Inkjet printing technology group, Xaar is feeling the manufacturing screw beginning to loosen after a torturous 2009 - particularly in Asia. Although, strip-out exceptionals such as restructuring costs, and adjusted pre-tax profit still fell 7 per cent to £2.6m.
In fact, Xaar has been clawing back market share in China, and Asian sales jumped 10 per cent to £22.4m in 2009. Still, revenues in the graphic arts operation did fall 8 per cent to £21.3m - largely reflecting lower European activity. Indeed, total European sales fell 14 per cent year-on-year to £12.8m due to a decline of old-style 'P1' technology-based business in both the graphic arts and coding and marking segments. Although take-up of state-of-the art P3 based business strengthened strongly in the 2009's final months and industrial sales jumped 20 per cent to £6m, thanks to demand for printing on ceramics such as cups and plates. The gradual uptake of P3 technology should bolster earning longer-term as adoption expenditure falls.
The shift of Xaar's Swedish manufacturing to the UK remains on track for an early 2011 finish; a move that should deliver roughly £2m a year in cost savings. Singer Capital Markets expects adjusted pre-tax profit of £4.6m for 2010, giving EPS of 5.4p (2009: £2.6m/3.8p).
XAAR (XAR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 83p | MARKET VALUE: | £52m | |
| TOUCH: | 80-85 | 12-MONTH HIGH: | 124p | 63p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 138 | |
| NET ASSET VALUE: | 59p* | NET CASH: | £11.1m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 42.8 | 10.0 | 11.6 | 1.50 |
| 2006 | 42.2 | 6.91 | 7.90 | 2.00 |
| 2007 | 47.9 | 7.32 | 8.90 | 2.50 |
| 2008 | 42.0 | 4.35 | 5.60 | 2.50 |
| 2009 | 42.1 | -0.19 | 0.60 | 2.50 |
| % change | - | - | -89 | - |
Ex-div:2 Jun Payment:25 Jun | ||||
