It's good to have a goal in life, but whether it's achievable or not depends on the extent of your ambition - and more often than not, on good fortune. In March, Xaar (XAR) unveiled its strategic vision to achieve annual sales of £220m by 2020. That suggests a compound annual growth rate of 18.8 per cent based on 2015 revenues; not beyond the bounds of possibility, but a stretch based on the performance of the ink-jet manufacturer ever since Chinese demand for the group's core ceramic tile-printing products tanked in 2014.
Hopes are high for the new Xaar 1003 range of printheads, launched in March, together with the Thin Film Piezo Silicon MEMS 5601 series which was brought out in June. Xaar also established a strategic partnership with global technology heavyweight Ricoh and completed its first acquisition shortly afterwards with the takeover of Engineered Printing Solutions.
Half-year figures were broadly in line with market expectations, though headline figures were flattered by a one-off contractual payment on royalty revenues and £4.8m in restructuring costs booked in the comparable period in 2015.
While Peel Hunt anticipates progress towards Xaar's revenue target, the broker predicts that adjusted earnings will drop from 21p a share at the December 2016 year-end to 16.5p in 2017 (from 24.5p last year).
| XAAR (XAR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 505p | MARKET VALUE: | £385m | |
| TOUCH: | 490p-505p | 12-MONTH HIGH: | 567p | LOW: 381p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 176p | NET CASH: | £69m* | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 47.8 | 3.7 | 4.9 | 3.15 |
| 2016 | 44.5 | 7.7 | 8.7 | 3.3 |
| % change | -7 | +104 | +78 | +5 |
Ex-div: 1 Sep Payment: 30 Sep *Includes treasury deposits of £20.2m. | ||||
