"The digital press market hasn't developed ? the market just isn't there at the moment," said Xaar chief executive Jan Fineman.
"We're focusing R&D on the short and medium term."
He claimed the project hadn't been a complete waste though, and technology developed for the PWA is being incorporated into other products.
Due to a lack of new licensing contracts Xaar has decided to concentrate on manufacturing and improving the profitability of its XaarJet products.
Previously, licensing revenues had been described as the firm's cash cow (PrintWeek, 18 February 2000).
It is planning to double manufacturing capacity for its XJ500 product line. In April, it completed the transfer of production from Cambridge to Sweden. The benefits of this move, which should include improved margins, will show in the second-half and full-year results.
Profits fell 80% to £400,000 on turnover up 14% to £14m.
The fall in profits was due to the decline in technology income, which was down 70% to £1m because Xaar didn't sign any new licensing deals.
Print head and ink sales rose by 44% to £13m. Shares fell 23% to 36p on the news. They had already been trading significantly down from a 52-week high of £1.03 last November.
Story by Barney Cox
