Interim Results

Xaar PLC 18 July 2001 FOR IMMEDIATE RELEASE 18 July 2001 Xaar plc INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2001 - RECORD TURNOVER AND PROFIT Xaar plc ('Xaar'), the ink jet printing technology group headquartered in Cambridge, announces its unaudited results for the six months ended 30 June 2001. Key points : - Record results and progress in technology development are keeping Xaar on course towards its goal of becoming a leading player in the global digital printing and imaging industry. - Turnover increased 14% to £12.3m (2000 : £10.8m). - Profit before tax nearly tripled to £2.0m (2000 : £0.7m) and basic earnings per share improved sharply to 2.7p (2000 : 0.6p). - Strong cash flow resulted in an increase in net cash to £8.8m (£ 8.0m at 31 December 2000). - Results reflect growing importance to Xaar of the manufacture and sale of printheads and inks, with increased revenue of £9.0m (2000 : £7.0m). - Technology licensing, development fees and royalty income contributed £3.3m (2000 : £3.8m). - Licence upgrades were signed during the period with Seiko Instruments and Toshiba TEC. - SunJet, a division of Sun Chemicals, has been signed up as an ink development partner. - Hong Kong office opened to support XaarJet business in Asia. - Development of page wide array technology continues with the demonstration of colour printing. Low volume in-house production is planned to start in early 2002. On outlook, Chairman, Arie Rosenfeld stated : 'Although world economic conditions have created a difficult trading environment for many businesses, especially in the US and Japan, our growth was not impacted by these adverse conditions during the first half of 2001. In this environment there are no certainties and demand is difficult to predict beyond the immediate future. However, XaarJet has a solid order book for Q3 and we continue to have licence discussions with potential licensees, although fees from this business remain unpredictable by their nature. We approach the next six months with a strong determination to achieve our goals for continued growth of the business.' Jan Fineman, Chief Executive or Gordon MacLeod, Finance 020-7466-5000 Director at Xaar on : today 01223-423663 thereafter Steve Liebmann or Lisa Baderoon at Buchanan Communications on: 020-7466-5000 CHAIRMAN'S STATEMENT Introduction I am delighted to report the achievement of record turnover and profits for the first six months of 2001. The expansion of our patent portfolio has been endorsed by the signing of two licence upgrades, the strong growth in demand for our industrial printheads continues across a broad spectrum of markets and the page wide array development ('PWA') demonstrated colour printing for the first time. Combined, these achievements contribute towards Xaar's long-term goal of becoming a leading player in the global printing and imaging industry. Results and finance Group turnover for the period grew to £12.3m (2000: £10.8m) and profit before tax increased to £2.0m (2000: £0.7m). Our revenue profile reflects the changing balance of the business. XaarJet's manufacture and sale of printheads and inks increased revenue to £9.0m (2000: £7.0m), whilst technology revenues (licence and development fees and royalties) continued to make a substantial contribution of £3.3m (2000: £3.8m). Group cash remains strong at £8.8m compared with £8.0m at 31 December 2000, after research and development expenditure of £2.0m and capital expenditure of £0.9m. Business review We continue to develop our core intellectual property by growing the patent portfolio. This provides us with the platform from which to exploit commercially the technology in the office, industrial and commercial printing markets. Licensing, development fees and royalties - The first six months saw licence upgrades from Seiko Instruments Inc. and Toshiba TEC - both licensees now have full access to the patent portfolio, which includes our recent advances generated as part of the PWA programme. Licence upgrades represent an important endorsement of the strength and quality of our intellectual property. We continue to believe that royalty income, although still modest at £0.8m in the period (2000: £0.3m), remains set to accelerate in the medium term. Further new products have been seen from our licensees, including launches by Konica and Brother. XaarJet - Our base of over 100 customers print on a wide variety of surfaces including vinyl, ceramic tiles, packaging, printed circuit boards, banners, credit cards and forms. Development and low volume printhead production takes place mainly in Cambridge and higher volume product lines are manufactured at our Swedish facility, including parallel production of the 500-channel printhead. XaarJet is developing an increasing level of cumulative recurring revenues from existing customers from two sources. Printheads used in industrial and commercial applications are replaced periodically as part of regular maintenance. In addition ink revenues, which increased by 35% in the period, are directly related to our customers' own installed base of printing machines. We are continuing to strengthen the ink product portfolio by our strategy of partnering with world leading ink companies and were pleased to announce SunJet, a division of Sun Chemicals, as a new development partner in April. During the last year we have signed over 15 significant new customers in Asia. Many of these customers, particularly in China, now plan to launch products during the second half of 2001. In response to this demand, and to create even further opportunities, we opened a Hong Kong sales representative office in June. This office, with an initial staff of five, will form a full time sales and technical support team dedicated to the Asian market. PWA - Development of the PWA has continued to progress in the first half. We demonstrated colour printing at the end of Q1 for the first time. In addition, the final stage payment for our initial development phase was agreed at the end of the period. Our technical focus over the next six months will be to adapt the existing design so that low volume production can start in early 2002. Commercially we will target additional partners by the sale of PWA development kits. Board changes We were pleased to welcome John Scott to the Board as a non-executive Director in April. John is an executive director of Lazards and brings a wealth of international business experience to the Board. Outlook The breadth of applications for ink jet is wider than ever and we are seeing a continued increase in demand for our products and technology. Our well-protected and growing patent portfolio continues to provide a basis for licensing opportunities. In the XaarJet business we are committed to exploiting new markets in Asia and the US and to further developing sales with our existing customers. We will also be expanding our product portfolio later in the second half with the launch of our first water-based ink compatible printhead, which will open up new markets, including the world's largest industrial printing market - textile printing. Although world economic conditions have created a difficult trading environment for many businesses, especially in the US and Japan, our growth was not impacted by these adverse conditions during the first half of 2001. In this environment there are no certainties and demand is difficult to predict beyond the immediate future. However, XaarJet has a solid order book for Q3 and we continue to have licence discussions with potential licensees, although fees from this business remain unpredictable by their nature. We approach the next six months with a strong determination to achieve our goals for continued growth of the business. Arie Rosenfeld 17 July 2001 Chairman CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 30 JUNE 2001 Notes 6 months 6 months 12 months to to to 31 30 June 30 June December 2001 2000 2000 (unaudited)(unaudited)(audited) £'000 £'000 £'000 Turnover 12,272 10,755 22,746 Cost of sales (4,992) (5,098) (9,831) Gross profit 7,280 5,657 12,915 Other operating expenses (net) (5,370) (5,041) (10,434) Operating profit 1,910 616 2,481 Interest receivable 163 121 276 Interest payable (33) (38) (80) Profit on ordinary activities before taxation 2,040 699 2,677 Tax on profit on ordinary activities (447) (347) (360) Retained profit for the financial period 1,593 352 2,317 Earnings per share - basic 1 2.7p 0.6p 4.1p Earnings per share - diluted 1 2.6p 0.6p 3.8p Consolidated statement of total recognised gains and losses 6 months 6 months 12 months to to to 31 30 June 30 June December 2001 2000 2000 (unaudited)(unaudited) (audited) £'000 £'000 £'000 Retained profit for the financial period 1,593 352 2,317 (Loss)/gain on foreign currency translation (528) 117 (112) Total recognised gains and losses relating to the period 1,065 469 2,205 CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2001 As at As at As at 30 June 30 June 31 December 2001 2000 2000 (unaudited)(unaudited) (audited) £'000 £'000 £'000 Fixed assets Intangible assets 1,523 1,203 1,642 Tangible assets 4,209 4,513 4,176 Investments 20 20 20 5,752 5,736 5,838 Current assets Stocks 1,461 995 921 Debtors 5,721 4,315 4,928 Cash and liquid resources 8,791 7,141 8,008 15,973 12,451 13,857 Creditors: amounts falling due within one year (4,203) (4,281) (4,025) Net current assets 11,770 8,170 9,832 Total assets less current liabilities 17,522 13,906 15,670 Creditors: amounts falling due after more than one year (222) (232) (126) Net assets 17,300 13,674 15,544 Capital and reserves Called-up share capital 5,921 5,697 5,742 Share premium account 10,956 10,408 10,484 Other reserves 1,095 1,042 1,055 Accumulated deficit (672) (3,473) (1,737) Shareholders' funds - all equity 17,300 13,674 15,544 CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2001 6 months 6 months 12 months to to to 31 30 June 30 June December 2001 2000 2000 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Net cash inflow from operating activities 1,160 3,333 5,333 Returns on investments and servicing of 119 76 193 finance Capital expenditure and financial (603) (634) (1,530) investment Cash inflow before management of liquid resources and financing 676 2,775 3,996 Management of liquid resources 545 (2,040) (1,815) Financing 417 80 (153) Increase in cash in the period 1,638 815 2,028 Cash and Liquid Resources Comprise: As at As at As at 30 June 30 June 31 December 2001 2000 2000 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Cash at bank and in hand 4,536 2,116 3,208 Treasury deposits 4,255 5,025 4,800 8,791 7,141 8,008 Notes to the Interim Financial Information 1. Earnings per ordinary share - basic and diluted The calculation of earnings per share is based on the profit for the period after taxation and on the weighted average number of ordinary shares in issue during the period of 58,556,295 (2000: 56,572,163) in respect of basic earnings per share, and 62,413,626 (2000: 60,591,331) in respect of diluted earnings per share (the only difference being in relation to exercises of share options). 2. Comparative figures The comparative figures for the financial year ended 31 December 2000 do not constitute statutory accounts for that financial year within the meaning of section 240 of the Companies Act 1985. These figures have been extracted from the audited accounts for that year, which have been delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The accounting policies that have been applied to these interim figures are consistent with those applied in the preceding annual accounts. Independent Review Report to Xaar plc Introduction We have been instructed by the company to review the financial information for the six months ended 30 June 2001 which comprises the consolidated profit and loss account, the consolidated statement of total recognised gains and losses, the consolidated balance sheet, the consolidated cash flow statement and notes to the interim financial information on pages 4 to 7. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999 /4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 June 2001. Arthur Andersen Chartered Accountants Betjeman House 104 Hills Road Cambridge CB2 1LH 17 July 2001

Companies

Xaar (XAR)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today