But the company’s figures were let down by a 20% drop in sales to Europe compared to the same period last year.

After a struggle in China in the second half of 2006, Xaar recorded a 17% revenue increase in Asia – driven by strong growth in China and India. Growth in the Americas was 45%, although only 11% of the total group sales came from this area.

Overall, Cambridge-based Xaar’s turnover grew to £23.4m, and profit before tax was recorded as £3.1m.

Chief executive Ian Dinwoodie said: “China is back and growing again. The Americas is a good headline, and that is an area we would like to see grow further.

“The results are more modest than we would have liked and Europe is a key factor in that. But the results for the first half of 2006 were very strong and that makes it look worse than it is. We actually saw a 4% growth in Europe in the second half of 2006.”

Dinwoodie added: “Pro­fitability was where we thought it would be, but we are still a little disappointed. But we have spent on new products and the new Huntingdon facility, so we would expect things to start moving up from now on.”

There were also boardroom changes as Steve Temple, one of the founders of Xaar, stepped down, although he will remain as a consultant. Ramon Borrell has been appointed as research and development director.