Xaar (XAR) generated record revenue and doubled profits in 2013, but chief executive Ian Dunwoodie's decision to step down in 2015, after 12 successful years, wiped £83m or 11 per cent off the market value of the ink-jet printer specialist. That's flattering for Mr Dunwoodie, who says he always planned to leave when he hit 55. But his last full year in charge will be one of "more modest" growth.
China's ceramic tile decoration industry, the world's largest, continued its conversion from analogue to digital last year. Xaar's Huntingdon facility was running flat out for most of 2013 as a result, and with further manufacturing efficiencies to boot, the adjusted operating margin leapt by almost a third to 30 per cent, propelling adjusted pre-tax profit up 123 per cent to £41.1m. That's all the more impressive since R&D spend doubled to £16.4m. Spending on technology and product development is crucial to drive conversion of other industries to digital, and a number of product launches pencilled in for 2014 should accelerate demand at the graphic arts business.
Broker N+1 Singer expects adjusted pre-tax profit of £42m this year, giving adjusted EPS of 44.4p (from 43.2p in 2013).
XAAR (XAR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 909p | MARKET VALUE: | £692m | |
| TOUCH: | 907-909p | 12-MONTH HIGH: | 1,191p | LOW: 330p |
| DIVIDEND YIELD: | 0.9% | PE RATIO: | 21 | |
| NET ASSET VALUE | 145p | NET CASH: | £53.5m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 42 | -0.7 | 0.1 | 2.5 |
| 2010 | 55 | 5.4 | 6.3 | 2.5 |
| 2011 | 69 | 9.1 | 10.8 | 3 |
| 2012 | 86 | 15.7 | 17.5 | 4 |
| 2013 | 137 | 40.1 | 43.3 | 8 |
| % change | +59 | +155 | +147 | +100 |
Ex-div: 21 May Payment: 20 Jun | ||||
