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Xaar warns on full-year revenues after trading in final quarter misses expectations

Revenues were hit by declining sales to the ceramics industry and a slower-than-expected uptake of the Xaar 1201 printhead product
Shares fell more than 12% in morning trading

Industrial inkjet tech firm Xaar PLC (LON:XAR) expects full-year revenue to fall after a disappointing final quarter.

The company said it estimates revenue for the year of £64mln, compared to £100.1mln in 2017.

“While good progress has been made in developing potential future revenue streams through partnerships with a number of original equipment manufacturers who are basing their next generation products on the Xaar 5601 Thin Film printhead technology, revenues in the shorter-term have continued to be adversely impacted by declining sales into ceramics and slower than expected uptake of the Xaar 1201 product,” the group said.

As a result, Xaar now predicts revenues in the second half ended December 2018 to be “only slightly better” than the first half.

READ: Xaar plummets on cost reductions announcement as legacy business trading disappoints

Gross profit margins will be also be hurt by sales mix effects.

Xaar added that it is still reviewing strategic options for partnering in the printhead business unit and expects to update shareholders on this at its annual results on March 21.

Shares fell 12.4% to 139.4p in morning trading.

In June the group warned that its full-year revenue expectations for the ceramics market would not be achieved but it was likely to meet profit forecasts thanks to planned cost cuts.  

The company had expected second-half revenue to have a "stronger weighting" on annual results, as it increased the proportion of revenue represented by sales of new products.


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