Xaar’s steady climb back to growth has been dented by economic conditions which led to customers putting off product planned product launches until later this year.
Xaar reckons that in 2023 there were 12 product introductions using Xaar’s printheads with more anticipated for the current year, some no doubt at Drupa.
The consequence of the delay was that revenue fell to £70.6 million (£72.8 million) with an operating loss of £1.9 million (£1.2 million profit). while disappointing, the company is convinced that its plans are well founded and that the company is positioned to take advantage of its unique technology, specifically the high viscosity inks and development of its ImagineX platform.
There was a significant down turn in the final quarter of the year in the critical ceramics sector, the company says. It remains the largest single sector of the Cambridge inkjet specialist. By contrast sales in textiles and packaging, both considered to be key new markets for the Aquinox high viscosity water based inks, are tiny by comparison.
CEO John Mills remains confident that customers will see the benefits of printing with high viscosity inks “with all the performance and sustainability benefits they deliver”.
He continues: “Adoption of our customers’ products is taking longer than expected, impacting our revenue, however, we have put in place a cost action plan to mitigate this. We remain optimistic about the future, being well placed to benefit as the trading environment improves.
“With a substantial market opportunity and the progress made, we remain well positioned to realise our exciting potential.”
The company has put the lid on costs and is prepared to invest between £10-15 million to improve manufacturing facilities across the business once business performance improves. Project Hubble is the code name for a project to identify commercial strategic opportunities, improve operational efficiency, increase organisation effectiveness and to improve customer integration. This aims to deliver an annual saving of £2 million to Xaar.
A further series of initiatives is intended to increase sales. The many wants to spread the sales based geographically, so reduce its dependence on the Chinese market. Targeting OEMs in Europe and the US will also increase the diversity of the market segment addressed. It further wants to develop relationships with end users which has not happened previously. There is an opportunity in the 3D sector for Xaar to gain recognition among end consumers, and a greater opportunity of Xaar can gain a better understanding of what drives end users and how Xaar’s technology fits. This would be done in collaboration with OEMs. Associated with this is the third initiative to help customers implement solutions based around high viscosity inks and so overcome technical challenges. This includes in-house development to simulate and identify issues before they can become an issue in the field.
The company received a £2.0 million injection from selling patents associated with FFEI’s bio scanning arm as Xaar withdraws from this sector. FFE also delivered a good performance along with newly acquired Megnajet and from the Engineered Printing Solutions business where revenue increased 13% in the year.
