Xaar Regulatory News (XAR)

Xaar plc

TRADING UPDATE

Xaar plc ("Xaar" or "the Group"), the inkjet technology group headquartered in Cambridge, announces an update on current year trading.

Demand has been strong during the second half of the year, with sales in the fourth quarter growing ahead of the Board's expectations. The Group now expects to achieve revenue for the year ending 31 December 2012 in the range of £83-85 million, representing growth of over 20% compared to the £68.7 million achieved in 2011. The growth in revenue is the net result of higher product sales and a reduction in royalty income.

As a result of the strong sales performance, the Group expects to achieve profits in 2012 ahead of current market expectations, with an anticipated adjusted operating profit margin* of approximately 20%, versus the 15% achieved in 2011, driven by manufacturing and operating efficiencies from higher levels of production. The Group continues to accelerate its investment in R&D and marketing to support product and technology development, with headcount in these functions growing by over 50% during the year.

The anticipated sales performance for 2012 will mean that Xaar will have doubled revenue in a three year period, delivering consecutive annual revenue growth in excess of 20%. Looking forward into 2013 the Board expects continued progress but anticipates more modest growth.

The final results for 2012 are expected to be announced on Tuesday 19 March 2013.

* Adjusted operating profit excludes share based payment charges, intra-group exchange differences and non-trading items.

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