Financial highlights
Revenue in 2015 performed in line with expectations, with sales growth in Packaging partially offsetting the anticipated reduction from sales into the ceramic tile market
Strong profitability was achieved in 2015 despite the lower level of sales; gross margin improved to 47.8% (2014: 44.5%) and adjusted operating margin was maintained at 22%
Gross research and development (R&D) investment (before capitalisation of development costs relating to the Thin Film programme) increased by 4% to £19.9 million in 2015 (2014: £19.2 million)
Net cash increased by almost £23 million to £69.7 million (2014: £47.0 million)
Operational and strategic highlights
We have undertaken a strategic review and completed a number of organisational changes to support the achievement of our new vision: to grow annual revenue to £220 million by 2020
We will achieve this vision by:
o capitalising on organic growth opportunities
o continuing to invest in product development
o building partnerships; and
o pursuing carefully selected acquisitions.
R&D programmes delivered on schedule with a number of products launched or announced in 2015 and a strong pipeline for 2016 and beyond
The Xaar Print Bar System launched in September 2015 is proving popular, with deliveries against the first customer orders expected in the next few months
The Thin Film (P4) programme progresses to plan and the Xaar 5601 will launch at drupa, the world's leading trade show for graphic and industrial print, in June 2016
Dividend
As announced in 2014, the Company employs a progressive and sustainable dividend policy which takes into account the Group's future prospects, its underlying profitability and the future cash requirements of the business. The Board will recommend a final dividend of 6.3 pence for 2015 at the forthcoming Annual General Meeting (AGM), giving a total dividend for the year of 9.45 pence, a 5% increase over 2014 (2014: 9 pence). An interim dividend of 3.15 pence was paid during the year (2014: 3 pence). Subject to approval by shareholders at the AGM the final dividend will be paid on 24 June 2016, with an ex-dividend date of 26 May 2016, to shareholders on the register at close of business on 27 May 2016.
Doug Edwards, Chief Executive Officer, commented:
"I have enjoyed my first year at Xaar and I would like to thank all of our staff for their efforts during 2015. We stabilised our financial performance and I am encouraged by the progress we have made to evolve our strategy, create a market and customer focussed culture, and establish our Xaar values of trust, collaboration and drive. Looking ahead, our market leadership and expanding product portfolio position us well for growth, but based on limited visibility, particularly around China, the Board is currently budgeting for 2016 revenue to be broadly similar to 2015.
I am convinced that our long term potential is enormous, but we will only achieve our goals if we truly understand our markets and our customers, keep our commitment to developing world class products and complement our organic growth with partnerships and carefully selected acquisitions.
After 25 years of success in a number of segments, we look forward to the continued progression of our business towards achieving our 2020 vision."
