Xaar to invest in UK capacity after profits boost
packagingnews.co.uk, 20 August 2010
Inkjet printhead manufacturer Xaar is investing in new capacity
at its Huntingdon site after increased demand led to a strong
performance in the first half of the year.
The Cambridge-based business recorded a pre-tax profit of £1.8m,
improving on an £800,000 loss last year, on the back of a 14% rise in
revenues to £23.9m.
This was backed by healthy royalty growth and a 131% increase in P3 sales to the industrial inkjet sector.
Gross
margin declined slightly to 39% (H1 2009: 42%) due to "excessive costs
of manufacturing, warranty and customer support" related primarily to
new products, although Xaar said this was the financial result of
problems that had arisen in 2009 and were now "under control and
continuing to reduce".
Xaar has reversed the previously announced
closure of its Swedish facility and announced an investment in
additional capacity at its Huntingdon, Cambridgeshire site, due to come
on stream in 2011.
Operations that have already been transferred
from Sweden to Huntingdon will remain in the UK, however, the
manufacture of some finished goods and sub assemblies will now remain at
the firm's Jarfällä facility.
"This allows us to maximise P3
production, the benefits of which will significantly outweigh the
benefits of the previously planned plant consolidation," said Xaar
chairman Phil Lawler.
Commenting on the firm's outlook, Lawler
added that, while the global economy remained uncertain, the combination
of better visibility in certain markets and rising P3 product demand
had persuaded the board that "further and substantial investment in
capacity and capability will be necessary to capitalise on the
potential".
"We are increasingly confident about the market
potential for P3," said Lawler. "While the past two years have been
testing for the management team, we are excited about the opportunities
that have emerged and are committed to pursuing them."