The Cambridge-based company had year-end net cash and liquid resources of more than 8m, up 35% on June 2003, but down 19% compared to December 2002.

In June last year Xaar recorded a pre-tax loss of 2.1m on a turnover of 13.6m for the first six months of the year.

Xaar also announced that it has signed a five-year research, development and manufacturing memorandum of understanding with an unnamed major partner.

The agreement covers Xaars second-generation printhead OmniDot, which both parties will be able to sell to their respective markets. Manufacture of the OmniDot will begin in the second half of this year with volume production expected in 2005.

Printheads developed under the agreement will be manufactured by Xaar at its plant in Jarfalla, Sweden.

by John Davies