Mike Prentis and Richard Plackett, managers of BlackRock Throgmorton Trust (THRG), have held Xaar (XAR) for many years, during which time the company has benefited from sales of its platform 3 inkjet heads used in inkjet printers and taken significant market share.
Xaar was one of the most significant positive contributors to BlackRock Throgmorton Trust's relative performance over the year to 30 November 2013.
"Xaar issued a number of positive trading updates culminating in interim results, which showed organic sales growth of 78 per cent and earnings per share which had more than trebled," said Mr Prentis and Mr Plackett. "This performance is largely down to Xaar's success with the sales of its platform 3 inkjet heads, which are mainly being sold to enable the decoration of ceramic tiles, and Xaar has taken significant market share.
"The company remains well positioned and is looking at other applications for its printheads.
"We have held Xaar shares for many years, and through difficult periods of trading, so it is very pleasing to see management deliver such outstanding performance. Shares in Xaar rose by 278 per cent during the year."
Xaar was the trust's fourth largest holding at the end of 2013, accounting for 1.9 per cent of assets.
Xaar said in its most recent trading update that it expects adjusted revenue of approximately £134m for 2013, an increase of around 55 per cent on 2012's £86.3m. Revenue growth in 2013 was achieved mainly through significantly increased sales into the industrial sector, supported by strong growth in the packaging sector and modest growth in the graphic arts sector. Demand for Xaar's technology in the industrial sector was principally driven by the conversion of ceramic tile printing to digital inkjet from analogue processes, particularly in China. The company reports its 2013 preliminary results on 18 March.
Investors Chronicle last rated Xaar a 'hold' at 393p on 20 March 2013 because "the adoption of industrial inkjet is still in the early stages across many markets, so there's plenty of potential".
