TIDMXAR
RNS Number : 6215M
Xaar PLC
18 August 2011
The headline for the Xaar plc announcement released on 18 August
2011 at 7.00am under RNS No 5647M should read Half Yearly
Report.
The announcement text is unchanged and is reproduced in full
below.
FOR IMMEDIATE RELEASE 18 August 2011
Xaar plc
2011 INTERIM REPORT
Xaar plc ("Xaar"), the inkjet printing technology group
headquartered in Cambridge, has issued its interim report for the 6
months ended 30 June 2011.
Financial summary
Year to December
Six months to June 30 31
------------------------------ ------------------------ -----------------
2011 2010* 2010
------------------------------ ----------- ----------- -----------------
Revenue GBP31.6m GBP23.8m GBP54.7m
------------------------------ ----------- ----------- -----------------
Gross profit GBP13.9m GBP9.4m GBP22.6m
------------------------------ ----------- ----------- -----------------
Gross margin % 44% 39% 41%
------------------------------ ----------- ----------- -----------------
Adjusted** profit before tax GBP4.3m GBP1.4m GBP5.6m
------------------------------ ----------- ----------- -----------------
Reported profit before tax GBP4.1m GBP1.9m GBP5.4m
------------------------------ ----------- ----------- -----------------
Adjusted** diluted earnings 4.3p 1.7 p 6.2p
per share
------------------------------ ----------- ----------- -----------------
Diluted earnings per share 4.1p 2.2 p 6.1p
------------------------------ ----------- ----------- -----------------
Net cash at period end GBP20.6m GBP8.2m GBP22.0m
------------------------------ ----------- ----------- -----------------
Dividend per share 1.0p 1.0p 2.5p
------------------------------ ----------- ----------- -----------------
* H1 2010 restated in relation to recognition of revenue from a
distributor. This restatement is consistent with the 2010 Annual
Report. Further details are provided in note 2.
**Before restructuring provisions, exchange differences on
intra-group transactions, gain on derivative financial instruments,
exceptional commercial agreement costs and the cost of share-based
payments.
Key points
o Strong financial performance; revenue up 33% over H1 2010.
o Growth driven by Platform 3 (P3) products for industrial
applications.
o Profitability has increased with both gross margin and profit
before tax substantially up over H1 2010.
o The Huntingdon expansion programme for P3 production is on
track to deliver further capacity increases during H2 2011 and H1
2012.
o The market for Platform 1 (P1) products is showing signs of
maturity with sales reducing against H1 2010.
Chairman, Phil Lawler commented:
"Our sales performance in the period has validated our
confidence in the market potential for P3 products and we are
pleased to report that our capacity expansion programme remains on
track. We are excited about the opportunities that have emerged and
are committed to pursuing them."
CONTACTS
Xaar plc: 01223-423663
Ian Dinwoodie, Chief Executive www.xaar.com
Alex Bevis, Finance Director
Singer Capital Markets
Limited: 020-3205-7626
Shaun Dobson
Bankside Consultants:
Simon Bloomfield or James
Irvine-Fortescue 020-7367-8888
CHAIRMAN'S STATEMENT
Introduction
During the first half of 2011, revenues have continued to
increase and were up 33% compared with H1 2010. The growth over H1
2010 reflects the substantial demand for Platform 3 ("P3") for
industrial applications, which has been satisfied through a
combination of productivity gains and the completion of the early
stages of the capacity expansion programme at our Huntingdon
facility. Against the same period, Platform 1 ("P1") sales have
fallen, reflecting market maturity and some loss of market
share.
The geographic spread of our sales has continued to shift
towards continental Europe through the growth in P3. Our increasing
exposure to Euro-denominated revenues (37% of H1 sales versus 25%
of sales in 2010) is partly mitigated by Euro capital expenditure
related to capacity expansion as well as normal Euro-denominated
costs.
Royalty revenue from our licensees has increased slightly (6%
over H1 2010).
The Group is profitable and growing. Adjusted profit before tax
trebled against the same period last year to GBP4.3m (H1 2010
restated: GBP1.4m).
The Group's net cash reduced as expected during the period as a
result of capital investment related to the capacity expansion
programme which remains on track to deliver further incremental P3
capacity during the second half of 2011 and first half of 2012.
Results
Revenues for the six months ended 30 June 2011 were GBP31.6m (H1
2010 restated: GBP23.8m; H2 2010: GBP30.9m). Product sales were
GBP28.2m (H1 2010 restated: GBP20.5m; H2 2010: GBP26.8m). Royalty
revenue was GBP3.3m (H1 2010: GBP3.1m; H2 2010: GBP3.9m).
Development income continues to be immaterial.
Adjusted gross margin at 44% has continued to improve (H1 2010
restated: 41%; H2 2010: 43%), reflecting production efficiencies
and revenue growth.
Adjusted profit before tax for the period was GBP4.3m (H1 2010
restated: GBP1.4m; H2 2010: GBP4.2m). Reported profit before tax
was GBP4.1m (H1 2010 restated: GBP1.9m; H2 2010; GBP3.5m).
After payment of the final dividend for 2010 of GBP1.1m and
GBP5.2m of capital investment (excluding capitalised development
costs), net cash reduced by GBP1.4m during the period to GBP20.6m
(31 December 2010: GBP22.0m; 30 June 2010: GBP8.2m).
Business Commentary
The geographic spread of our business, in terms of revenue, is
now EMEA 57% (H1 2010 restated: 42%; H2 2010: 48%), Asia 32% (H1
2010 restated: 43%; H2 2010: 39%), and the Americas 11% (H1 2010
restated: 15%; H2 2010: 13%). Whilst we have benefited during the
past few years from the majority of sales coming from a high growth
region (Asia), this also increased the risks associated with more
volatile markets. We have now established reasonable volume in both
Asia and EMEA and expect to capitalise on the improved balance that
now exists in the business.
Continued success with P3 in industrial applications has enabled
us to establish a major market for that product family in EMEA,
with potential for other regions. Manufacturing efficiencies and
increased shift patterns, coupled with the first deliveries of new
processing equipment, have all helped to achieve a better than
expected P3 revenue in the first half of the year. Platform 2
("P2") sales remain a small proportion of our business although
they increased over the same period last year. As already
announced, this product family has been largely superseded by P3
and hence further volume increases are not expected. P1 sales have
been disappointing and have declined more quickly than planned.
This reflects a number of factors including reduced product
replacement orders as older P1 based printers are superseded by
newer versions, not always with Xaar printheads. This market is
very mature and the P1 product family refreshes have not been as
successful or as dominant as we had planned. Royalty revenues have
increased over the same period last year, reflecting a switch of P1
market share to some licensees.
Industrial sector growth continues with sales increasing by 132%
over H1 2010. Growth in the Packaging sector was a more modest 12%
over H1 2010, reflecting the adoption of P3 in one sub sector and
maturing market decline of P1 in another. Graphic Arts growth of 1%
compared to H1 2010, which also represents a decline against H2
2010 sales, is disappointing. Work continues in this area to
improve results.
Good progress has been made with the expansion programme which
we began in November 2010, with all constituent elements going
according to plan. This involves a major development of our
facility in Huntingdon, including the construction of a full third
clean-room. In addition to the facilities upgrade and expansion, we
have ordered a range of high value, sophisticated processing, test
and measurement equipment, some of it unique to Xaar.
The successful installation and commissioning of this equipment
continues to receive a high degree of focus and attention and is
fundamental to our being able to increase P3 manufacturing capacity
as planned. Inevitably, such changes are not without their
challenges but we are on track and remain confident that this
expansion programme will be successfully concluded during 2012 as
previously announced.
Aligned with this physical expansion has been a significant
increase in employee recruitment. This increase covers many
disciplines and we have been successful in attracting the skill
sets and calibre of people required. Headcount increases of this
size require a great deal of effort, not just in recruitment but
also in the resulting organisational expansion, integration and
training. We have been successful in this area which continues to
receive the appropriate attention.
Progress has been made in improving the management of new
product development, manufacturing and integration. This in turn
has enabled a refocusing of resource back on to future product
versions and technologies that will sustain our growth for the
longer term. We continue to manage our patent portfolio closely,
and we regularly monitor possible conflicts and competitive
activity.
As a result of our formal strategy review, held early this year,
we confirmed that our approach remains niche with our commercial
focus entirely on a few applications and leading OEMs where we can
make the most impact.
Dividend
Based on the continuing cash generation of the business, an
unchanged interim dividend of 1.0p per share will be paid on 23rd
September 2011 to shareholders on the register at close of business
on 26th August 2011.
Board
As previously reported Rob Eckelmann, non-executive and senior
independent director, decided to retire from the board at the
company's Annual General Meeting in May of this year, and was
replaced by David Cheesman. I would like to thank Rob for the
benefit of his considerable experience and almost six years of wise
counsel. Robin Williams, non-executive director, was appointed
Senior Independent Director in May.
Also as previously reported, Phil Eaves, Sales and Marketing
Director, has notified the company of his intention to retire in
mid 2012. A process is underway to ensure an appropriate successor
is in place during the second quarter of 2012.
Outlook
We continue to live in an economically challenged world where
growth is uncertain. For Xaar, the successful expansion of our
manufacturing capacity, as planned, will represent a major
milestone achieved. Although uncertainties remain, we believe that
the market for P3 products will continue to be strong and that our
new manufacturing capacity will enable us to capitalise on this
demand. Our competitive advantage is the result of supplying a
product capable of delivering significant benefits to our customers
in selected segments of the inkjet printing market. Although we
assume that competition will develop over time, the barriers to
entry are high and we believe that our disruptive technology,
combined with our management experience, technical skill, talent
and resources, will enable us to maintain our competitive edge for
a sustained period.
Phil Lawler
Chairman
18 August 2011
DIRECTORS' RESPONSIBILITIES STATEMENT
We confirm that to the best of our knowledge:
(a) the condensed set of financial statements has been prepared
in accordance with IAS 34 "Interim Financial Reporting" as adopted
by the EU.
(b) the interim management report includes a fair review of the
information required by DTR 4.2.7R:
(i) an indication of important events that have occurred during
the first six months of the financial year and their impact on the
condensed set of financial statements, and
(ii) a description of principal risks and uncertainties for the
remaining six months of the year.
(c) the interim management report includes a fair review of the
information required by DTR 4.2.8R:
(i) related parties transactions that have taken place in the
first six months of the current financial year that have materially
affected the financial position or performance of the Group in that
period, and
(ii) any changes in the related parties transactions described
in the Annual Report 2010 that could have a material effect on the
financial position or performance of the group in the current
period.
By order of the board
IAN DINWOODIE
CHIEF EXECUTIVE
ALEX BEVIS
FINANCE DIRECTOR
18 August 2011
Condensed consolidated income statement
for the six months ended 30 June 2011
Six Six Twelve
months months months
ended ended ended
30 June 30 June 31 December
2011 2010 2010
(reviewed,
restated,
(reviewed) note 2) (audited)
Notes GBP'000 GBP'000 GBP'000
------------------------------ ------ ----------- ----------- ------------
Revenue 3 31,593 23,820 54,678
Cost of sales (17,732) (14,338) (32,085)
Restructuring costs - (111) -
------------------------------ ------ ----------- ----------- ------------
Gross profit 13,861 9,371 22,593
Distribution costs (2,161) (1,863) (3,623)
Administrative expenses (7,615) (6,771) (14,596)
Restructuring costs - 1,172 1,107
------------------------------ ------ ----------- ----------- ------------
Operating profit 4,085 1,909 5,481
Investment income 34 14 42
Finance costs (48) (50) (92)
------------------------------ ------ ----------- ----------- ------------
Profit before tax 4,071 1,873 5,431
Tax 4 (1,048) (449) (1,442)
------------------------------ ------ ----------- ----------- ------------
Profit for the period
attributable to
shareholders 3,023 1,424 3,989
------------------------------ ------ ----------- ----------- ------------
Earnings per share
Basic 5 4.3p 2.3p 6.3p
Diluted 5 4.1p 2.2p 6.1p
------------------------------ ------ ----------- ----------- ------------
Dividends paid in the period amounted to GBP1,062,000 or 1.5p
per share 2010 final dividend (six months to 30 June 2010:
GBP928,000 or 1.5p per share 2009 final dividend; twelve months to
31 December 2010: GBP1,545,000 or 2.5p per share being 1.5p per
share 2009 final dividend and 1.0p per share 2010 interim
dividend).
Reconciliation of adjusted financial measures
for the six months ended 30 June 2011
Six Six Twelve
months months months
ended ended ended
30 June 30 June 31 December
2011 2010 2010
(reviewed,
restated,
(reviewed) note 2) (audited)
GBP'000 GBP'000 GBP'000
-------------------------------------- ----------- ----------- ------------
Gross profit 13,861 9,371 22,593
Restructuring costs - 111 -
Exceptional commercial agreement
costs - 192 271
-------------------------------------- ----------- ----------- ------------
Gross profit (adjusted) 13,861 9,674 22,864
-------------------------------------- ----------- ----------- ------------
Profit before tax 4,071 1,873 5,431
Restructuring costs (5) (1,061) (1,107)
Exceptional commercial agreement
costs - 382 461
Exchange differences on intra-group
transactions (353) 207 (462)
Gain on derivative financial
instruments - (39) (39)
Share-based payment charges 573 46 1,276
-------------------------------------- ----------- ----------- ------------
Profit before tax (adjusted) 4,286 1,408 5,560
-------------------------------------- ----------- ----------- ------------
Six Six Twelve
months months months
ended ended ended
30 June 30 June 31 December
2011 2010 2010
(reviewed,
(reviewed) restated) (audited)
Per share Per share Per share
-------------------------------------- ----------- ----------- ------------
Diluted earnings per share 4.1p 2.2p 6.1p
-------------------------------------- ----------- ----------- ------------
Restructuring costs - (1.6p) (1.7p)
Exceptional commercial agreement
costs - 0.6p 0.7p
Exchange differences on intra-group
transactions (0.5p) 0.3p (0.7p)
Gain on derivative financial
instruments - (0.1p) (0.1p)
Share-based payment charges 0.8p 0.1p 2.0p
Tax effect of adjusting items (0.1p) 0.2p (0.1p)
-------------------------------------- ----------- ----------- ------------
Diluted earnings per share (adjusted) 4.3p 1.7p 6.2p
-------------------------------------- ----------- ----------- ------------
This reconciliation is provided to enable a better understanding
of the Group's results and is not a primary statement.
Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2011
Six Six Twelve
months months months
ended ended ended
30 June 30 June 31 December
2011 2010 2010
(reviewed,
(reviewed) restated) (audited)
GBP'000 GBP'000 GBP'000
-------------------------------------- ----------- ----------- ------------
Profit for the period 3,023 1,424 3,989
-------------------------------------- ----------- ----------- ------------
Exchange differences on translation
of net investment (245) (65) (391)
Gain/(loss) on cash flow hedges - 74 (87)
Tax relating to components of other
comprehensive income - 242 14
-------------------------------------- ----------- ----------- ------------
Other comprehensive income for the
period (245) 251 (464)
-------------------------------------- ----------- ----------- ------------
Total comprehensive income for the
period 2,778 1,675 3,525
-------------------------------------- ----------- ----------- ------------
Condensed consolidated statement of changes in equity
for the six months ended 30 June 2011
Hedging
and
Share Share Own Other translation Retained
capital premium shares reserves reserves earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- -------- -------- -------- --------- ------------ --------- --------
Balance at 1
January 2011 7,237 23,534 (4,465) 4,014 440 23,516 54,276
---------------- -------- -------- -------- --------- ------------ --------- --------
Profit for the
period - - - - - 3,023 3,023
Exchange
differences on
translation of
net
investment - - - - (245) - (245)
Total
comprehensive
income for the
period - - - - (245) 3,023 2,778
Issue of share
capital 26 188 - - - - 214
Dividends - - - - - (1,062) (1,062)
Deferred tax
benefit on
share option
gains - - - - - 113 113
Credit to
equity for
equity-settled
share-based
payments - - - 520 - - 520
---------------- -------- -------- -------- --------- ------------ --------- --------
Balance at 30
June 2011 7,263 23,722 (4,465) 4,534 195 25,590 56,839
---------------- -------- -------- -------- --------- ------------ --------- --------
Hedging
and
Share Share Own Other translation Retained
capital premium shares reserves reserves earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- -------- -------- -------- --------- ------------ --------- --------
Balance at 1
January 2010 (as
reported in 2010
interim report)
Prior period
adjustment (note 6,351 10,525 (4,465) 3,140 904 20,769 37,224
2) - - - - - (761) (761)
----------------- -------- -------- -------- --------- ------------ --------- --------
Balance at 1
January 2010
(as restated in
2010 annual
report) 6,351 10,525 (4,465) 3,140 904 20,008 36,463
----------------- -------- -------- -------- --------- ------------ --------- --------
Profit for the
period - - - - - 1,424 1,424
Exchange
differences on
translation of
net investment - - - - (65) - (65)
Gains on cash
flow hedges - - - - 74 - 74
Tax on items
taken directly
to equity - - - - 13 - 13
Tax benefit
taken directly
to equity - - - - - 229 229
----------------- -------- -------- -------- --------- ------------ --------- --------
Total
comprehensive
income for the
period - - - - 22 1,653 1,675
----------------- -------- -------- -------- --------- ------------ --------- --------
Dividends - - - - - (928) (928)
Credit to equity
for
equity-settled
share-based
payments - - - 46 - - 46
----------------- -------- -------- -------- --------- ------------ --------- --------
Balance at 30
June 2010
(restated) 6,351 10,525 (4,465) 3,186 926 20,733 37,256
----------------- -------- -------- -------- --------- ------------ --------- --------
Condensed statement of financial position
as at 30 June 2011
As at As at
30 June 31 December
2011 2010
(reviewed) (audited)
GBP'000 GBP'000
------------------------------------- ----------- ------------
Non-current assets
Goodwill 720 720
Other intangible assets 4,048 4,349
Property, plant and equipment 20,800 17,385
Investments 1,261 1,261
Deferred tax asset 996 995
------------------------------------- ----------- ------------
27,825 24,710
------------------------------------- ----------- ------------
Current assets
Inventories 11,438 10,715
Trade and other receivables 7,887 9,301
Current tax asset - 381
Cash and cash equivalents 21,665 23,344
40,990 43,741
------------------------------------- ----------- ------------
Total assets 68,815 68,451
------------------------------------- ----------- ------------
Current liabilities
Trade and other payables (8,301) (10,969)
Other financial liabilities (100) (217)
Current tax liabilities (776) -
Obligations under finance leases (271) (265)
Provisions (770) (797)
------------------------------------- ----------- ------------
(10,218) (12,248)
------------------------------------- ----------- ------------
Net current assets 30,772 31,493
------------------------------------- ----------- ------------
Non-current liabilities
Deferred tax liabilities (693) (695)
Other financial liabilities (331) (361)
Obligations under finance leases (734) (871)
------------------------------------- ----------- ------------
Total non-current liabilities (1,758) (1,927)
------------------------------------- ----------- ------------
Total liabilities (11,976) (14,175)
------------------------------------- ----------- ------------
Net assets 56,839 54,276
------------------------------------- ----------- ------------
Equity
Share capital 7,263 7,237
Share premium 23,722 23,534
Own shares (4,465) (4,465)
Other reserves 4,534 4,014
Hedging and translation reserves 195 440
Retained earnings 25,590 23,516
------------------------------------- ----------- ------------
Equity attributable to shareholders 56,839 54,276
------------------------------------- ----------- ------------
Total equity 56,839 54,276
------------------------------------- ----------- ------------
Condensed consolidated cash flow statement
for the six months ended 30 June 2011
Six Six Twelve
months months months
ended ended ended
30 June 30 June 31 December
2011 2010 2010
(reviewed,
(reviewed) restated) (audited)
Note GBP'000 GBP'000 GBP'000
------------------------------- ----- ----------- ----------- ------------
Net cash from operating
activities 6 4,687 1,004 5,524
------------------------------- ----- ----------- ----------- ------------
Investing activities
Investment income 34 14 42
Purchases of property, plant
and equipment (5,195) (2,843) (6,488)
Proceeds on disposal of
property, plant and
equipment - 1 10
Expenditure on capitalised
product development (220) (48) (359)
------------------------------- ----- ----------- ----------- ------------
Net cash used in investing
activities (5,381) (2,876) (6,795)
------------------------------- ----- ----------- ----------- ------------
Financing activities
Dividends paid (1,062) (928) (1,546)
Loan financing - 1,388 1,389
Proceeds from issue of
ordinary share capital 214 - 15,025
Fees for issue of ordinary
share capital - - (1,130)
Finance costs (30) (81) (80)
Repayments of borrowings (248) (298) (537)
------------------------------- ----- ----------- ----------- ------------
Net cash (used in)/ from
financing activities (1,126) 81 13,121
------------------------------- ----- ----------- ----------- ------------
Net (decrease)/increase in
cash and cash equivalents (1,820) (1,791) 11,850
Effect of foreign exchange
rate changes 141 48 (27)
Cash and cash equivalents at
beginning of period 23,344 11,521 11,521
------------------------------- ----- ----------- ----------- ------------
Cash and cash equivalents at
end of period 21,665 9,778 23,344
------------------------------- ----- ----------- ----------- ------------
Notes to the interim financial information
for the six months ended 30 June 2011
1. Basis of preparation and accounting policies
Basis of preparation
These interim financial statements have been prepared in
accordance with the accounting policies set out in the group's
annual report and accounts 2010 on pages 40 to 45 and were approved
by the board of directors on 18 August 2011. The interim financial
statements for the six months ended 30 June 2011 have been prepared
in accordance with IAS 34 "Interim Financial Reporting" as adopted
by the European Union. The interim financial statements do not
include all the information and disclosures in the annual financial
statements and should be read in conjunction with the group's
annual financial statements as at 31 December 2010.
The financial information in these interim financial statements
does not constitute statutory financial statements as defined in
section 434 of the Companies Act 2006. The group's annual report
for the year ended 31 December 2010 has been delivered to the
Registrar of Companies and the auditor's report on those financial
statements was not qualified and did not contain statements made
under section 498(2) or (3) of the Companies Act 2006.
The interim financial statements are unaudited but have been
reviewed by the auditor Deloitte LLP. The report of the auditor to
the group is set out on page 15.
Significant accounting policies
The accounting policies adopted in the preparation of the
interim condensed consolidated financial statements are consistent
with those followed in the preparation of the group's annual
financial statements for the year ended 31 December 2010.
Risks and uncertainties
An outline of the key risks and uncertainties faced by the group
was outlined in the 2010 financial statements on page 15, including
anticipating technology trends, retaining key staff and
successfully executing business growth initiatives. It is
anticipated that the risk profile will not significantly change for
the remainder of the year. Risk is an inherent part of doing
business and the strong cash position of the group along with the
underlying profitability of the core business leads the directors
to believe that the group is well placed to manage business risks
successfully.
Going concern
The group's forecasts and projections, taking account of
reasonably possible changes in trading performance, support the
conclusion that there is a reasonable expectation that the company
and the group have adequate resources to continue in operational
existence for the foreseeable future. Accordingly, the going
concern basis of preparation has been adopted in preparing the
interim financial statements.
2. Restatement of prior periods
The financial statements for the period 1 January 2010 to 30
June 2010 include a prior period restatement, as also presented in
the 2010 annual report, in relation to the recognition of revenue
from a distributor. In prior periods revenue (and associated
profits) was recognised at the point of receipt of goods by the
distributor. The restated financial statements recognise revenue
(and associated profits) at the point of resale by the distributor
which is when risk and rewards of ownership of inventory has
transferred.
Segment results in note 3 reflect this restatement which only
impacted printheads and related products.
Outlined below are the corrections made for each financial
statement line affected.
CONDENSED CONSOLIDATED INCOME STATEMENT (extracts)
30 June 30 June 30 June
2010 2010 2010
as
reported adjustment restated
GBP'000 GBP'000 GBP'000
-------------------------------------------- --------- ----------- -----------
Revenue 23,863 (43) 23,820
Cost of sales (14,468) 130 (14,338)
Restructuring costs (111) - (111)
-------------------------------------------- --------- ----------- -----------
Gross profit 9,284 87 9,371
-------------------------------------------- --------- ----------- -----------
Operating profit 1,822 87 1,909
-------------------------------------------- --------- ----------- -----------
Profit before tax 1,786 87 1,873
Tax (425) (24) (449)
-------------------------------------------- --------- ----------- -----------
Profit for the period attributable to
shareholders 1,361 63 1,424
-------------------------------------------- --------- ----------- -----------
Earnings per share
Basic 2.2p 2.3p
Diluted 2.1p 2.2p
-------------------------------------------- --------- ----------- -----------
NOTES TO THE CASH FLOW STATEMENT (extracts)
30 June 30 June 30 June
2010 2010 2010
as
reported adjustment restated
GBP'000 GBP'000 GBP'000
Profit before tax 1,786 87 1,873
-------------------------------------------- --------- ----------- -----------
Operating cash flows before movements in
working capital 2,472 87 2,559
-------------------------------------------- --------- ----------- -----------
Increase in inventories (452) (130) (582)
Increase in receivables (1,223) (7) (1,230)
Increase in payables 727 - 727
-------------------------------------------- --------- ----------- -----------
3. Business segments
For management reporting purposes, the group's operations are
currently analysed according to product type. These product groups
are the basis on which the group reports its primary segment
information.
Segment information about these product types is presented
below:
Six Six Twelve
months months months
ended ended ended
30 June 30 June 31 December
2011 2010 2010
(reviewed,
(reviewed) restated) (audited)
GBP'000 GBP'000 GBP'000
--------------------------------- ----------- ----------- ------------
Revenue
Printheads and related products 28,174 20,546 47,237
Development fees 81 126 459
Licence fees and royalties 3,338 3,148 6,982
--------------------------------- ----------- ----------- ------------
Total revenue 31,593 23,820 54,678
--------------------------------- ----------- ----------- ------------
Six Six Twelve
months months months
ended ended ended
30 June 30 June 31 December
2011 2010 2010
(reviewed,
(reviewed) restated) (audited)
GBP'000 GBP'000 GBP'000
------------------------------------ ----------- ----------- ------------
Result
Printheads and related products 94 (861) (1,029)
Development fees - 43 179
Licence fees and royalties 3,338 2,565 5,999
------------------------------------ ----------- ----------- ------------
Total segment result 3,432 1,747 5,149
Net unallocated corporate income 653 162 332
------------------------------------ ----------- ----------- ------------
Operating profit 4,085 1,909 5,481
Investment income 34 14 42
Finance costs (48) (50) (92)
------------------------------------ ----------- ----------- ------------
Profit before tax 4,071 1,873 5,431
Tax (1,048) (449) (1,442)
------------------------------------ ----------- ----------- ------------
Profit for the period attributable
to shareholders 3,023 1,424 3,989
------------------------------------ ----------- ----------- ------------
Unallocated corporate income relates to administrative
activities which cannot be directly attributed to any of the
principal product groups.
Assets in the printheads and related products segment have
increased by GBP1.3m over the period and assets in the licence fees
and royalties segment have increased by GBP0.8m over the period;
there have been no other material movements in segment assets
during the period.
4. Income tax
The major components of income tax expense in the income
statement is as follows:
Six Six Twelve
months months months
ended ended ended
30 June 30 June 31 December
2011 2010 2010
(reviewed,
(reviewed) restated) (audited)
GBP'000 GBP'000 GBP'000
-------------------------------------- ----------- ----------- ------------
Current income tax
Income tax charge 938 49 1,244
Deferred income tax
Relating to origination and reversal
of temporary differences 110 400 198
-------------------------------------- ----------- ----------- ------------
Income tax expense 1,048 449 1,442
-------------------------------------- ----------- ----------- ------------
5. Earnings per ordinary share - basic and diluted
The calculation of basic and diluted earnings per share is based
upon the following data:
Six Six Twelve
months months months
ended ended ended
30 June 30 June 31 December
2011 2010 2010
(reviewed,
(reviewed) restated) (audited)
GBP'000 GBP'000 GBP'000
-------------------------------------- ----------- ----------- ------------
Earnings
Earnings for the purposes of earnings
per share being net profit
attributable to equity holders of
the parent 3,023 1,424 3,989
-------------------------------------- ----------- ----------- ------------
Number of shares
Weighted average number of ordinary
shares for the purposes of basic
earnings per share 70,722,976 61,797,389 63,009,082
Effect of dilutive potential ordinary
shares:
Share options 3,007,608 1,548,756 2,311,031
-------------------------------------- ----------- ----------- ------------
Weighted average number of ordinary
shares for the purposes of diluted
earnings per share 73,730,584 63,346,145 65,320,113
-------------------------------------- ----------- ----------- ------------
6. Notes to the cash flow statement
Six Six Twelve
months months months
ended ended ended
30 June 30 June 31 December
2011 2010 2010
(reviewed,
restated,
(reviewed) note 2) (audited)
GBP'000 GBP'000 GBP'000
-------------------------------------- ----------- ----------- ------------
Profit before tax 4,071 1,873 5,431
Adjustments for:
Share-based payments 520 46 874
Depreciation of property, plant and
equipment 2,230 1,859 3,686
Movements on cash flow hedge
valuations - 47 (39)
Finance costs 48 31 92
Amortisation of intangible assets 521 540 1,119
Investment income (34) - (42)
Foreign exchange gains (585) - (649)
Loss on disposal of property, plant
and equipment - 25 25
Decrease in provisions (27) (1,862) (1,209)
-------------------------------------- ----------- ----------- ------------
Operating cash flows before movements
in working capital 6,744 2,559 9,288
Increase in inventories (626) (582) (3,988)
Decrease/(increase) in receivables 1,407 (1,230) (3,621)
(Decrease)/increase in payables (3,041) 727 5,389
-------------------------------------- ----------- ----------- ------------
Cash generated by operations 4,484 1,474 7,068
Income taxes refunded / (paid) 203 (470) (1,544)
-------------------------------------- ----------- ----------- ------------
Net cash from operating activities 4,687 1,004 5,524
-------------------------------------- ----------- ----------- ------------
Cash and cash equivalents (which are presented as a single class
of asset on the face of the balance sheet) comprise cash at bank
and other short term highly liquid investments with a maturity of
three months or less.
7. Date of approval of interim financial statements
The interim financial statements cover the period 1 January 2011
to 30 June 2011 and were approved by the board on 18 August
2011.
Further copies of the interim financial statements are available
from the company's registered office, 316 Science Park, Cambridge
CB4 0XR, and can be accessed on the Xaar plc website,
www.xaar.com.
Independent review report
for the six months ended 30 June 2011
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2011 which comprises the condensed
consolidated income statement, reconciliation of adjusted financial
measures, condensed consolidated statement of comprehensive income,
condensed consolidated statement of financial position, condensed
consolidated statement of changes in equity, condensed consolidated
cash flow statement and related notes 1 to 7. We have read the
other information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Auditing Practices
Board. Our work has been undertaken so that we might state to the
company those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company, for our review work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Services Authority.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting," as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2011 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
Deloitte LLP
Chartered Accountants and Statutory Auditor
Cambridge
18 August 2011
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PPMTTMBIBBLB
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