Inkjet printing technology company Xaar (XAR ) said in a trading update this morning that revenues for the 6 months ended 30 June 2022 (H1 2022) had risen to £37m, a 41% increase YoY and 12% from H2 2021. The company expects adjusted profit for the year to be in line with expectations in light of "strong revenue, improved gross margins, and successful cost management actions".
Xaar Versatex, the company's new printbar product developed by FFEI, was successfully launched in the first half. Xaar also acquired Magnajet, an industrial inkjet manufacturer, during the referenced period, improving vertical integration.
Xaar's Product Print Systems (EPS) business delivered a "strong, improved performance with revenue and margin growth". Its Printhead division also showed solid growth in Europe and the US, offsetting a Covid-related slowdown in China. A new aqueous printhead is scheduled to launch in Q4 2022.
John Mills, Chief Executive Officer, commented: "We are really pleased to have achieved a strong performance in the first half of the year in line with our expectations. We are on target, seeing positive momentum continuing to improve performance across the Group."
Markets reacted well to today's trading update, with XAR shares up 4.28% in early trading, extending the gain to 189% over the past 2 years. The shares are flat in the year to date, defying the broader downturn in technology stocks.
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Cost inflation was the biggest obstacle for the company in H1. Xaar alleviated those effects by further investment in inventory, passing through some of the increases to customers, and implementing management initiatives aimed at reducing energy costs and increasing operational efficiency.
Xaar remains well-funded with a strong cash position of £12.6m on 30 June 2022. The acquisition of Magnajet and significant capital investment have made the company resilient to supply chain disruptions.
The industrial digital inkjet market is estimated by management to be cworth around $1 billion/year. Xaar's ambitious product roadmap aims to address the vast majority of this market within several years. So far, management has executed on its strategy, and recent developments point to further upside in the future.
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