plc

Trading update 

Xaar plc ("Xaar", "the Group" or "the Company"), the leading inkjet printing technology, today announces a trading update for the six months ended 30 June 2020.

TRADING

The Board is pleased to announce that trading for the six months ending 30 June 2020 has been in line with expectations and good progress has been made implementing our strategy. Revenue for the period is expected to be £23.7m, representing a decline of 7% relative to H1 2019 and in line with H2 2019.

The Printhead business continues to perform well as changes in the go to market strategy have seen early successes with several new accounts won and customers re-engaging with the business. The restructuring undertaken in the second half of 2019 has left the business well positioned both to deal with the current economic climate but also to deliver a sustainable and strong business in the longer-term.

The Product Print Systems business has been impacted by COVID-19 with annuities and machine sales both below our original plan. Despite that, good progress has been made in embedding the new strategy and driving operational performance with revenue slightly increased relative to the first half of 2019.

The 3D business has continued to make good progress. Despite minor delays due to lockdown restrictions, product development and testing is progressing well and investment in the go to market strategy is underway.

BALANCE SHEET AND LIQUIDITY

The Group retains a strong balance sheet and cash position. Cash and cash equivalents at 30 June 2020 were £23.9m with both the Printhead and Product Print Systems business improving their cash balance relative to 31 December 2019. The 3D business continues to be well positioned to fund its development and go to market needs. The Group maintains a strong cash focus and disciplined cost controls.

CURRENT TRADING AND OUTLOOK

The Group continues to manage operations in response to the constraints caused by COVID-19 with the priority of safeguarding the health and wellbeing of our employees. Despite these constraints, operations have remained effective and efficient.

As a result of the continued uncertainty surrounding economic conditions globally, the Board will not be providing guidance at this time. The short-term order book is healthy, and the business is well placed to withstand the difficult trading environment. The Board remains focused on the medium-term strategy to return the business to profitability and growth and will provide more details on our future plans at the half year results in September.

John Mills, Chief Executive Officer, commented:

"We are pleased with our performance for the first half which is testament to the new strategy we have in place and all of our staff who have managed the business well during a tough period. It has been particularly pleasing to see success in re-engaging with our core customer base whilst also winning new business.

Although short-term uncertainty will remain, the changes we have made enable us to be well positioned for the long-term. The fundamentals remain compelling, the market opportunity remains significant and we are excited about future of the business."

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