Xaar swings to H1 loss, says outlook uncertain

Xaar swung to a first-half loss and said the outlook was too uncertain to provide guidance after it wrote down inventory in the US.

The inkjet printhead maker reported a pretax loss of £2.1m for the six months to the end of June compared with a £1.3m profit a year earlier as revenue rose to £26.3m from £23.7m. The adjusted loss before tax widened to £2.3m from £1.3m.

Xaar declared no dividend and said it would not reinstate the payout until sustainable profit was restored. The company said the pandemic was continuing to cause disruption and that it was focused on securing components to avoid interruptions to printhead supplies.

The company's main printhead business improved in the first half, moving to earnings of £0.8m from a loss of £0.1m. The US Engineered Printing Solutions business was hit by a £1m writedown of slow-moving and obsolete stock. EPS's revenue fell 11% to £6.1m as end users were affected by the pandemic.

Chief Executive John Mills said: "The ongoing pandemic makes it difficult to provide reliable guidance on the outlook for the remainder of 2021 and beyond, however the short-term outlook remains positive with a healthy order book across the business."

Xaar said it was confident annual results would meet expectations but its shares fell 12.5% to 199p and were the biggest fallers in the FTSE All-Share index.

The company said EPS's underlying performance was on track and it was making operational improvements.