Trading Statement

Xaar PLC 02 July 2003 FOR IMMEDIATE RELEASE Xaar plc HALF-YEAR PERIOD-END TRADING UPDATE AND APPOINTMENT OF NEW CHIEF EXECUTIVE Xaar plc ('Xaar'), the inkjet printing technology group headquartered in Cambridge, presents an update on current trading at the end of its first half-year to 30 June 2003. Following the first quarter issues reported in early April, performance has improved steadily as the second quarter progressed. Sales for the first half as a whole were affected by the slow start to the year but picked up in the second quarter and ended only marginally down on the first half of last year. The company is encouraged by the performance to-date of the revised XJ500 printhead. However, the re-launch of the product in Asia, its largest market, has been hampered by the travel and other restrictions imposed in the region due to the SARS virus. It is now expected to be the second half of the year before a significant improvement in the sales of this product is seen. Sales of the XJ128 printhead remain on target with sales of the XJ126 printhead beginning to benefit from the new sales agreement announced in April. Manufacturing yields have improved during the second quarter and returned to target levels in June. The company is also now starting to see the benefits of the lower build-cost of the revised XJ500 product. As previously stated, the company expects to report a trading loss for the half-year. This will now be higher than expected at the time of the April statement due to slower take-up of the XJ500 and lower production yields prior to June. Further staff reductions were made across the company during the second quarter in order to bring costs into line with current trading levels. The resignation of Jan Fineman as Chief Executive is announced, effective immediately. Mr Fineman is leaving the company to pursue other interests and the company wishes him well for the future. Mr Ian Dinwoodie, currently Group Operations Director has been appointed as Chief Executive and will be progressing the strategy previously set out in the interim and annual reports for 2002. Mr Nigel Berry, Group Finance Director will assume the additional role of Deputy Chief Executive in support of Mr Dinwoodie. The company expects the second-half of the year to be stronger, as was also the case in the second-half of 2002. This is based on recent improvements in trading performance supported by the cost reduction measures announced in this and earlier statements. An update on the third quarter trading and the outlook for the full year will be given with the interim results which are expected to be announced towards the end of September 2003. 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 020-7444-4163 / 07802-888159 This information is provided by RNS The company news service from the London Stock Exchange

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Xaar (XAR)
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