Final Results 2011

Xaar plc ("Xaar", the "group" or the "company"), the inkjet printing technology group headquartered in Cambridge, announces its results for the year ended 31 December 2011.

Key points:

• Strong growth in revenue and profit driven by demand for Platform 3 products from the ceramic decoration sector.
• Increased output to meet growing demand was achieved through the successful implementation of the first stages of a £22m capacity expansion programme at Xaar's Huntingdon facility.
• The remaining stages of the expansion programme are on track to complete by the end of June 2012, three months ahead of the original plan.
• Sales into the graphic arts segment declined, as expected, reflecting market maturity and competition.  A recovery plan in this segment is underway.

The financial highlights were:

• Revenue was up 26% to £68.7m (2010: £54.7m);
• Adjusted* gross margin improved to 44% (2010: 42%);
• Adjusted* profit before tax was up 90% to £10.6m (2010: £5.6m);
  Reported profit before tax was £9.1m (2010: £5.4m);
  Adjusted* diluted earnings per share up 73% to 10.7p (2010: 6.2p);
• Reported diluted earnings per share at 10.4p (2010: 6.1p); and
• Net cash** at 31 December 2011 was £17.4m (31 December 2010: £22.0m).
   * Before restructuring costs, exceptional commercial agreement costs, exchange differences on intra-group transactions, share-based payment charges, and the gain or loss on derivative financial instruments (see the reconciliation of adjusted financial measures)
  **  Cash less borrowings

• A final dividend of 2.0 pence is recommended, which would increase the total dividend for 2011 to 3.0 pence (2010: 2.5 pence).  Further dividend increases in future years may be considered.
• Following the resignation of Xaar's nine support staff in China in January 2012, direct contact with customers from UK HQ has been successful in maintaining business levels in the year to date.  Xaar will support Chinese customers with sales and technical staff in Hong Kong.  No adverse impact on 2012 is expected.

Commenting on the results, Chairman, Phil Lawler stated:

"I am pleased to report that Xaar has delivered an excellent set of financial results for 2011, in a very uncertain macro-economic climate, whilst executing a capacity expansion to enable the company to satisfy strong demand for its products.  Our continuing success in the ceramic decoration market is driving the profitable development of our business, which is enabling additional resources to be applied to both the expansion of the current product portfolio and the development of technology for future products."