Xaar (XAR) H2 2023 earnings summary

Executive summary

• FY23 performance was in line with expectations, with adjusted profit before tax of £2.9m; challenging market conditions continued into FY24.

• Strategy centers on expanding printhead sales through broader products and supporting system components, targeting a £1bn total addressable market.

• Stronger development pipeline and long-term opportunity were offset in the near term by OEM delays.

Financial highlights

• Revenue £70.6m, down 3% YoY; gross margin 38% vs 39% in FY22.

• Adjusted EBITDA £6.4m, up 3%; adjusted PBT £2.9m, up 4% YoY.

• Adjusted operating expenses were £25.7m vs £25.6m; net assets were £71.8m, unchanged YoY.

• Trade working capital increased to £33.5m from £30.1m; cash was £7.1m vs £8.5m.

Outlook and guidance

• FY24 expectations remain unchanged, with challenging Q4 trading conditions continuing into FY24 and cost management measures in place.

• Development pipeline projects rose 26% from 2023; qualified interest fell 32% as pipeline qualification became more stringent.

• A beta installation in ceramics and glass is scheduled for May after a six-month delay; potential system product launch targeted for H2 2024.

• A 3D consumer product launch moved to Q3 2024 after customer feedback on beta design; first 3D wax product launch expected April 2024.

• Next-generation printhead launch is planned for 2025; graphics printhead development was pushed back to 2025.