REG - Xaar PLC - Trading Update

XaarAnnouncement

29/11/2023 07:00

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RNS Number : 9778U  Xaar PLC  29 November 2023

29 November 2023

 

XAAR plc

 

TRADING UPDATE

 

Xaar plc ("Xaar", "the Group" or "the Company"), the leading inkjet printing
technology group, today provides a trading update.

 

PROFIT AHEAD OF EXPECTATIONS FOR 2023

·    Through disciplined cost management, a favourable product mix and new
customer product launches the Group is expected to deliver an adjusted profit
before tax of between £2.5 million and £3 million, which is ahead of Board
expectations.

 

·    Trading conditions have become more challenging in H2 2023 due to the
wider economic environment. As a result, 2023 full year revenues are expected
to be between £70 million and £72 million.

 

2024 OUTLOOK

 

·    The Board anticipates that weaker demand during Q4 2023 will continue
into 2024, and together with delays in some customer product launches, will
result in lower revenue and adjusted profit in 2024 than previously
anticipated. We are optimistic and remain focused on delivering significant
opportunities in our customer pipeline.

 

·    In 2024 the Group also faces the full effect of increased input
costs. The lower than previously expected revenue growth in 2024 will not be
sufficient to fully absorb the additional costs, which will impact Gross
Margin.

 

·    The Group continues to implement initiatives designed to improve
operating efficiencies throughout the organisation and to reduce operating
costs, whilst continuing to deliver on our strategic plan.

 

·    The Board remains confident in the medium-term outlook as our
opportunities continue to strengthen and further product launches are expected
in 2024. This provides confidence in delivering our mid-term growth plans,
whilst ensuring a balance between targeted investment and expected returns in
the short term.

 

BALANCE SHEET

 

The Group remains well capitalised with a strong balance sheet and with a net
cash position of £3.7 million as at 28 November 2023 which is in line with
management expectations. The Group also has an undrawn revolving credit
facility of £5m.

 

John Mills, Chief Executive Officer, commented:

"Whilst the external trading environment is challenging, we remain focused on
the delivery of our strategy and taking advantage of the significant
opportunities we have that will drive profitable growth. Our products continue
to generate strong interest from customers, demonstrating our leadership in
printing highly viscous fluids with all the performance and sustainability
benefits they deliver.

"Due to the current geo-political and macro conditions, bringing these
products to market is taking longer than expected, however, we are optimistic
about the future, and we are well placed to benefit as trading conditions
improve."

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

 

 

 

Enquiries:

 

 Xaar plc                              +44 (0) 1223 423 663
 Ian Tichias, Chief Financial Officer
 John Mills, Chief Executive Officer
                                       +44 (0) 207 353 4200

 Teneo Communications

 Giles Kernick

 Olivia Lucas

 

 

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