In its preliminary 2013 results, due out on 18 March, the manufacturer expects to post a 55% increase in sales for the year, compared to 2012, with adjusted revenues up from £86.3m to £134m.

“We had very strong growth expectations for this year and we have pretty much hit the nail bang on the head. There aren’t many that can show a 55% revenue increase at the moment,” said chief executive Ian Dinwoodie

“The two primary drivers for this impressive growth are continuation of the digitisation ceramic tile printing, predominantly in China – that’s the main element - but there has been a real pick-up in the packaging sector predominantly in the label space,” he added.

The graphics arts sector also showed modest growth, he said.

Operating margin for the company is anticipated to be in the region of 30-31% for the year (2012: 21%), which was attributed to operating efficiencies carried out throughout the year, and despite a £20m investment in R&D on both existing and new technologies.

The company balance sheet showed net cash of £53.5m at 31 December (2012: £28.9m), which Dinwoodie said would bolster its work on Xaar’s new P4, thin-film piezo technology.

He added: “2014 will see the back-end of last year’s investment in terms of more capacity, so there will be another £20m invested this year in assets for the production of our existing products and past that the big investment decision will be around the P4 technology, which we’ll bring to market in 2016.

“We will identify exactly what the start-up costs of that will be during this year as well as the implementation plans. We have said we will let the cash grow on our balance sheet until that decision and that remains the situation."

He added that the new P4 technology was currently exiting the research phase with first product design now underway.

Xaar’s share price was down 5.8% to 1.01p in morning trading, compared to a 52-week high of 1,19p and low of 273p.