In the report for the six months ended 30 June 2024, the Cambridge-headquartered inkjet developer’s revenue dropped by 17% to £28.6m – from £34.5m at the same stage a year ago.
Ceramics and glass was the only area of Xaar’s printhead business to see a year-on-year decline, but its 43% drop in revenue from £8m at the same stage a year ago to £4.6m caused total printhead revenue to drop by 6% to £16.5m in the first half.
Excluding ceramics, Xaar said the printhead business delivered new market revenue growth of 26%.
Revenue from object printing wing EPS was down by 30% year-on-year from £10.7m at the same stage a year ago to £7.5m. FFEI revenue fell by 31% from £4.8m to £3.3m and Megnajet revenue declined by 7% from £1.4m to £1.3m.
Xaar said the EPS revenue decline has been driven by a decrease in digital inkjet machine sales of 37% impacted by two multi-pass machines not shipping in June. The pad printing revenue stream has also fallen, which Xaar expects to recover during H2 2024.
The company reported a gross margin of 35% (H1 2023: 40%) due to increased energy costs and reduced overhead absorption.
Its adjusted loss before tax for the period was £0.7m, compared to a H1 2023 adjusted profit before tax of £1.8m.
The company said its R&D investment of £2.4m reflected investment in product development. It said it also remained well capitalised, with net cash of £6.8m, up 10%, driven by disciplined cash management.
The H1 period saw the successful commercialisation of new products, with OEM launches in textiles, corrugated, battery coating, and wax markets.
Xaar’s operational efficiency programme has continued, resulting in a £3.4m (24%) reduction in operating expenses while retaining key capabilities.
The company said it also had a strong pipeline of opportunities, with a number of key projects expected to deliver in 2025.
Xaar CEO John Mills said: “We remain confident in our strategy which is increasingly demonstrating the unique capabilities of our printhead technology. Our pipeline of opportunities has increased in quality in both existing and new application areas and increasing numbers of OEM’s are engaged in, or actively planning, new product launches incorporating Xaar printheads.
“Newly developed high viscosity inks enable us to fully utilise the unique technology of our printheads, and whilst the legacy ceramics market is challenging, masking our success in new market sectors, we have enhanced our customer integration capabilities and are already seeing the benefit in accelerated OEM project launches in other target markets.
“We continue to focus on the elements of the business that are within our control, enhancing our technology, supporting customer adoption of our printheads, managing our cost base and strengthening our cash position demonstrating the benefits that Xaar’s unique capabilities can deliver to customers.
“We remain convinced of our ability to maximise the substantial opportunity we have.”
Looking ahead, Xaar said trading conditions are consistent with those reported in its full-year results; and that the business expects to see more OEM product launches during the second half of the year.
Market uncertainty persists although the company’s expectations for the full-year remain unchanged.
Xaar’s share price slipped in early trading but then recovered. It was down by 0.20% on yesterday’s close at the time of writing just before lunchtime today (18 September) at 99.80p (52-week high: 184.50p, low: 90.24p).
