Xaar warns on trading as new printhead sales disappoint

Xaar lost almost a third of its market value after the company said slow sales of its new printhead dragged trading below expectations.

The inkjet printhead maker said revenue for the half year to the end of June would be about £35m, including £9.8m of one-off royalties. A year earlier, revenue was £44m.

Trading since the end of June has been, and is expected to remain, below guidance issued in an earlier trading update on 27 June, the company said.

In its June trading statement, Xaar said revenue from new products would be weighted towards the second half and that annual profit was on track to meet forecasts. It did not repeat that guidance in the latest update.

"Although the reception of new products has been positive, adoption of the 1201 printhead, in particular, has to date been significantly slower than expected, and the rate of decline in ceramics continues to be aggressive," Xaar said.

The company’s shares fell 31% to 170p at 08:37 BST.

Xaar said it was reviewing options for "more extensive partnering" in its printhead business and that it would update investors on existing cost cutting efforts with interim results due on 5 September.

The warning is Xaar’s third since November when it said take-up of the 1201 had fallen short of expectations and the new printhead had suffered supply problems.