Half Year Trading Update

Xaar PLC
11 July 2006


FOR IMMEDIATE RELEASE                                            11 July 2006

                                    Xaar plc

                            HALF YEAR TRADING UPDATE


Xaar plc ('Xaar'), the inkjet printing technology group headquartered in
Cambridge, presents an update on performance for the six months ended 30 June
2006.

Trading

Revenue for the six months to 30 June 2006 was 12% ahead of the same period last
year at approximately £22.3m (2005: £19.8m).

Sales to Europe and the US grew in line with expectations; however, due to
de-stocking by customers, the growth in sales to Asia in the second quarter was
slower than had been expected and planned for.

Profit before tax for the period was approximately £4.7m (30 June 2005: £4.9m on
a comparable basis) which reflects lower than expected overhead recovery. While
growth in profits is expected in the second half of the year, profit before tax
for the full year is now likely to be below current year expectations and
similar to the level reported in 2005.

The board remains confident about its prospects for 2007 and a further update
will be given at the time of release of the group's interim results in
September.

Cash

Cash generation during the first half was strong with cash at the end of June of
approximately £16.3m (30 June 2005: £17.5m, 31 December 2005: £14.5m). This
reflects the resolution of certain customer payment issues referred to at the
end of last year, payment of the final dividend for 2005 of £0.9m and capital
expenditure on tangible and intangible assets of £4.1m.



Announcement of interim results

The detailed interim results will be announced in accordance with Xaar's normal
timetable on 13 September 2006.


Contacts

Xaar plc:                                                        01223-423663
Ian Dinwoodie, Chief Executive                                 www.xaar.co.uk
Nigel Berry, Group Finance Director & Deputy
Chief Executive

Bankside Consultants:
Steve Liebmann                                   020-7367-8883 / 07802-888159






                      This information is provided by RNS
            The company news service from the London Stock Exchange