In its interim results announced today (20 September) for the six months to 30 June Xaar posted sales up nearly 40% at £36.6m, while gross margins improved from 31% to 40%.
Printhead sales rose by 7% in EMEA and 26% in North America, but its Chinese business was hit by ongoing lockdown restrictions and sales there were down 22%.
Adjusted EBITDA jumped from £337,000 to £3m and was positive across all of the firm’s operations, while pre-tax losses were reduced from £1.4m in the same period last year, to £301,000.
The business was back in the black, after tax.
“We are really pleased, they are really good results given the backdrop of uncertainty and economic and environmental issues,” said CFO Ian Tichias.
The firm plans to launch its new acqueous printhead in November, and has high hopes for the product.
CEO John Mills said that Xaar aimed to bring some distinct benefits to market with the new head.
“There’s a lot of interest in it, and the feedback we get from OEMs at that currently there is lifetime and reliability issues with aqueous heads,” Mills said.
“The testing that we’ve done means we’re very confident about the reliability and lifetime of our head, as well as the fundamental benefits with our through flow internal architecture. We believe we’re going to be able to make a step change in reliability.”
Mills said that Xaar’s capabilities around high viscosity fluids would also open up new opportunities.
“Pigmented inks have not really taken off in the textiles industry, because I don’t think there’s been a printhead able to print pigmented inks effectively. Fundamentally, Xaar is very good a printing pigmented inks – why does an aqueous ink need to be low viscosity, why does there need to be so much water in it, why can’t it have more solids so it dries quicker? There’s lots of conversations we’re having with people about the aqueous launch, and we think it’s going to be a bit of a transformation.”
Xaar has also stepped up its sustainability and net zero activities and has launched a new Sustainability Roadmap to 2030.
The firm has revamped and consolidated its clean room operations from four to two, in a move that will halve the amount of electricity it uses next year.
“Clean rooms consume a huge amount of power,” Mills explained.
“We already had a plan to reduce the number of clean rooms to drive a reduction in carbon footprint, and we brought forward the timing because electricity prices have gone through the roof.
“What we’ve done is really looked at whether a process needs to happen in a clean room, because you can get clean hoods in a high quality space. And we’ve done a lot of work with Siemens on efficiency.”
Xaar fixed its electricity prices just over a year ago with a deal that runs to the end of September 2023.
Tichias said its electricity costs had increased by 16% year-on-year.
The Waterbeach-headquartered group increased its R&D spend to £3.3m.
FFEI, acquired in July 2021, had sales of £6.1m, while recent buy Megnajet achieved sales of £600,000 which was ahead of Xaar’s initial expectations.
Xaar's share price had been on the up over the past week, and slipped by 7.5% after the results announcement to 203.5p (52-week high: 275p, low: 141p).
