Year-End Trading Update

Xaar PLC
07 January 2003


For Immediate Release                                           7 January 2003



                                   XAAR plc

                          YEAR-END TRADING UPDATE


Xaar plc ('Xaar'), the ink jet printing technology group headquartered in
Cambridge, today provides a trading update ahead of its financial results for
the full year to 31 December 2002 due to be announced on 19 February 2003.


Profit before tax for the year is expected to be broadly within the range of
market expectations with cash balances at the end of the year similar to those
at the beginning of the year.


The forthcoming results will show continuing strong demand for Xaar's
own-manufactured XaarJet range of products, with second-half sales ahead of the
level reported in the first half of the year.  Sales of the XJ500 product in
particular more than doubled in the year. However, the final months of the year
saw the need for a number of modifications to the product due to a higher than
expected level of warranty returns which affected margins during the last four
months of the year. The issues which gave rise to these modifications have now
been resolved and provision has been made for the related warranty costs.


As previously indicated, no new licence was signed in the year.


Work on improving Xaar's tax structure is expected to result in substantial
progress towards normalising the group's tax charge during 2003, with some
benefit seen in 2002.



Ends


For more information, please contact:

Jan Fineman, Chief Executive          Xaar                        01223 423663

Nigel Berry, Finance Director         Xaar                        01223 423663

Steve Liebmann or Lisa Baderoon       Buchanan Communications     020 7466 5000




                      This information is provided by RNS
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