On paper, printing technology business Xaar endured a pretty torrid six months. But, as its chief executive Ian Dinwoodie pointed out, comparisons with the first half of 2008 are slightly unfair because "the world changed in the middle of the year."
So, as Mr Dinwoodie notes, while the year-on-year performance looked weak, in fact trading improved considerably over the second half of 2008. Sales were up 7 per cent sequentially, and after swinging into losses at the end of last year, improved trading and reduced factory costs meant the company became profitable once again, albeit marginally.
Profitability would have been higher, though, had Xaar not been forced to reduce prices aggressively to win back Chinese market share lost to licensees of its own technology. Rivals poached around 30 per cent of its market share, but Xaar believes it has clawed back around half of this and now controls around half of the market. It also incurred higher than expected costs supporting customers developing products based on its new P3 technology, few of which have yet moved into volume sales.
Plans to relocate its Swedish facility to the UK are on track - the move is expected to save around £2m a year and reduce foreign exchange volatility. Broker Panmure expects full-year EPS of 3.01p, down from 6.16p in 2008.
| ORD PRICE: | 90p | MARKET VALUE: | £ 56.6m | |
| TOUCH: | 88-92p | 12-MONTH HIGH: | 122p | LOW: 36p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | na | |
| NET ASSET VALUE: | 59p | NET CASH: | £10.3m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 22.5 | 3.75 | 4.5 | 1.0 |
| 2009 | 20.9 | 0.78 | -1.4 | 1.0 |
| % change | -7 | -79 | - | - |
Ex-div:26 Aug Payment:25 Sep | ||||
