Company Announcements

Xaar plc

Trading Update

Xaar plc ("Xaar", "the Group" or "the Company"), the leading inkjet printing technology group, today announces a trading update for the year ended 31 December 2021.

TRADING

Ended the year strongly with further operational and strategic progress

·    Revenue for the year is expected to be approximately £59 million, representing an increase of 23% relative to 2020. Organic growth before the effects of the acquisition of FFEI was 12%

·    Strong revenue growth and cost management actions mean the Board expects to report an adjusted profit for the second half of the year

Commercially and operationally on track

·    Printhead business performed well with on-going engagement with new customers and re-engagement with previous customers. We continue to successfully roll out the ImagineX platform and launched two new products; Xaar Nitrox in April 2021 and Xaar Irix in September 2021 and will continue to strengthen our offering with more products in the pipeline for 2022

·    FFEI has been successfully integrated and strengthens Xaar's capabilities and skills. This will accelerate Xaar's existing growth strategy and widen the product portfolio further engaging UDI (User Developer Integrator) customers

·    Product Print Systems business ("EPS") delivered improved performance demonstrating strong revenue growth following the effective implementation of operational changes and progress in developing a modular approach to products. As previously announced the 2021 results were impacted by non-cash adjustments relating to slow moving and obsolete inventory following the implementation of planned process improvement and strategy

Strengthened supply chain position

·    Investment in inventory of £7 million in the year to successfully secure materials to meet expected 2022 production requirements

·    Further proactive actions taken to adapt product designs to accommodate alternative components increasing our resilience to supply chain constraints

BALANCE SHEET AND LIQUIDITY

The Group retains a strong balance sheet and cash position. Net cash at 31 December 2021 was £25.2 million. This represents an improvement of £7.1 million in net cash since 30 June 2021, which has been primarily driven by the £9.3 million initial consideration received for the Xaar 3D divestment and continued strong cash generation in our Printhead business.

We will provide more detail of both 2021 results and outlook for 2022 in our full year results announcement.

John Mills, Chief Executive Officer, commented:

"We ended the year well with an improved second half performance which shows the positive momentum we have in the business. Strong order intake over the last few months gives us confidence of maintaining this momentum into 2022. The investment in working capital gives increased certainty in our ability to maintain supply to our customers throughout the year, a year in which we expect to see further growth. We will continue to invest in capability and capacity to drive growth and deliver further opportunities to grow the business and accelerate our strategy." 

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