(XAR) Xaar PLC

Xaar plc

China Staff Changes

Xaar plc ("Xaar" or "the Group" or "the Company"), the inkjet printing technology group headquartered in Cambridge, announces that its representative office staff in China ("the China staff"), comprising seven employees and two contractors, have resigned with immediate effect. 

At the end of December 2011, the China staff raised some concerns about the perceived unfair treatment of both themselves and some Chinese customers compared to other regions.  The Company undertook a detailed investigation into the concerns, which included allegations that Xaar's pricing and shipment policies had created an unfair market.  Xaar has taken the allegations extremely seriously and, having completed a thorough investigation, has found no evidence to substantiate the allegations. 

However, the China staff rejected the conclusions of the investigation, and have now resigned, despite intensive efforts on the part of the Company over the past two weeks to resolve the situation amicably.

Sales order processing and product distribution of Xaar's technology into China is handled by an independent trading company, and therefore supply channels are not expected to be affected.  At this stage the impact of the resignations is not expected to be material to Xaar's 2012 earnings. 

Short term actions to support Xaar's Chinese customers are being implemented immediately, and an update on the Company's longer term arrangements for China will be provided with its 2011 results announcement on 20 March 2012.

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Xaar plc

YEAR END TRADING UPDATE

Xaar plc ("Xaar" or "the Group" or "the Company"), the inkjet printing technology group headquartered in Cambridge, announces an update on trading for the year ended 31 December 2011.

Trading for the fourth quarter of the year was slightly ahead of the Board's expectations, leading to a strong performance for the full year 2011.

Xaar expects to announce revenue of approximately £69 million for 2011, an increase of over 25% compared to 2010 (£54.7 million).

Revenue growth in 2011 was achieved mainly by increased sales into the industrial segment.  Demand for Xaar's technology in this segment is principally driven by the conversion of ceramic tile printing to digital inkjet from analogue processes.  During the year, Xaar made good progress with the capacity expansion programme to support this demand and the programme remains on track to continue to deliver the planned incremental capacity during the first half of 2012.

As expected, product sales into the graphic arts segment declined in 2011 by approximately 15% compared to 2010.  As previously described, this decline reflects market maturity and competitive pressure.

The Group continues to maintain a strong balance sheet with net cash at 31 December 2011 of £17.4 million (30 June 2011 - £20.6 million; 31 December 2010 - £22.0 million).

The detailed results for 2011 are expected to be announced on 20 March 2012.

Board changes

As previously announced Phil Eaves, Sales and Marketing Director, informed the Company in 2011 of his intention to retire from full time employment in June 2012.  Following an extensive search process, the Company is pleased to announce that Richard Barham has been appointed Sales and Marketing Director and member of the Xaar board with effect from 5 March 2012.  After completion of a handover period, Phil Eaves will continue to support the Company in a consultant role until 30 June 2012.

Ian Dinwoodie, Chief Executive commented:

'On behalf of everyone at Xaar, I would like to thank Phil for his efforts and contribution over the last 7 years during which our revenues have grown significantly.  We all wish him well for the future.

I am pleased to welcome Richard to the Board, who brings a wealth of experience gained through 25 years spent in numerous sectors of the Imaging and Printing industries.'

Since 1986, Mr Barham has held a range of sales, marketing and management positions at Agfa Graphics NV, where most recently, since February 2008, he acted as Vice President of the Inkjet Division where he was responsible for turning the business around and integrating a major acquisition. 

There is no further information concerning Mr Barham which requires disclosure under rule 9.6.13 of the UK Listing Authority Listing Rules.

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