REG - Xaar PLC - 2025 INTERIM RESULTS
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RNS Number : 8725U Xaar PLC 12 August 2025
12 August 2025
Xaar plc
2025 INTERIM RESULTS
KEY PROSPECTS PROGRESSING IN LINE WITH EXPECTATIONS
Xaar plc ("Xaar", the "Group" or the "Company"), the leading inkjet printing
technology group, today announces its unaudited interim results for the six
months ended 30 June 2025.
Financial Summary:
Continuing operations: H1 2025 H1 2024(1) Change
Revenue £27.2m £25.5m 7%
Gross margin % 36.5% 37.4% (90)bps
Gross R&D investment(2) £2.0m £2.0m (1)%
Adjusted EBITDA(3) £0.76m £0.90m (15)%
Adjusted profit / (loss) before tax (£0.70m) (£0.64m) (9)%
Reported loss for the period (£2.6m) (£1.8m) (49)%
Adjusted earnings per share (0.7p) (0.6p) (25)%
Basic earnings per share (3.3p) (2.3p) (48)%
Total operations:
Reported loss for the period (£3.1m) (£2.6m) (19)%
Basic earnings per share (3.9p) (3.3p) (18)%
Net cash/(debt) at period end(4) £5.1m £8.2m(5) (38)%
Financial Highlights:
- H1 2025 performance as expected with revenue up 7% to £27.2 million
(H1 2024: £25.5 million)
- Printhead revenue up 20% to £19.9 million (H1 2024: £16.5
million), contributing 73% of Group total, led by jewellery wax revenue
growing from £0.6 million in H1 2024 to £3.3 million in H1
- Printhead operating margin up 70 bps to 10.4% driven by robust
pricing decisions and tight cost control
- Printhead new business(6) revenue growth of 96% to £9.8 million (H1
2024: 5.0 million)
- Ceramics and Glass beginning to stabilise with revenue of £3.6
million (H1 2024: £3.8 million)
- Engineered Print Systems' (EPS) revenue declined 16% to £6.3
million (H1 2024: £7.5 million) driven by hesitant capital investment from
tariff uncertainty; pipeline now rebuilding
- Proactive cost management across the Group with gross margin stable
at 36.5% (H1 2024: 37.4%). Adjusted operating expenses well controlled at
£10.5 million (H1 2024: £10.0 million)
- R&D investment at c.7% of revenue to capture new market
opportunities
- Reduction in net cash due to investment in capital equipment and
development spend to drive future growth
Strategic Highlights:
- Jewellery wax: Our partner OEM, Flashforge, launched their Waxjet
530 printer in April 2025 with strong revenue growth. New to this market, we
have taken considerable share ahead of plan through all our OEM partners
- Electric vehicle battery coating: Collaboration with Sokan
announced, alongside partnerships with Shifang and Omijia, for the production
of next-generation battery coating solutions
- Automotive coating: Axalta and Dürr demonstrating technology to
premium car manufacturers and now receiving first quote requests for mid 2026
deliveries
- Desktop 3D printing: Learning from peer success with a similarly
priced 2.5D product, Flashforge will launch with a more direct go-to-market
strategy around year end
John Mills, Chief Executive Officer, commented:
"The start of 2025 has been encouraging with the swift progress made in the
jewellery wax market, reflecting the disruptive impact our technology will
have in our target markets once OEM products have been launched.
Opportunities in EV battery coating, automotive coating and desktop 3D are
setting the Group up for sustainable medium-term growth with key developments
within each market progressing as planned. As expected, EPS performance is
constrained due to tariffs adding to existing end market uncertainty and
historic weakness in the order pipeline. However, this is being addressed, and
we look forward with increased optimism in the medium-term prospects of this
business.
Alongside a strong balance sheet, the Group remains well positioned to deliver
on the substantial opportunities in front of us, and we look forward to
generating accelerating growth to the benefit of our shareholders."
Outlook
Our expectations for 2025 remain unchanged despite the additional uncertainty
brought by the introduction of tariffs and the continuation of challenging
trading conditions reported in March 2025. Our strength is our attractive
value proposition centred around the ability to jet highly viscous liquids.
We continue to anticipate that revenue will be second half weighted with order
volumes expected to grow steadily throughout the year and into FY26. Printhead
revenue is expected to be strong in the second half, whilst in EPS, the tariff
induced end market slowdown is expected to continue to impact revenue and
profit whilst the pipeline is being rebuilt.
Notwithstanding the uncertainties of the global geopolitical environment and
tariffs, our financial performance will be driven by the maturing of recent
product launches and the exact timing of new ones. Management remains
confident of meeting current expectations.
It also remains our strong belief that in the medium term, our focus growth
areas will deliver meaningful revenue at attractive margins.
Contacts
Xaar plc +44 (0) 1223 423 663
John Mills, Chief Executive Officer
Paul James, Chief Financial Officer
Investor Relations Xaar_IR@cen-grp.com (mailto:Xaar_IR@cen-grp.com)
Stephen Lamacraft
Daniel Verity
A presentation for analysts and institutional investors will be held via
webcast at 09:00 today. To access the meeting, please sign up using the
following link: Xaar Interim Results 2025
(https://storm-virtual-uk.zoom.us/webinar/register/WN_DglM1otbQLy5xmDXrBhsHg)
. For further details, please contact Xaar_IR@cen-grp.com.
1 Prior year numbers restated to reflect continuing operations post the
disposal of FFEI Life Science business.
2 Group R&D investment exclusive of any capitalised costs as used to
determine adjusted profit before tax.
3 EBITDA is calculated as statutory operating profit before depreciation,
amortisation and impairment of property, plant and equipment, intangible
assets, and goodwill. Adjusted EBITDA is calculated as EBITDA excluding other
adjusting items as defined as follows. Adjusted Measures exclude the impact of
share-based payment charges, exchange differences relating to intra-group
transactions, gain on derivative financial instruments, restructuring and
transaction expenses, research and development expenditure credit, fair value
loss or gains on financial assets at FVPL, amortisation of acquired
intangibles, and discontinued operations as reconciled in note 3.
4 Net cash includes cash, cash equivalents and treasury deposits, net of
invoice discounting facility.
5 Net cash/(debt) as of 31 December 2024
6 New business is defined as revenue from the sale of printheads used in OEM
products that have been launched since 2019.
Figures and percentages included in this report are subject to rounding
adjustments arising from conversion to £millions from actual figures.
Accordingly, figures shown for the same category presented in different tables
may vary slightly, and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
About Xaar plc
Xaar is an inkjet innovator, providing printheads and technologies for
Original Equipment Manufacturer (OEM) and User Development Integrator (UDI)
customers worldwide.
We develop and manufacture reliable and technically advanced printheads that
enable end customers to produce high quality results for both existing and new
applications. Our precision inkjet technology facilitates the use of high
viscosity inks, which are thicker with less permeation into surfaces, meaning
improved print consistency and uniformity. These unique characteristics also
typically have lower financial, environmental, water and energy costs,
creating less fluid waste than other fluid application methods. We are the
only printhead manufacturer that can reliably jet inks up to and above 100
centipoise 1 (#_ftn1) at jetting temperature (1000 cP at ambient
temperature), with our nearest competitor limited to printing inks with less
than a third of this viscosity.
By helping customers lay down precise volumes of high viscosity inks and
fluids with absolute pin- point accuracy, time after time, Xaar's inkjet
printheads and technologies meet the needs of numerous markets. Not only do we
provide solutions for traditional 2D printing, but our technology also
facilitates the laying down of complex fluids onto surfaces to create 3D
images.
Collaboration is at the very core of our business. Xaar works as a trusted
partner from sites in Europe, North America and China, providing expert
insights and technical support every step of the way. With over thirty years'
experience, around 150 patents registered or pending, and major ongoing
R&D investment, Xaar's digital printhead and precision jetting
technologies create countless opportunities for today's growing sustainable
manufacturing requirements.
Chief Executive Officer's Statement
Market recognition of our technology's ability to act as an enabler for new
applications continues to gain momentum. Focussing on sizable new
applications, such as EV battery coating, automotive coating and desktop 3D
printing, where the incumbent solution is either technologically limited, too
expensive or too inefficient, represents the main medium-term revenue
opportunity, with each avenue for growth showing strategic progress.
In the near-term, the jewellery wax market, another of our key focus areas,
highlights the disruptive and rapid scaling potential of our technology. From
a standing start in 2023, we now supply printheads to four of the five largest
players and we expect to have secured substantial share by the year end. With
the opportunities within our other key markets progressing well, the wax
success illustrates the expected commercial ramp up once we have leading
participants adopting our technology.
The weak performance of EPS has resulted in a Group performance headwind
partially offsetting the revenue growth from new Printhead business which is
defined as revenue generated from the sale of printheads used in OEM products
that have been launched since 2019. However, with 96% printhead new business
revenue growth year-on-year, and a CAGR of 26% since 2019, new printhead
products now account for 49% of divisional revenue. The increased
diversification of the business, compared to historic overreliance on the
ceramics market, ensures that the foundations for the future are well set.
Financial Highlights
During the first half of 2025, we delivered 7% revenue growth to £27.2
million (H1 2024: £25.5 million) against a period of heightened global market
uncertainty given the dynamics in the US. Printhead revenue grew £3.4
million, 20% year-on-year, bolstered by significant revenue growth within the
jewellery wax market with £3.3 million of revenue up from £0.6 million in H1
2024. Printhead revenues also benefited from decreasing instability in the
ceramics market; the Ceramics and Glass segment generated £3.6 million of
revenue in H1 2025 (H1 2024: £3.8 million). Continued momentum in our new
printhead business alongside the reduced headwind from ceramics bodes well for
the future of the business.
Revenue for EPS fell £1.2 million to £6.3 million (H1 2024: £7.5 million),
with the previous period benefitting from a multi-year, multi-unit order from
a single customer and market uncertainty continuing to delay the rate of new
customers switching from analogue to digital. However, under new management,
the order book is being rebuilt which should translate to revenue growth in
2026.
Megnajet has also been impacted by a weaker capital investment environment
caused by higher uncertainty as revenue decreased £0.2 million to £1.1
million (H1 2024 £1.3 million).
We continue to make operational efficiency savings, with gross margin
remaining stable at 37% and operating expenses remaining broadly flat.
The Group continues to retain a strong balance sheet, with a net cash position
at period end of £5.1 million, down 38% from £8.2 million at the end of
2024, partly as a result of ongoing investment in capital equipment and
capitalised R&D spend. This expenditure is driven by our commitment to
develop cutting edge, unique technology which will open up new opportunities
for Xaar in the future. While we remain focussed on delivering the
opportunities in front of us, and will utilise cash accordingly, we will
continue to invest for the long-term benefit of the Group.
Strategic Update
The almost universal acceptance and adoption of our technology in the
jewellery wax market is a significant milestone for Xaar, providing the
strongest evidence yet that our technology can be transformative in end
markets, once adopted. When the first major OEM launched a product using our
printheads, competitors were compelled to rapidly launch similar products to
match the performance that our printheads deliver. As a result, we have
progressed from zero to significant market share within two years.
Elsewhere, progress within the major opportunities of EV battery coating,
automotive coating and desktop 3D printing markets remains encouraging and in
line with our expectations. These markets each have substantial long term and
repeat revenue potential and are central to the strategic growth ambitions of
the Company. As we become increasingly embedded with our customers, with our
technology playing a key role in their market share aspirations, the
durability of our revenue is enhanced.
With additional opportunities in markets such as textiles and corrugate, as
well as the potential for a cyclical recovery in ceramics, our product
portfolio has much more diversity in end markets and customers than it has
ever had, providing both revenue growth optionality and a more resilient and
stable foundation going forward. By focussing on applications where our
printheads are opening up new markets or revolutionising the existing market,
rather than competing on price and quality alone, we can take significant
share across several substantial markets in the medium-term.
Printhead
EV Battery Coating opportunity
The problem we solve: New 800-volt battery technology, which incorporates
faster charging times, increases heat generation which can be incompatible
with current battery coating techniques. This is the primary issue with the
incumbent solution, which utilises a plastic wrap to insulate batteries. Using
spray painting to insulate the battery overcomes this drawback. However, with
c.40% of paint being lost in the process, this requires a paint recovery
system which generates incremental costs, severely limiting its uptake with EV
battery manufacturers. As demand for higher voltage EV batteries increases, so
does the demand for a high-yield, low-cost solution that eliminates the risk
of air bubbles caused through delamination of plastic film technology, has
greater rub resistance and peel strength whilst also being fire retardant with
higher thermal properties.
Storage batteries provide a further incremental opportunity for Xaar as these
also have a coating requirement and customers in this market face the same
issues as EV manufacturers.
The Xaar solution: Inkjet coated EV batteries, as enabled by Xaar technology,
can withstand far greater levels of heat than plastic wrapping and have a
significantly higher yield than spray painting, meaning minimal waste with no
need for a costly paint recovery system. As well as addressing safety
concerns, research has shown that switching from the incumbent film technology
to inkjet substantially reduces cost per unit.
The maturity of the opportunity: A year ago we launched two new printheads,
the Xaar eX and Nitrox eX, specifically designed to print a coating solution
that meets the necessary safety tests for the insulation of the new generation
of batteries used in EVs and energy storage systems.
We have worked with Shifang, a leader in EV battery production automation,
Omijia Intelligent Technology, and Sokan New Materials Group, to launch their
own inkjet battery coating lines. These OEMs provide lines to the leading
battery manufacturers meaning that our technology is on the cusp of becoming a
critical part of an expanding industry.
Our product offering has been in the market for nine months now and this year
will generate single-digit million revenue from existing orders, with all
three OEM's signalling their intent to ramp up order volumes in the near
future. As such, we are well positioned to signficantly grow printhead sales
as confidence in inkjet coating technology increases.
The market potential: We are the leading provider of this technology with
others unable to handle the viscosity of fluids that are required for this
application. There are an estimated 1,300 EV battery production lines in China
and we expect this number to increase as demand for EV's and battery storage
continues to grow. To scale this opportunity for Xaar, converting just the
existing market could generate over a hundred million pounds of initial
revenue over a number of years and with an estimated printhead replacement
cycle of two to three years, we anticipate healthy repeat revenue once our
technology has been installed.
Automotive Coating opportunity
The problem we solve: Today the only solution to using graphics on a car is
either through extremely expensive hand painting or the use of decals. Decals
can quickly appear dirty around the edges and are prone to jet wash damage
which has historically limited their appeal.
In addition, as a potentially secondary opportunity in the more medium term,
if manufacturers want to use several colours on their vehicles, even something
as apparently simple as a different colour roof, it is an extremely
inefficient process. Here, the current process requires cars to be taken off
the production line then masked and sprayed prior to the application of every
additional colour. This is inefficient in terms of both materials and energy
with c.40% of paint lost when spray painting.
The Xaar solution: With a focus on graphic applications, and the replacement
and expansion of the existing "decal" market, Xaar technology enables high
viscosity ink to be applied on the production line on any angle of surface,
providing a high-quality, high value solution with no risk of damage. As such,
last year Axalta and Dürr announced a partnership to provide a digital
graphic solution utilising Xaar printheads and combining Axalta's coating
technology with Dürr's robotics.
The maturity of the opportunity: Dürr, whose machines currently paint 50% of
cars globally, have demonstrated this technology to potential customers and
are in the process of choosing go-to-market partners. During the second
quarter of 2025, they received their first inbound request to quote from a
luxury car manufacturer, an important milestone indicating demand for our
technology. We currently estimate that the first installations will be in the
second half of 2026. The exact timing of when this opportunity will start to
deliver sizeable revenue remains uncertain due to the unpredictability of when
the car industry decides to adapt this new technology.
The market potential: Our technology could drastically expand capability for
customers or brands to customise vehicles beyond what is available today. As
such, exact demand levels are difficult to predict, however, it is likely to
be considerably greater than existing demand for traditional decal solutions
given its limitations.
Currently only c.1% of the 90 million cars produced globally have decals or
two-tone paint. As the current sole provider of this new technology, we have
the potential to take 100% of the market. Unlike our traditional model of
generating revenue directly from selling printheads, Xaar will receive revenue
based on the number of cars painted. We anticipate the size of this market
will grow as our technology unlocks new uses for decals. Therefore, every 1%
of the global car market, or 900,000 cars annually that are painted using our
technology, would generate significant revenue at attractive margins for Xaar.
Desktop 3D Printing opportunity
The problem we solve: Historically there has been an absence of a low-cost,
high-quality, full colour-enabled product. Consumers had a choice between
cheap single nozzle, monochrome, 3D printers or high-quality, full colour 3D
printers which can cost in excess of £50,000. Accessibility to high quality
3D printers was therefore restricted to real enthusiasts willing to pay for a
premium product.
The Xaar solution: By utilising Xaar technology and jetting high viscosity
fluids, cost as a barrier to high-quality 3D printing, has been substantially
reduced. In November 2024, our technology enabled Flashforge, a major global
supplier of desktop 3D systems, to launch the world's first full colour high
resolution desktop 3D printer with keen pricing aimed at opening up the
consumer market.
Of note, earlier this year, an OEM launched a 2.5D full colour printer at a
similar price point to the Flashforge system. The overwhelmingly positive
reaction to this launch, with sales a multiple of that initially expected, has
served to reinforce belief in the market potential for a high quality full
colour 3D printer. Flashforge have observed how their competitor launched
their product and are currently implementing key lessons with a modified
go-to-market strategy.
The maturity of the opportunity: Flashforge have been marketing their desktop
3D printer for an extended period and we anticipate that they will start to
sell their printers around year-end, with a more direct go-to-market strategy
than initially envisaged given peer success.
The market potential: As the cost of purchasing a high-quality desktop 3D
printer falls over the medium term, we would expect demand to grow beyond the
current levels of one million units sold annually. Conversion of just 1% of
the existing market will generate Xaar multi-million-pounds of revenue with
each machine generating reoccurring revenue as the printheads are designed for
regular replacement.
Summary of the key future revenue drivers
Overall, these three markets each represent significant revenue opportunities,
illustrating the progress we have made to de-risk our business over a
relatively short period of time. In the first half of 2025, progress in all
three markets has remained on schedule and demand for our printheads continues
to grow.
Other Market opportunities
Jewellery wax market: We now supply printheads to four of the five biggest
OEMs in the market and we expect to take a majority share of the market by
year-end. Most recently, in April 2025, Flashforge launched the Waxjet 530, a
three-headed machine to go alongside the Waxjet 510, a single headed machine,
which launched last year, and demand for the Waxjet 530 has been almost double
than anticipated. On top of this, we have started the multi-year process to
develop a printhead that will enable access to an adjacent market which has
more than double the revenue potential than the current opportunity.
Textiles and Corrugates: Our technology enables consistently clean,
high-quality printing on a wide range of garments. Following a successful
launch with M&R utilising our Aquinox printhead in a textile application,
we remain committed to the opportunity to broaden our offering to additional
OEMs. The potential market opportunity is roughly £20 million per annum and
we anticipate taking significant market share in the medium term.
Enhanced go-to-market strategy
The capability of OEMs to integrate our printheads into their existing print
machines varies materially. The challenges of working with high viscosity
fluids can be considerable, with clients, on occasion, withdrawing from the
development process due to the apparent complexity of the process. To get
around this, in some markets we have been changing our go-to-market strategy
to focus on turnkey solutions that offer potential customers the printhead
with the associated ink system. The critical advantage of a turnkey solution
is a significantly reduced timeline from point of engagement to a Xaar
embedded solution being fully operational and available for customers to
purchase.
After the success of the project in collaboration with M&R last year,
which saw their product launched in early September after just six months, our
go-to-market strategy has been validated. However, the near-term focus remains
on executing on the opportunities within EV battery, automotive coating and
desktop 3D, as well as the jewellery wax market in the immediate future.
Operations
The capability to increase operational capacity and output in line with
anticipated increases in demand, without the need for significant capital
investment, ensures we are well set for the growth we see before us. On a
smaller scale, our ability to ramp-up in line with demand was proven as we met
the stronger than anticipated demand for Xaar 2002 printheads post the
successful launch of the Flashforge 530 Waxjet in April 2025; delivering in H1
the number of printheads forecast for FY25 in total on schedule. Further to
this, we have begun to add headcount in key areas in anticipation of growing
demand for our printheads.
Last year we successfully relocated print systems manufacturing from Hemel
Hempstead to Huntingdon as part of our continued effort to facilitate greater
collaboration. This enables us to understand integration issues and provide
functioning solutions to our OEMs faster, making it easier for OEMs to utilise
our technology, ultimately allowing us to sell more printheads.
Megnajet
Megnajet continues to play an important role in helping OEMs utilise our
printheads and we are in the process of further integrating Megnajet with our
Printhead business.
We have built a new ink delivery system production facility in China to expand
our ability to support local OEMs with the products they need. Historically,
we have been unable to sell any ink systems in China as the cost of UK
manufactured ink systems was too high for the domestic market. This facility
helps us to support our customers with the hardware they need at the right
price, therefore removing another hurdle to the adoption of our printheads in
China.
Engineered Print Systems
EPS remains largely separate to the rest of our business with a distinct
strategy and business model, utilising both Xaar and competitor printheads.
Amidst a difficult market backdrop, worsened by the introduction of tariffs,
we have taken steps to strengthen the leadership of this business to focus on
a return to growth. Going forward, our focus will be on strengthening the
customer pipeline while optimising the supply chain to reduce the effects of
higher input costs. The benefits of these actions should be delivered in the
next financial year.
Sustainability
We remain focussed on delivering our roadmap and helping our customers become
more sustainable by using our printheads which need less ink, require less
time to dry and consume less energy. Our research shows that, compared to
analogue alternatives, digital has a significant impact in reducing energy
consumption (by as much as 55%), water consumption (by up to 60%) and CO(2)
emissions (by up to 95%).
After the relaunch of our roadmap in April 2025, we are currently focussing on
developing the necessary action plans that will ensure we meet our targets as
planned. Our 2024 ESG report provides further detail of our programme,
including progress against each of our pillars.
Outlook
Our expectations for 2025 remain unchanged despite the additional uncertainty
brought by the introduction of tariffs and the continuation of challenging
trading conditions reported in March 2025. Our strength is our attractive
value proposition centred around the ability to jet highly viscous liquids.
We continue to anticipate that revenue will be second half weighted with order
volumes expected to grow steadily throughout the year and into FY26. Printhead
revenue is expected to be strong in the second half, whilst in EPS, the tariff
induced end market slowdown is expected to continue to impact revenue and
profit whilst the pipeline is being rebuilt.
Notwithstanding the uncertainties of the global geopolitical environment and
tariffs, our financial performance will be driven by the maturing of recent
product launches and the exact timing of new ones. Management remains
confident of meeting current expectations.
It also remains our strong belief that in the medium term, our focus growth
areas will deliver meaningful revenue at attractive margins.
Business Performance
Revenue
Group revenue growth
£m H1 2025 H1 2024(1) Var Var %
Printhead 19.9 16.5 3.4 20%
EPS 6.3 7.5 (1.2) (16)%
Megnajet 1.1 1.3 (0.2) (19)%
FFEI - 0.2 (0.2) n/a
Total Revenue 27.2 25.5 1.7 7%
(1)Prior year numbers restated to reflect continuing operations post the
disposal of FFEI Life Science business
Revenue for the Group was £27.2 million (H1 2024: £25.5 million) for the
first half of the year, representing year-on-year growth of £1.7 million, up
7%. Growth is reflective of strong Printhead new business revenue growth as
well as relative stability in our Ceramics and Glass product offering, which
has been in decline and acting as a headwind to Group growth for a number of
years. In total, revenue from the Printhead business grew by £3.4 million,
largely due to demand for our jewellery wax printheads which generated £3.3
million of revenue in H1, up from £0.6 million in the first half of 2024.
FFEI revenue in H1 2024 is for the Digital Print part of that business which
is continued within the Printhead business unit in 2025.
EPS revenue fell 16% to £6.3 million amidst tough market conditions driven by
tariff uncertainty in the US market affecting capital investment decisions in
the customer base and the completion of a substantial multi-year project in
FY24.
Megnajet revenue was down year-on-year to £1.1 million (H1 2024: £1.3
million) as the uncertainty caused by tariffs has slowed down capital
investment decisions.
Printhead
Revenue by Sector
£m H1 2025 H1 2024(1) Var Var %
Ceramics & Glass 3.6 3.8 (0.2) (9)%
C&M & DTS 7.1 6.4 0.7 11%
WFG & Labels 1.2 2.4 (1.2) (50)%
3D Printing & AVM 6.7 3.5 3.2 91%
Packaging & Textiles 1.3 0.5 0.8 160%
Total Revenue 19.9 16.5 3.4 20%
(1)Note that 2024 sector revenues have been restated following a review of
allocations for FY24 results
Xaar offers a wide range of industrial inkjet printheads which are designed
and produced to meet customer-driven requirements in markets including EV
battery coating, automotive coating, 3D printing, jewellery wax, textiles,
graphics, packaging, and additive manufacturing.
Printhead revenue increased by 20%, to £19.9 million for H1 2025 (H1 2024:
£16.5 million). The Coding & Marking (C&M) and Direct-to-Shape sector
revenue grew £0.7 million to £7.1 million, primarily due to revenue
generated from the EV battery coating market. 3D Printing and Advanced
Manufacturing grew 91% due to the significant growth in the jewellery wax
market. Packaging and Textiles, was up 160% to £1.3 million in H1, largely
due to the M&R partnership launched in September 2024. The decline in
revenue from Ceramics and Glass has begun to stabilise to £3.6 million
compared to £3.8 million in H1 2024, supported by a new agreement with a key
customer. We anticipate that revenue from this sector is near its trough,
eliminating a persistent headwind for the Group. Revenue excluding Ceramics
and Glass increased by 28%, to £16.3 million (H1 2024: £12.7 million).
Overall, as we grow revenue, we are also growing market share through entry
into new markets. This supports our confidence that as more of our technology
becomes embedded in our target end markets, the Printhead business will
deliver strong and sustainable growth.
Engineered Print Systems
EPS manufactures a range of highly customised product print systems, printing
a variety of industrial and promotional objects such as tools, appliances,
sports equipment, medical equipment and toys. The business is split between
digital inkjet machine sales (H1 2025: 52% of revenue), pad printing sales (H1
2025: 40% of revenue) and servicing (H1 2025: 8% of revenue).
Revenue from EPS fell by £1.2 million to £6.3 million (H1 2024: £7.5
million). This has been driven by a £1.4m fall in sales of digital inkjet to
£3.2 million (H1 2024: £4.6 million), driven in part by the global
uncertainty that US tariffs brought - causing customers to delay capital
investment decisions. Pad printing remains flat at £2.5 million. Servicing
continues to be a positive contributor to growth as customers look to extend
the lifespan of machinery, with revenue up 47% to £0.5 million.
Megnajet
Megnajet specialises in the design and manufacture of industrial fluid
management systems for digital inkjet with the most integrated and compact ink
systems in the market today.
Megnajet delivered £1.1 million of external revenue, a 19% reduction
year-on-year due to the ongoing delay of capital equipment investment caused
by higher uncertainty. Within Megnajet, our main focus is on Group projects,
with a 133% uplift in intra-group transactions with Xaar and EPS remaining two
of Megnajet's biggest customers. Overall, we remain satisfied with the
performance of this business as it contributes to the strategic progress of
the Group.
Gross profit
Gross profit increased by £0.4 million to £9.9 million (H1 2024: £9.5
million) with gross margin remaining stable at 36.5% (H1 2024: 37.4%) on
increased revenue.
Printhead gross margin decreased by 350 basis points year-on-year driven by
sales mix and a strategic decision to secure market share in the ceramics
segment in anticipation of its recovery. Within EPS, gross margin improved by
350 basis points due to cost savings achieved by the new management team
including proactive supply chain management. Megnajet gross margin fell by 480
basis points due to a reduction in externally sold volumes and lower overhead
absorption.
Research & Development
Gross R&D was £2.0m in the first half, and at c7% of revenue was in line
with the prior year. We are continuing to invest in the business for both the
short and long-term benefit. We remain focussed on helping OEM companies
integrate our technology into their machines whilst remaining at the forefront
of innovation.
Operating Expenses
Whilst we have continued to face inflationary headwinds in areas such as raw
material and energy costs, we have been successful in our efforts to manage
operating expenditure across the Group. The sales and marketing expense for
the period was £2.3 million (H1 2024: £2.5 million) reflecting the continued
focus on cost management across both salaries and travel expense. General and
administrative expenses increased to £6.2 million from £5.5 million
(restated) in H1 2024, reflecting small headcount growth, inflationary salary
increases and extra IP and legal costs.
Profit for the year
Adjusted loss before tax was at a similar level to the prior period at £(0.7)
million (H1 2024: £(0.6) million). All business units continue to generate
profit although in the period this was offset by broadly stable head office
costs at £3.1 million (H1 2024 £3.0 million).
In calculating the adjusted profit before tax, we have adjusted for fair value
losses on financial assets of £0.4 million (H1 2024: £0.2 million) alongside
restructuring costs of £0.7 million (H1 2024: £0.2 million), foreign
exchange losses on intra-group loans of £0.6 million (H1 2024: nil),
share-based payments of £0.4 million (H1 2024: £0.7 million), Research and
development expenditure credit £0.2 million (H1 2024: nil), and amortisation
of acquired intangible assets of £0.2 million (H1 2024: £0.3 million). After
taking these into account, the loss before tax was £2.8 million (H1 2024:
£2.0 million)
Adjusted EBITDA in the period was £0.8 million (H1 2024: £0.9 million).
Cashflow and balance sheet
The Group retains a strong balance sheet, with cash and cash equivalents at 30
June 2025 of £5.1 million, reflecting a cash outflow of £3.6 million during
the period.
H1 2025 saw trade working capital fall £1.1 million to £25.4 million (FY
2024: £26.5 million). Trade receivables were flat at £8.1 million and trade
creditors reduced by £0.3 million to £8.5 million (FY 2024: £8.8 million).
Whilst inventory reduced by £1.4 million in the statement of financial
position to £25.9 million (FY 2024: £27.2 million), £0.9 million of this
has no cashflow impact as it was transferred to fixed assets to enhance
demonstration capability.
Trading losses before tax from total operations of £3.3 million resulted in
operating cash outflows of £0.3 million after adjusting for non-cash items.
The cash impact of movements in working capital was an outflow of £0.6
million, predominantly driven by changes to creditor balances including lower
contract liabilities in EPS, and drives a cash utilisation from operations of
£0.9 million.
Other significant financing and investing cashflows include purchases of fixed
assets £1.3 million, purchases of own shares £0.3 million, lease payments
£0.8 million and a repayment of receivables finance borrowings £0.5 million.
As at 30 June 2025 there were no borrowings against receivables (FY 2024:
£0.5 million borrowed) and this movement, alongside the £3.6 million gross
cash reduction, resulted in a reduction in net cash from £8.2 million to
£5.1 million.
The Group has a Revolving Credit Facility (RCF) of £5 million in place with
our lead bank, HSBC, to ensure we have adequate resources to invest in the
Group and our operational capability when required. To date the facility
remains undrawn. At the beginning of the year, the term of the facility was
extended by one year, to June 2026.
The business has a clear plan and strategy, supported by its healthy balance
sheet and cash position. At present, we are focusing on internal investment to
ensure we have the operational capacity and efficiency to meet future demand,
as well as product development to ensure we remain at the forefront of the
high viscosity printhead market. We remain focussed on converting market
opportunities and will continue to review our approach to inventory levels,
with a medium-term aim to reduce it as demand becomes more stable.
Dividend
The Board regularly reviews capital allocation and believes that prioritising
investment to enable profitable growth for the business is currently the most
appropriate use of capital, therefore, no interim dividend has been declared
for H1 2025.
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2025
Six months ended 30 June 2025 (unaudited) Six months ended 30 June 2024 (unaudited) - restated **
Adjusted Adjusting Total Adjusted Adjusting Items* Total
Items*
Notes £'000 £'000 £'000 £'000 £'000 £'000
Revenue 2 27,211 - 27,211 25,533 - 25,533
Cost of sales (17,270) - (17,270) (15,985) - (15,985)
Gross profit 9,941 - 9,941 9,548 - 9,548
Selling, general and administrative expenses (8,481) (2,263) (10,744) (8,014) (1,321) (9,335)
3
Research and development expenses (1,974) 181 (1,793) (2,001) - (2,001)
Operating loss (514) (2,082) (2,596) (467) (1,321) (1,788)
Finance income 39 - 39 42 - 42
Finance costs (227) - (227) (217) - (217)
Loss before tax (702) (2,082) (2,784) (642) (1,321) (1,963)
Tax credit 4 135 16 151 191 - 191
Loss for the period from continuing operations (567) (2,066) (2,633) (451) (1,321) (1,772)
Loss for the period from discontinued operations (178) (300) (478) (48) (797) (845)
Total loss for the period (745) (2,366) (3,111) (499) (2,118) (2,617)
Loss per share
Basic 5 (0.9) (3.9) (0.6) (3.3)
Diluted 5 (0.9) (3.9) (0.6) (3.3)
Loss per share - continuing operations
Basic 5 (0.7) (3.3) (0.6) (2.3)
Diluted 5 (0.7) (3.3) (0.6) (2.3)
*Further information on adjusting items included in Note 3.
** Prior period figures have been restated to separately disclose discontinued
operations. Refer note 12.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2025
Six months ended 30 June 2025 (unaudited) Six months ended 30 June 2024 (unaudited) - restated*
£'000
£'000
Loss for the financial period (3,111) (2,617)
Exchange (losses)/gains on translation of foreign operations (488) 47
Other comprehensive (expense)/income for the period (488) 47
Total comprehensive expense for the period (3,599) (2,570)
Total comprehensive income for the period is attributable to:
Continuing operations (3,121) (1,725)
Discontinued operations (478) (845)
(3,599) (2,570)
* Prior period figures have been restated to separately disclose discontinued
operations. Refer note 12.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2025
As at As at
30 June 2025 31 December 2025
Notes (unaudited) (audited)
Non-current assets
Goodwill 6,477 6,959
Other intangible assets 5,434 5,136
Property, plant and equipment 12,838 12,490
Right-of-use assets 4,363 4,734
Financial asset at fair value through profit or loss 6 2,718 3,063
Deferred tax assets 1,068 951
Non-current financial assets 95 104
32,993 33,437
Current assets
Inventories 25,863 27,236
Trade and other receivables 8,069 8,084
Contract assets 772 1,018
Current tax receivable 504 346
Financial asset at fair value through profit or loss 6 1,695 1,854
Cash and cash equivalents 5,092 8,711
41,995 47,249
Total assets 74,788 80,686
Current liabilities
Trade and other payables (8,495) (8,782)
Provisions (902) (951)
Contract liabilities (1,320) (1,986)
Borrowings 7 - (557)
Lease liabilities (948) (1,218)
(11,666) (18,657)
Net current assets 30,330 33,755
Non-current liabilities
Lease liabilities (4,397) (4,710)
Provisions (300) (300)
Other Payables (2) -
(4,699) (5,010)
Total liabilities (16,364) (18,504)
Net assets 58,624 62,182
Equity
Share capital 8 7,958 7,948
Share premium 30,011 30,011
Own shares 8 (522) (566)
Translation reserve 952 1,440
Other reserves 6,256 6,256
Retained earnings 13,969 17,093
Total equity attributable to the equity shareholders of the parent 62,182
58,624
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2025
Share Share Own Translation Other Retained Total
capital premium shares reserve reserves earnings equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2024 7,923 29,950 (566) 1,318 6,256 26,624 71,505
Loss for the period - - - - - (2,617) (2,617)
Other comprehensive expense - - - 47 - - 47
Total comprehensive expense - - - 47 - (2,617) (2,570)
Issue of ordinary shares 14 57 - - - - 71
Exercise of share options - - - - - (7) (7)
Share-based payments - - - - - 756 756
Balance at 30 June 2024 7,937 30,007 (566) 1,365 6,256 24,756 69,755
Loss for the period - - - - - (8,075) (8,075)
Other comprehensive expense - - - 75 - - 75
Total comprehensive expense - - - 75 - (8,075) (8,000)
Issue of ordinary shares 11 4 - - - - 15
Exercise of share options - - - - - (11) (11)
Share-based payments - - - - - 423 423
Balances at 31 December 2024 7,948 30,011 (566) 1,440 6,256 17,093 62,182
Loss for the period - - - - - (3,111) (3,111)
Other comprehensive income - - - (488) - - (488)
Total comprehensive income/(expense) - - - (488) - (3,111) (3,599)
Issue of ordinary shares 10 - - - - - 10
Exercise of share options - - - - - (352) (352)
Share-based payments - - - - - 339 339
Own shares disposed of on exercise of share options - - 342 - - - 342
Purchase of own shares - - (298) - - - (298)
Balance at 30 June 2025 7,958 30,011 (522) 952 6,256 13,969 58,624
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2025
Six months ended Six months ended
30 June 2025 30 June 2024
(unaudited) (unaudited)
Note £'000 £'000
Cash (utilised)/generated from operations 11 (870) 3,868
Net income taxes paid (71) (139)
Net cash (outflow)/inflow from operating activities (941) 3,729
Investing activities
Interest income received 93 57
Purchases of property, plant and equipment (786) (373)
Purchases of intangible assets (515) (35)
Proceeds from sale of intangible assets - -
Cash earn-out received from financial asset at FVTPL 83 73
Net cash outflow from investing activities (1,125) (278)
Financing activities
Proceeds from sale of own shares (298) -
Proceeds from issue of shares - 64
Lease payments (773) (883)
Interest paid (29) (20)
Net (outflow)/inflow from invoice discounting facility (557) 473
Payment of deferred consideration - (1,400)
Net cash outflow from financing activities (1,657) (1,766)
Net (decrease)/increase in cash and cash equivalents (3,723) 1,685
Cash and cash equivalents at beginning of period 8,711 7,135
Effect of foreign exchange rate changes on cash balances 104 (95)
Cash and cash equivalents at end of period 5,092 8,725
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2025
1. Basis of preparation and accounting policies
General information
Xaar Plc ("the Company" and together with its subsidiaries "the Group") is a
public limited company whose shares are listed on the London Stock Exchange,
is incorporated and domiciled in the United Kingdom and is registered in
England under the Companies Act 2006.
Basis of preparation
The interim condensed consolidated financial statements for the six months
ended 30 June 2025 have been prepared in accordance with IAS 34 "Interim
Financial Reporting" as adopted by the United Kingdom. The interim condensed
consolidated financial statements do not include all the information and
disclosures in the annual financial statements and should be read in
conjunction with the Group's consolidated financial statements for the year
ended 31 December 2024.
The interim condensed consolidated financial statements are unaudited and do
not constitute statutory financial statements as defined in Section 434 of the
Companies Act 2006.
The comparative figures for the financial year ended 31 December 2024 are as
reported in the Group's consolidated statutory financial statements for that
financial year. Those financial statements have been reported on by the
Group's Auditor and delivered to the Registrar of Companies. The Independent
Auditor's Report for the year ended 31 December 2023 was (i) unqualified, (ii)
did not include a reference to any matters to which the Auditor drew attention
by way of emphasis without qualifying their report, and (iii) did not contain
a statement under Sections 498(2) or 498(3) of the Companies Act 2006.
Going concern
The Group has prepared the interim condensed consolidated financial statements
on the basis that it will continue to operate as a going concern. The
Directors consider that there are no material uncertainties that may cast
significant doubt over this assumption. They have formed a judgement that
there is a reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future, and not less
than 12 months from the end of the reporting period.
Principal accounting policies
The accounting policies adopted in the preparation of these interim condensed
consolidated financial statements are consistent with those followed in the
preparation of the Group's annual consolidated financial statements for the
year ended 31 December 2024.
New accounting standards, interpretations and amendments
Several amendments apply for the first time in the six months ended 30 June
2025. As previously reported in the Group's Annual Report and Financial
Statements for the year ended 31 December 2024, these amendments do not have a
material financial or disclosure impact on the Group's interim condensed
consolidated financial statements for the six months ended 30 June 2025.
Key sources of estimation uncertainty and critical accounting judgements
In preparing these interim condensed consolidated financial statements, the
critical accounting judgements and key sources of estimation uncertainty are
consistent with those disclosed in the Group's Annual Report and Financial
Statements for the year ended 31 December 2024.
Principal risks and uncertainties
The Board has overall responsibility for the establishment and oversight of
the Group's risk management framework. The Board has an established,
structured approach to risk management, which includes continuously assessing
and monitoring the key risks and uncertainties of the business. An outline of
the key risks and uncertainties faced by the Group and the potential impact of
these risks on of the Group's strategy and financial performance, together
with details of specific mitigating actions, is detailed on pages 13 to 19 of
the Group's Annual Report and Financial Statements for the year ended 31
December 2024, which is available on the Group's website at www.xaargroup.com.
(http://www.xaargroup.com/)
The Board has reviewed these risks as part of the half year risk assessment
update resulting in several changes which are reflected in the Group's Interim
Report for the six months ended 30 June 2025. Details of all such key changes
are included in the risks and uncertainties section of this report.
2. Operating segments
The Group's operating segments are determined based on the internal reporting
to the Chief Operating Decision Maker (CODM). The CODM has been determined to
be the Chief Executive Officer, with support from the other members of the
Board of Directors, being the individual who is primarily responsible for the
allocation of resources to segments and the assessment of performance of the
segments.
The principal activities of the Group are presented in the following segments:
'Printhead', 'Product Print Systems', 'Digital Imaging' and 'Ink Supply
Systems'. This presentation reflects how the Group's operating performance is
reviewed internally by management.
In 2024 the 'Digital Imaging' business at FFEI was reorganised. The Printbar
part of the business was gradually migrated to Printhead operating segment and
the Life Sciences business was to be gradually wound down. In Q1 2025 the Life
Sciences business ended, resulting in the operating segment 'Digital Imaging'
being discontinued. The 2024 figures have been restated to classify the Life
Sciences business as discontinued operations.
Six months ended 30 June 2025 (unaudited) Printhead Product Print Systems Digital Imaging * Ink Supply Systems Head Office Entities Total
Note £'000 £'000 £'000 £'000 £'000 £'000
Revenue - total from continuing operations 20,381 6,279 - 1,704 - 28,364
Revenue - intra segment (502) - - (651) - (1,153)
Revenue - external from continuing operations 19,879 6,279 - 1,053 - 27,211
Adjusted operating profit/(loss) from continuing operations 2,058 195 - 311 (3,078) (514)
Adjusting items 3 30 (300) - (45) (1,767) (2,082)
Operating profit/(loss) from continuing operations 2,088 (105) - 266 (4,845) (2,596)
Operating loss from discontinued operations - - (524) - - (524)
Total Operating profit/(loss) 2,088 (105) (524) 266 (4,845) (3,120)
Six months ended 30 June 2024 (unaudited) Printhead Product Print Systems Digital Imaging * Ink Supply Systems Head Office Entities Total
Note £'000 £'000 £'000 £'000 £'000 £'000
Revenue - total from continuing operations 17,025 7,512 645 1,580 - 26,762
Revenue - intra segment (501) - (449) (280) - (1,229)
Revenue - external from continuing operations 16,524 7,512 197 1,300 - 25,533
Adjusted operating profit/(loss) from continuing operations 1,600 480 (99) 485 (2,933) (468)
Adjusting items 3 (518) - (121) (62) (620) (1,321)
Operating profit/(loss) from continuing operations 1,082 480 (220) 423 (3,553) (1,788)
Operating loss from discontinued operations - - (822) - - (822)
Total Operating profit/(loss) 1,082 480 (1,042) 423 (3,533) (2,610)
*restated to identify continuing and discontinued operations. Refer note 12.
Additionally, the share-based payment charge and the management recharges
elimination have been allocated and the Head Offices separated from Printhead.
3. Adjusting items
The Directors believe that the 'adjusted profit before tax' and 'adjusted
earnings per share' alternative performance measures presented provide a
consistent presentation of the Group's underlying operational performance.
They also present shareholders with a clearer insight of performance metrics
used by the Chief Operating Decision Maker and mitigate volatility, resulting
from external factors that are not influenced by the Group.
These items are as defined below and have been presented consistently in both
the current and prior interim periods and remain consistent with the audited
information as disclosed in the Annual Report and Financial Statements for the
year ended 31 December 2024.
Six months ended 30 June 2025 (unaudited) Six months ended 30 June 2024 (unaudited) - restated
continuing discontinued Total continuing discontinued Total
£'000 £'000 £'000 £'000 £'000 £'000
Share-based payment charges (i) 359 (3) 356 670 100 770
Exchange gains/(losses) on intra-group transactions (ii) 587 - 587 (43) - (43)
Restructuring and transaction expenses (iii) 726 303 1,029 243 113 356
Research and Development expenditure credit (iv) (181) - (181) - - -
Fair value losses on financial assets at FVTPL (v) 426 - 426 186 - 186
Amortisation of intangible assets arising on business combinations (vi) 165 - 165 265 584 849
Affecting operating profit and profit before tax 2,082 300 2,382 1,321 797 2,118
Tax effect of adjusting items (16) - (16) - - -
Total adjusting items after tax 2,066 300 2,366 1,321 797 2,118
(i) Comprises share-based payment charges of £356,000 (2024:
£756,000) and the corresponding charge of £nil (2024: £14,000) for the
associated employer's social security contributions and are included in the
selling, general and administrative expenses.
(ii) Comprises exchange gains or losses as a result of intra-group
transactions in the United States of America. Such costs are included in
selling, general, and administrative expenses.
(iii) Restructuring costs include redundancy costs of £575,000 (2024:
£343,000), costs from the rationalisation of the Digital Imaging business
£191,000 (2024: nil) and costs resulting from the Group's operational
efficiency programs £263,000 (2024: £13,000). Such costs are included in
selling, general, and administrative expenses.
(iv) Comprises UK corporation tax relief relating to qualifying research
and development expenditure.
(v) Comprises the fair value movement on contingent consideration that
arose on the Group's divestment of Xaar 3D Limited. Such costs are included
in selling, general, and administrative expenses. Refer to Note 6 for
further information.
(vi) The intangible assets consist of the customer relationships and brand
value recognised on acquisition of Megnajet Limited in 2022. 2024 also
includes the software, patents and customer relationships recognised on
acquisition of FFEI Limited in 2021. These costs are included in selling,
general, and administrative expenses.
4. Taxation
The major components of the tax credit recognised in the Condensed
Consolidated Income Statement are as follows.
Six months ended Six months ended
30 June 2025 30 June 2024
(unaudited) (unaudited)
£'000 £'000
Current tax
Current income tax credit - UK 45 -
Current income tax charge - overseas 1 -
Adjustments in respect of prior years 4 (191)
50 (191)
Deferred tax
Origination and reversal of timing differences (201) -
Total tax credit (151) (191)
Unrecognised deferred tax assets
The Group continues to have significant unrecognised deferred tax assets
consistent with the position as at 31 December 2024 (£29,546,000). Full
details of the nature of these balances are disclosed in note 19 of the
Group's Annual Report and Financial Statements for the year ended 31 December
2024.
5. Earnings per share
The calculation of basic and diluted earnings per share is based upon the
following data:
Six months ended 30 June 2025 (unaudited) Six months ended 30 June 2024 (unaudited) - restated **
Adjusted Adjusting Total Adjusted Adjusting Items* Total
Items*
£'000 £'000 £'000 £'000 £'000 £'000
Earnings
Loss attributable to equity shareholders of the parent (745) (2,366) (3,111) (499) (2,118) (2,617)
from continuing (567) (2,066) (2,633) (451) (1,321) (1,772)
from discontinued operations (178) (300) (478) (48) (797) (845)
Number of shares Six months ended 30 June 2025 (unaudited) Six months ended 30 June 2024 (unaudited)
Weighted average number of ordinary shares in issue 79,188,113 78,647,411
Less: ordinary shares held by the Xaar Technology Employee Benefit Trust and (322,730) (335,556)
the Xaar Plc ESOP Trust
Weighted average number of ordinary shares for the purposes of basic EPS 78,865,383 78,311,855
Effect of potential dilutive ordinary shares - share options and awards* ― ―
Weighted average number of ordinary shares for the purposes of diluted EPS 78,865,383 78,311,855
*Due to the Group recording a loss in the current and prior period,
potentially dilutive shares are not considered within the calculation
Loss per share - Total Pence per share Pence per share
Basic EPS (3.9) (3.3)
Diluted EPS (3.9) (3.3)
Adjusted basic EPS (0.9) (0.6)
Adjusted diluted EPS (0.9) (0.6)
Loss per share - Continuing operations Pence per share Pence per share
Basic EPS (3.3) (2.3)
Diluted EPS (3.3) (2.3)
Adjusted basic EPS (0.7) (0.6)
Adjusted diluted EPS (0.7) (0.6)
** Prior period figures have been restate to separately disclose discontinued
operations. Refer note 12.
6. Financial instruments
The Group's activities expose it to a variety of financial risks that include
currency risk, interest rate risk, credit risk and liquidity risk.
The interim condensed consolidated financial statements do not include all
financial risk management information and disclosures required in the annual
financial statements: accordingly, the following disclosures should be read in
conjunction with the Group's financial statements for the year ended 31
December 2024.
The Directors consider there to be no material difference between the carrying
value and the fair value of financial instruments classified as held at
amortised cost. For the items classified as held at fair value, the fair value
of such instruments is recognised in the Condensed Consolidated Statement of
Financial Position as the carrying amount.
Financial instruments held at fair value
The Group has one financial instrument held at fair value, the contingent
consideration that arose on the Group's divestment of its remaining interest
in Xaar 3D Limited during the year ended 31 December 2021. The Group received
net cash consideration of £9,272,000 as well as a potential entitlement to
additional cash consideration of up to £10,863,000 calculated on an earn-out
basis at 3% of revenue per annum, with additional amounts becoming receivable
on meeting revenue milestones.
Financial instruments that are measured at fair value are classified using a
fair value hierarchy that reflects the source of inputs used in deriving the
fair value. The three classification levels are:
+ Level 1: quoted prices (unadjusted) in active markets for identical assets
or liabilities;
+ Level 2: inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices); and
+ Level 3: from valuation techniques that includes inputs for the asset or
liability that are not based on observable market data (i.e. unobservable
market inputs.
The financial asset at FVTPL is deemed to be a Level 3 instrument. As at 30
June 2025, fair value has been estimated by assuming a straight line reduction
in fair value per percentage change in forecast revenue. Fair value
movements are recognised in the Condensed Consolidated Income Statement in
selling, general and administrative expenses.
The movement in the carrying value of the financial asset is as follows:
30 June 2025 31 December 2024
(unaudited) (audited)
£'000 £'000
Balance at beginning of period/year 4,918 10,599
Earn out received (83) (73)
Milestone consideration received ― -
Fair value loss on financial assets at FVTPL* (422) (186)
Balance at end of period/year 4,413 10,340
* Includes foreign exchange rate movements
7. Borrowings
30 June 2025 31 December 2024
(unaudited) (audited)
£'000 £'000
Amounts falling due within one year
Invoice discounting facility ― (1,915)
Invoice discounting facility
The facility limit is £3 million (2023: £3 million) and operates on a
rolling basis from the original inception date of September 2022. The facility
can be cancelled with a three-month notice period. There are no covenants
attached to the invoice discounting facility.
Interest on the invoice discounting facility is charged daily when the
facility is in an overdrawn position at a rate equivalent to the appropriate
base rate +1.75% pa. There is an annual service fee of £25,000 charged
monthly, and there was a one-off arrangement fee to open the facility of
£10,000. No interest is payable on the unutilised element on the facility.
Further details relating to this facility can be found within Note 26 of the
Group's consolidated financial statements for the year ended 31 December 2024.
Committed facilities
In June 2023, the Group entered into a Revolving Credit Facility (RCF)
agreement of £5 million, which matures in June 2026 . The agreement
includes an accordion option of a further £2.5 million which can be requested
at any time during the facility term, subject to lender approval and relevant
fees. The facility as at 30 June 2025 remained undrawn. (2024: undrawn)
The facility bears a floating interest rate of the Sterling Overnight Indexed
Average (SONIA) rate plus 2.35% margin. A non-utilisation fee of 40% of the
margin is chargeable on undrawn and uncancelled amounts.
The facility is secured by fixed and floating charges over the assets of the
Group. The Group is subject to financial covenants under the facility and has
complied with these at all testing points.
8. Share capital
The Company has one class of ordinary shares which carries no right to fixed
income.
During the six months ended 30 June 2025, a total of 103,929 new ordinary
shares of 10 pence each were issued to satisfy exercises under the Company's
LTIP schemes with a £nil exercise price. During the six months ended 30 June
2024, a total of 137,631 new ordinary shares of 10 pence each were issued to
satisfy exercises under the Company's LTIP and Save as you earn schemes for
£64,000.
During the six months ended 30 June 2025, 143,127 shares with a value of
£341,000 (H1 2024: nil) were used by the ESOP to satisfy share award
exercises with 276,146 shares purchased by the ESOP for £298,000 (H1 2024:
nil).
On 9 April 2025 the Xaar Employee Share Ownership Plan Trust, resolved to
purchase £100,000 of ordinary shares in that capital of the company each
month commencing 14 April 2025, until further notice.
9. Share-based payments
Long-term incentive plans
During the six months ended 30 June 2025, new options over 1,777,422 shares
were granted (2024: 1,462,281) and 229,518 vested options (2024: 71,560) were
exercised.
Weighted average fair value of options granted as at 30 June 2025 was 86p
(2024: 88p).
Fair value of awards with non-market performance conditions (adjusted profit
before tax and revenue) are calculated using the Black Scholes model. Fair
values of awards with market-based performance conditions (total shareholder
return) are calculated using the Monte Carlo model. The inputs into the
models fair value granted in the current and prior periods were as follows:
Six months ended 30 Six months ended 30
June 2025 June 2024
Date of grant 6 May 2025 29 April 2024
Share price at grant 105p 115p
Exercise price nil nil
Expected volatility 57.9% 51.5%
Risk-free rate 3.7% 4.2%
Contractual life 3 years 3 years
All LTIP awards are subject to achievement of the performance conditions and
can be exercised up to ten years after the grant date. Save as permitted in
the LTIP rules, awards lapse on an employee leaving the Group.
103,929 of the options exercised were satisfied using shares held by the Xaar
Plc ESOP Trust, with the remaining 125,589 being satisfied by the issue of new
shares. Options exercised in the period were satisfied in full by the issue of
new shares.
Long-term incentive plans (Cash settled)
During the six months ended 30 June 2025, new options over 70,000 shares were
granted (2024: nil). These LTIP awards mirror the criteria of our equity
settled LTIPS but are specifically to be settled in cash on vesting date.
Deferred bonus plans
No new options were granted in the period (2024: none) and 17,538 vested
options were exercised (2024: none). All of the options exercised were
satisfied using shares held by the Xaar Plc ESOP Trust.
Save as you earn schemes
No new options were granted in the period (2024: none). No vested options were
exercised during the period (2024: 62,524).
10. Dividends
No interim dividend was proposed or paid during either the current or
preceding period. The Board of Directors are mindful of the importance of
dividends to its shareholders and intends to resume the payment of dividends
as soon as conditions allow.
11. Notes to the cash flow statement
Six months ended Six months ended
30 June 2025 30 June 2024
(unaudited) (unaudited)
£'000 £'000
Loss before tax from continuing operations (2,784) (1,963)
Loss before tax from discontinued operations (478) (845)
Loss before tax (3,262) (2,808)
Adjustments for: 1,213
Depreciation of property, plant and equipment 1,404
Depreciation of right-of-use assets 378 550
Amortisation of intangible assets 216 911
Net interest expense 142 197
Unrealised currency translation losses 380 46
Share-based payments charge 355 770
Fair value losses on financial assets at FVTPL 421 186
Loss on disposal of property, plant and equipment 8 -
Net gain on disposal of leases - (5)
Research and development expenditure credit accrual (181) -
Increase/(decrease) in provisions 7 (315)
Operating cash flows before movements in working capital (323) 936
Decrease/(increase) in inventories 157 (207)
Decrease in receivables 96 1,316
(Decrease)/increase in payables (800) 1,823
Cash (utilised)/generated from operations (870) 3,868
Analysis of changes in net debt
Cash and Lease liabilities Deferred consideration
cash Borrowings Net debt
equivalents
£'000 £'000 £'000 £'000 £'000
Net debt as at 1 January 2024 7,135 (8,698) (1,403) (2,115) (5,081)
Additions to leases - (75) - - (75)
Cash flows 1,685 883 (473) 1,400 3,495
Foreign exchange and other non-cash movements (95) (136) (39) (23) (293)
Net debt as at 30 June 2024 8,725 (8,026) (1,915) (738) (1,954)
Additions to leases - (415) - - (415)
Disposals - 2,289 - - 2,289
Cash flows (146) 314 1,414 733 2,315
Finance charges - (121) - - (121)
Foreign exchange and other non-cash movements 132 31 (56) 5 112
Net debt as at 31 December 2024 8,711 (5,928) (557) - 2,226
Additions to leases - (15) - - (15)
Disposals - 4 - - 4
Cash flows (3,723) 774 557 - (2,392)
Finance Charges - (164) - - (164)
Foreign exchange gain/(loss) 104 (16) - - 88
Net debt as at 30 June 2025 5,092 (5,345) - - (253)
12. Discontinued operations
In 2024 the 'Digital Imaging' business at FFEI Limited was reorganised. The
Printbar part of the business was gradually migrated to Xaar Jet Limited and
the Life Sciences business was gradually wound down. In Q1 2025 the Life
Sciences business ended, resulting in 'Digital Imaging' being discontinued.
The 2024 figures have been restated to classify the Life Sciences business as
discontinued operations.
Financial information relating to the 'Digital Imaging' business at FFEI
Limited is set out below:
Six months ended 30 June 2025 (unaudited) Six months ended 30 June 2024 (unaudited)
Continuing Discontinued Total Continuing Discontinued Total
£'000 £'000 £'000 £'000 £'000 £'000
Revenue - 149 149 197 3,107 3,304
Cost of sales - (87) (87) (230) (2,595) (2,825)
Gross profit - 62 62 (33) 513 480
Selling, general and administrative expenses - (267) (267) (37) (176) (213)
Research and development expenses - (18) (18) (29) (362) (391)
Adjusting items - (300) (300) (121) (797) (918)
Operating loss - (523) (523) (220) (822) (1,042)
Finance income - 54 54 3 15 18
Finance costs - (9) (9) (8) (38) (46)
Loss before tax - (478) (478) (224) (845) (1,069)
Tax - - - - - -
Total loss for the period - (478) (478) (224) (845) (1,069)
The net cashflows of the 'Digital Imaging' business at FFEI Limited is set out below:
Six months ended Six months ended
30 June 2025 (unaudited) 30 June 2024 (unaudited)
Net cash (outflow) / inflow from operating activities (1,552) 2,890
Net cash arising from investing activities 54 18
Net cash used in financing activities (177) (267)
Net decrease in cash generated by the discontinued operations (1,674) (2,642)
Loss per share - Total Pence per share Pence per share
Basic EPS (0.6) (1.1)
Diluted EPS (0.6) (1.1)
Adjusted basic EPS (0.2) (0.1)
Adjusted diluted EPS (0.2) (0.1)
13. Date of approval of interim financial statements
The interim financial statements cover the period 1 January 2025 to 30 June
2025 and were approved by the Board on 12 August 2025.
Further copies of the interim financial statements are available from the
Company's registered office, 3950 Cambridge Research Park, Waterbeach, CB25
9PE, and can be accessed on the Xaar plc website, www.xaargroup.com
(http://www.xaargroup.com) .
Risks and uncertainties
Several potential risks and uncertainties exist which could have a material
impact on the Group's performance over the second half of the financial year
and could cause actual results to differ materially from expected and
historical results.
The Group has continued identifying, evaluating, and managing the key risks
which could impact the Group's performance over the six months to 30 June
2025.
The full list of principal risks identified at the year-end and a description
of how they relate to the Group's strategy and the approach to managing them
are set out on pages 13 to 19 of the Xaar plc Annual Report and Financial
Statements 2024, which is available on the Group's website at www.xaar.com.
(http://www.xaar.com.) Management and the Board have reviewed these risks and
concluded they will continue to remain relevant for the second half of the
financial year. The principal risks as at 30 June 2025, showing any changes
from the 2024 year-end disclosure, are summarised in the table below:
Risk Area: Market
Description Likelihood/Magnitude Changes since 31 December 2024
1. Competition Unlikely/Very High No change.
Monitoring and adjusting
to competitive dynamics
such as pricing/promotion,
innovation, resource
investments and market
share changes
2. Failure to identify market requirements Possible/Very high No change.
Successfully developing
products with the
characteristics that meet
market requirements within the necessary timescale.
3. Commercialising and Possible/Very High No change.
maintaining products with
cutting edge technology
Creating value by generating
innovative products that
deliver significant customer
benefit.
4. Merger and acquisition opportunities Possible/Medium No change.
Our strategy is predicated primarily on organic growth. Seek opportunities to
expand, create synergies
and generate greater
shareholder value.
Risk Area: Operational
5. Climate change Possible/Medium No change
Identifying risks and
scenario planning of physical
and transition impact upon
operations and developing
mitigating actions.
6. Organisational capability Possible/High No change.
Having the right people in
the right roles.
7. Partnerships and alliances Possible/Low No change.
Working with the right
companies, at the right time on the right terms to deliver long-term value.
8. Supply chain Possible/Medium Increased
Optimising sourcing and
supply chain relationships Impact of US tariffs on the supply chain.
to drive performance and
minimise operational issues.
9. War and Conflicts Probable/High Increased
The war in Ukraine continues to impact the near-term outlook for
the UK and global economies and increased uncertainty over the path The recent conflict between Iran and Israel has further destabilised the
Middle East.
ahead. Although energy prices have stabilised, they continue to be a concern
for the UK economy which also result in further upward pressure on inflation
and a potential hit to GDP growth. The conflict
between Israel and Hamas has further destabilised the Middle East.
10. Laws and regulations Compliance with key laws and regulations in all Possible/Medium No change.
countries Group operates in.
Risk Area: IT
11. IT systems and Possible/High No change.
control environment
Strengthen IT infrastructure
and key IT systems. Enhance and build
resilience by investing in
and implementing new IT
infrastructure or IT systems.
12. Cyber security risk Probable/High The incidents of cyber-attacks have increased to other major corporates and
organisations over the last six months.
Loss of systems or
confidential data due to
a malicious cyber-attack,
leading to disruption to
business operations and
loss of data.
Risk Area: Financial
13.Ability to access Unlikely/High No change.
sufficient capital
Ability to access sufficient
capital to fund growth opportunities.
14. Customer credit exposure Possible/Low No change.
Offering credit terms
ensuring recoverability is
reasonably assured.
15. Inventory obsolescence Probable/High No change.
Holding excess inventory
levels when compared
to demand, that leads
to increased risk of
obsolescence and write-off before consumption.
16. Exchange rates Probable/Medium No change
Monitoring global economic
events and mitigating any
resulting significant exchange
rate impacts
1 (#_ftnref1) Centipoise (cP) is a unit of dynamic viscosity used to measure
the thickness of a liquid. It is defined as one hundredth of a poise (P). The
value indicates how easily the liquid will flow - higher centipoise values
correspond to more viscous (thicker) liquids that flow more slowly, while
lower centipoise values correspond to less viscous (thinner) liquids that flow
more easily. Water has a cP of 1-5, whilst honey has a cP of 2-3,000.
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