Xaar's results were given significant boost by EPS acquisition
Companies: Xaar plc
Xaar's shares took a tumble on Wednesday after the AIM-listed printing company reported mixed full-year results showing pre-tax profit up 13% and EPS up 17% on a reported basis but down 6% and 13% respectively on an adjusted basis. The firm's acquisition of EPS (named EPS, not earnings-per-share) boosted profits.
The Cambridge-based firm said total revenue had grown 3% in 2016 to £96m, with disappointing sales in ceramic tile printing offset by revenue from the EPS business. Adj operating margin fell 2% to 20%, but jumped 4% to 18% on a reported basis.
The results were slightly ahead of N+1 Singer's forecasts, with adjusted PBT falling by 6% to £19.5m, marginally better than the £18.7m N+1 Singer had forecast. Singers says reduced earnings visibility was also likely to be behind the restrained the share price:
"Xaar has made significant progress in terms of strategic development in 2016. Its growth drivers are broadening out and it remains focused on its target of £220m sales by 2020. However near term growth is dependent on new products and management has guided to a higher than normal H2 weighting and reduced visibility, which is likely to restrain the share price."
CEO Doug Edwards said it was an important year in the long-term development of the Group, with the conversion of analogue manufacturing techniques to digital inkjet solutions vital for its long-term prospects.
Shares in Xaar fell 7% as the market opened on Wednesday.
The FTSE has also been in the red the past two days after Wall Street had its worst day of the year yesterday on investor concern relating to the chances of Trump's trumped up infrastructure plan. At the time of writing: FTSE 100 (0.88%), FTSE 250 (1.16%), FTSE AIM (0.67%).
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