2020 FULL YEAR RESULTS
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.
27 April 2021
Xaar plc
2020 FULL YEAR RESULTS
STRONG FOUNDATIONS AND CLEAR STRATEGY TO DELIVER LONG-TERM GROWTH
Xaar plc ("Xaar", the "Group" or the "Company"), the leading inkjet printing technology group, today announces its full year results for the 12 months ended 31 December 2020.
Summary of results for the year ended the 31 December 2020:
|
|
2020 |
20193 |
|
Continuing Operations |
|
|
|
Revenue |
£48.0m |
£49.4m |
|
Gross profit |
£13.0m |
£12.3m |
|
Gross margin % |
27% |
25% |
|
Net R&D investment |
£4.5m |
£3.1m |
|
Adjusted EBITDA |
£0.1m |
(£4.9m) |
|
Adjusted loss before tax1 |
(£3.9m) |
(£8.0m) |
|
Loss before tax |
(£4.3m) |
(£10.9m) |
|
Loss for the year |
(£4.4m) |
(£14.4m) |
|
Cash generated by operations |
£8.1m |
£7.6m |
|
Diluted earnings per share |
(5.7p) |
(18.7p) |
|
|
|
|
|
Total Operations |
|
|
|
Loss before tax |
(£14.4m) |
(£71.7m) |
|
Loss for the year |
(£14.7m) |
(£71.7m) |
|
Diluted earnings per share |
(15.2p) |
(92.5p) |
|
Net cash at the year end2 |
£18.1m |
£16.2m |
1 - Excluding the impact of share-based payment charges, exchange differences on intra-group transactions, gain or loss on derivative financial liabilities, restructuring costs, other operating income and discontinued operations as reconciled in note 2
2 - Net cash at 31 December includes cash, cash equivalents and treasury deposits excluding Xaar 3D
3 - Restated results for 2019. See note 7
Financial highlights
· Revenue of £48.0m in line with management expectations
· Gross margin of 27%, increased from 25% in 2019, benefitting from operational leverage in the business
· R&D spend in continuing operations of £4.5m, up £1.4m on 2019 with investment focused on the ImagineX platform and product roadmap
· Positive aEBITDA contributions from Printhead and EPS businesses
· £7.1m net cash inflow from continuing operations
· Strong closing balance sheet with net cash, excluding Xaar 3D, of £18.1m
Strategic and operational highlights
· Implementation of the new strategy continues to deliver positive customer engagement
· Strong performance for the Printhead business with consistent wins of new customers and projects following successful shift in go-to market strategy and focus on markets where products have a competitive advantage
· ImagineX platform successfully launched in September 2020 utilising investment in Thin Film IP, providing clear product roadmap and compelling market opportunity
· Investment in customer service centre in Shenzhen, China, to better service Xaar's largest addressable market
· Relocation of Cambridge offices during 2021 will result in £0.7m full year cost saving
· Xaar Nitrox, the second product offering from our ImagineX platform, is officially launched today
· Engineered Printing Solutions (EPS) impacted by COVID-19, but good progress made and strong order book and pipeline including several new target markets
· Advanced discussions to divest Xaar 3D investment
John Mills, Chief Executive Officer, commented:
"We are pleased with these results as they demonstrate that our strategy is working. We continue to see positive customer engagement and it is particularly gratifying to win new business based on our core technology in existing and new applications. The business is well capitalised and we have a strong order book.
The success we have had throughout the year leaves the business well-positioned and we continue to be excited by the future. We have great technology, great people and our products are market leading. We are well on track with our plan to deliver long-term sustainable growth.
I would also like to thank the team for their hard work throughout the year. In difficult circumstances they continue to deliver on our commitments."
Contacts:
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Xaar plc |
|
|
Ian Tichias, Chief Financial Officer |
+44 (0) 1223 423 663 |
|
John Mills, Chief Executive Officer |
|
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Tulchan Communications |
+44 (0) 207 353 4200 |
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James Macey White Giles Kernick
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A presentation for analysts and investors will be held via webcast and conference call at 09:00 today. For further details, please contact Xaar@tulchangroup.com
Chairman's statement
In what has been a challenging year across global economies, I am pleased to report excellent progress at Xaar. Our challenge has not only been the impact of the COVID-19 pandemic and new ways of working, but also, under new leadership, refocusing the business on our core competencies and developing a strategy for growth exploiting the fundamental strength of our bulk piezo ink jet technology.
A number of changes have been made in the business: a realignment of our go-to-market approach with a clear focus on the value chain and customers, a revitalisation of our brand and corporate identity and, importantly, a focus on the technical and competitive advantages of the Xaar bulk piezo product range with a pipeline of new product developments that we plan to exploit as a part of our new ImagineX platform.
It has been most pleasing to see the energy and enthusiasm of the Xaar team, matched only by the response we have had from customers, with both existing and new OEMs and end-users seeking to deploy Xaar technology in their next generation products.
Our Printhead business has performed very strongly this year. Sales were higher than levels achieved in 2019 and, against the challenging economic backdrop created by the pandemic, our order book has remained consistently strong. We have been particularly pleased with efficiency gains made in our printhead operations, which resulted in both improved gross margins and strong cash generation from more efficient use of working capital. Development of this core platform is a priority for the board in 2021 and beyond.
Our product print business, EPS, based in North America, was impacted by a fall in demand through the worst of the pandemic but, with a small grant from the US government, made only a small loss and remains a valuable contributor to the Group.
Xaar 3D was similarly impacted by COVID-19 restrictions and progress has been slower than expected. Xaar's position in the 3D business is one of technology enabler and our end goal remains one of supplying Xaar printheads for use in 3D applications as opposed to becoming an OEM in the sector. As a result of programme delays in 2020, and following a re-evaluation of the further cash investment required and extended timescales to full commercialisation of the product, we have determined that it is in Xaar's best interests to bring forward the planned sale of Xaar's shares in Xaar 3D. The terms of the proposed revised option arrangement will be published in due course and subject to Xaar shareholder approval.
The past twelve months have seen much change at Xaar. We entered the year with optimism and a renewed sense of purpose but of course had no idea of the extent of challenge we would all face. It is to the great credit of the whole team at Xaar, in all businesses and in the many countries around the world where colleagues live and work, that they have adapted, committed to and succeeded in delivering both solid financial results and a platform for continued growth.
The Board is encouraged by our progress this year and, with the prospect of some return to better market conditions later in 2021, looks forward with confidence.
Andrew Herbert
Chairman
Strategy update
In April 2020 we announced a new strategy across the business and are pleased to say that we continue to make good progress delivering this and we are already seeing real benefits from this new approach. We believe we are on track to return the business to profitability and growth in the medium term.
Printhead
Our strategy for the Printhead business is:
1. A customer-centric business model that places the customer, Original Equipment Manufacturers (OEMs) and User Developer Integrators (UDIs), at the heart of everything we do;
2. A focus on markets where Xaar Bulk Printhead Technology has a competitive advantage;
3. A product roadmap that will develop the Bulk Printhead range to offer advantages over the competition in existing and new markets; and
4. A marketing and communications plan that drives home the advantages of our current products, sells the value and capabilities of the new products on our roadmap, and builds trust in the new business model.
A customer-centric business model
The change in go-to-market strategy which includes removing distribution channels, a clear pricing strategy, and a sales process that is focussed on selling the printhead based on its technical merits and the value of the relationship with Xaar, has already started to reap rewards.
As part of the customer-centric focus we have implemented end-to-end customer journey management to provide an enhanced level of service and support over the entire product lifecycle in order to reduce their development times, and therefore time to market, and to also provide improved aftersales support.
We now have OEMs and UDIs across multiple applications developing machines using a range of our products. We have seen OEM customers return and have also won new accounts including several exciting UDI opportunities. We have a growing pipeline with a significant number of opportunities which we have a good chance of winning, thanks to our technology advantages. This will give us additional opportunities for further vertical integration.
With sales in Asia, and particularly China, growing significantly, up 56% year-on-year, customers re-engaging and our sales pipeline increasing, the Board has decided to invest in a Chinese customer service centre in Shenzhen, which is ideally situated to address a large number of existing and potential customers whilst providing excellent links to other printing hubs in the rest of China. The Chinese market is the largest addressable market in the world for Xaar printheads and represents an important growth opportunity. This new facility will enable us to provide both our existing and potential customers across the region with a higher level of service including enhanced technical support through a demonstration centre, waveform development and RMA facilities. These facilities will enable local support to be provided for all aspects of the customer product lifecycle from printhead selection, through machine development and commercialisation to warranty and RMA support. We expect to be able to start welcoming customers to our new customer service centre in the coming months.
Competitive advantage of our Bulk Printhead Technology
Xaar's Bulk Printhead Technology offers several advantages over the competition including our Through-Flow (TF) Technology ink recirculation, High Laydown Technology and high viscosity capability, which means our printheads can jet the widest range of fluids available making them suitable for a number of applications that other printheads aren't. We have focused on ensuring the benefits are better marketed and understood. Together with our customer-centric business model, this has enabled us to win a significant number of new accounts over the last 12 months whilst building up a strong pipeline of opportunities.
Through a targeted approach, an effective business model and printheads for the right market, we have started to win back market share in the Ceramics sector and have established a strong position in the Glass sector which will enable revenue growth over the coming years. Our position in the Coding and Marking (C&M) and Direct-to-Shape (DTS) sectors remains strong especially in DTS where we have a clear competitive advantage over our competitors due to our TF Technology ink recirculation. In 3D and Advanced Manufacturing, we are well positioned due to our ability to print a wide variety of materials and have an exciting pipeline of opportunities.
Our mix of customers, both OEM and UDI, is growing and now spans a variety of industries from our more traditional sectors such as Ceramics and Labels to opportunities in Aerospace, Automotive, Advanced Manufacturing processes used in Electronics, and Robotics.
Product roadmap and ImagineX platform
In September 2020 we announced the launch of our new printhead platform under the brand name ImagineX. This platform builds upon several technology and development programmes from our legacy Bulk and Thin Film investment. The ImagineX platform will drive the next phase of Xaar's success enabling the business to increase its addressable market whilst establishing market leading products across all sectors.
The ImagineX platform will deliver a number of features over the next few years which will provide significant enhancements to the current portfolio, these include substantially improved speed and throughput (frequencies up to 150kHz, equivalent to a threefold increase in speed), aqueous compatibility, increased throw distance to improve image quality on curved surfaces, increased robustness to improve the life of the printhead and maintain image quality, higher viscosities enabling a broader range of fluids to be printed (above 100cP), and higher resolutions (up to 1440 dpi). These features will help strengthen our position in markets where we are already well represented and will drive improved adoption in several markets where we are currently not, such as Wide Format Graphics, Labels, Packaging and Textiles. The performance enhancements in our product roadmap give a clear path for OEMs to upgrade their products and maintain their product differentiation.
Several features from the ImagineX platform are already available and today we announce the launch of our second product, the Xaar Nitrox. The Xaar Nitrox delivers improved print uniformity and is capable at running at higher frequencies which enable the printhead to increase its speed and productivity by 40%. These enhancements make it ideal for Ceramics, Labels, and Advanced Manufacturing applications.
The first product from the ImagineX platform, the Xaar 2002, was launched in August 2020 following extensive customer feedback and incorporates several technology developments, including high viscosity, high laydown, and AcuChp, as well as an increased ease of integration for the OEM. This product has been well received by the market and is being adopted by both current and new customers alike.
We are engaged with OEM partners on several programs related to our ImagineX platform, with our partners committed to alpha and beta trials. The change to the customer-centric business model is enabling improved Voice of Customer and we are engaged with a wide group of OEMs who are continuing to provide feedback on the roadmap.
Over the longer term Xaar will increasingly vertically integrate in order to provide a more complete printer solution in certain markets, whilst continuing its primary business model of selling printheads to OEMs and UDIs. The additional capabilities required to achieve this will be added through either partnership, development of existing capabilities or acquisition.
Marketing and communications
Twelve months ago, we talked about needing to rebuild the Xaar brand, regain the trust of OEMs, and to make sure the advantages of Xaar technology are well understood. We have made significant progress in addressing these issues, whilst acknowledging there is still more to do.
The combination of communicating the change in strategy and the new product roadmap, followed by a revised mission and vision, and more recently the new brand and launch of the ImagineX platform have helped to shift perceptions of Xaar. Stakeholders are noticeably more engaged and excited by the direction Xaar is taking. This is demonstrated through the positive customer feedback, in addition to the growing number of customers engaging with the business, strong interaction with the press and positive media coverage including at conferences such as Future Print where we officially launched the ImagineX platform to the marketplace.
The level of engagement from previous and established customers indicates we have started to regain their trust. This has been achieved through our efforts to build relationships with them, our desire to listen to their needs and to work with them to find a solution, and through the consistent communications they receive. This has all been reinforced with corporate messaging on our social media platforms. The initial customer response has been encouraging, with the acceptance that we need to consistently listen and deliver on our customer needs to fully rebuild partnerships with them. We are now able to facilitate the end-to-end customer journey management, utilising marketing cloud for better campaigns and lead generation. We have also been successful in our conversion of these leads.
The launch of the Xaar 2002 printhead gave us the opportunity to demonstrate the advantages of Xaar's technology and discuss with customers our product roadmap. The launch of the ImagineX platform in September has helped reinforce the perception that Xaar's bulk technology adds real value today and has an exciting future. With ImagineX, customers can now see us a potential partner not only for their current generation of products but also for future development programmes. The closer relationships we now have with our customers has the added benefit of enabling better Voice of the Customer (VOC) which in turn allows us to fine tune our product roadmap and helps place us front and centre for the customers' next generation of products.
With the launch of the Xaar Nitrox we are also introducing a new naming convention to link into our new ImagineX platform and reflect our new brand identity. A significant amount of work is going into this product launch which will be the first of several in the coming 24 months.
To see the new Xaar brand identity and the ImagineX platform visit www.xaar.com .
Operational Gearing
Substantial progress has been made in reducing the cost base of the Printhead business in recent years to reduce not only variable costs but also removing, or reducing, fixed costs where possible. These efforts had been obscured by the rate at which revenue declined, and subsequently we hadn't previously seen the expected positive impact on gross margins and ultimately the profitability of the business. With revenues increasing in 2020 we now see the benefit of these measures as sales and factory throughput have both increased and we can leverage the high operational gearing in the factory and wider business. This is reflected in the gross margin from continuing operations improvement, up 5% year-on-year to 27%. A combination of operational gearing and the reduction in the SG&A costs have seen adjusted EBITDA improve £5.4m year-on-year to £0.0m.
As the business continues to grow, we will be able to further leverage our high operational gearing with modest investment to support additional sales from the existing product portfolio or new products released from the ImagineX platform.
Beyond the factory we continue to review our cost base. Xaar's offices on the Cambridge Science Park are over 25 years old and require investment to bring them up to a more modern, appropriate standard. Furthermore, with the reduction in workforce over the last few years there is significant excess capacity. The move to homeworking caused by COVID-19 has been successful and has proven that flexible working can be effective for large parts of the workforce. Following a comprehensive review, a decision has been taken to relocate from the Cambridge Science Park to the nearby Cambridge Research Park. This move will allow the business to relocate to smaller premises offering a more modern and vibrant workplace for employees and guests. Significantly the move will also generate savings of £0.7m per annum from the start of the second half of 2021.
EPS
Our strategy for the EPS business is centred on three principles:
1. Focussed business development aimed at utilising existing technologies to expand into adjacent markets;
2. Increased scalability through the standardisation of modular components whilst retaining the ability to meet each customers' unique requirements through customised fixtures and tooling; and
3. Improved controls over pricing and costs.
We have continued to build upon the good progress made in the first half of the year. Despite the impact of COVID-19 continuing to impact our team's ability to travel we have been able to deliver improvements on our focussed business development. This is reflected in the strong order book and pipeline at the start of 2021 which contains opportunities from several new target markets.
Our engineering teams have worked hard on delivering standardised modular systems and we continue to see orders won using this philosophy. This is significant in that it will not only reduce design costs, and improve product margins, but will also reduce the lead-time for the customer. Combined with improvements in the quotation process, and cost control, we expect to see the real benefit of this in 2021 through increases in gross margins and a faster turnover of machines on the shopfloor.
These developments aren't truly reflected in the full year performance where the rise in gross margin from the change in strategy, and related processes, are offset by the write off and provisioning of slow-moving legacy inventory and the reduction in revenue in the second half of 2020.
Additional work has been identified to take place in 2021 to remediate internal management and reporting controls to enable delivery of improved operational processes in support of revenue recognition, margin and inventory management.
3D
Xaar's position in the 3D business is one of technology enabler and our end goal has been, and remains to, supply printheads for use in 3D applications and not become an OEM in the sector. That was the rationale behind our joint venture agreement with Stratasys, a recognised leader in 3D with a proven track record and strong routes to market, and the subsequent option agreement signed with Stratasys.
Alongside its investment in 3D, the Xaar board has redefined its core business strategy during 2020 with a strong focus on the development of its bulk piezo printhead business. We have a programme of investment in technology and new products and, with a revised commercial model, we have been successful in both reengaging with OEM partners and developing new customer opportunities. Our key focus today is on building upon this core competency, increasing our capabilities in deploying bulk piezo printheads among chosen OEMs and UDIs, and prioritising investment to ensure we develop and sustain competitive advantage as we see increasing demand for our unique technology solutions. We enter 2021 with a range of further investment opportunities in both technology through internal R&D capability and capacity through the potential for acquisition of complementary technology, skills and expertise.
Whilst Xaar 3D has continued to make progress this year it has been impacted by the COVID-19 pandemic. This has affected the programme most significantly in two areas. Firstly, due to restrictions put in place in Denmark, the number of people able to access the Copenhagen facility has been limited. These limitations have restricted both the test capacity and the speed at which testing can take place. Secondly, travel restrictions have prevented the team from travelling and has meant face to face time with the sub-contract manufacturer has also been limited and has affected the original timeline of the Alpha and Beta program. As a direct consequence of these delays we anticipate Xaar 3D would require further investment in 2021 (cash decreased in 2020 by £7.0m to £2.1m), significantly more than original plans anticipated.
As a result of the delays in the programme and the further investment anticipated, the Xaar Board has considered all options for the future financing and ownership structure of Xaar 3D, and accordingly has held detailed discussions to sell the remaining stake in Xaar 3D. Terms are still to be finalised and may potentially differ to those of the Call Option originally agreed in 2019. The Directors have assessed that the disposal is highly probable and therefore Xaar 3D is classified as a discontinued operation.
The terms of any final agreement will be subject to Xaar shareholder approval.
Such an arrangement would provide Xaar 3D with the best opportunity to complete the commercialisation of the HSS product range in the shortest time, would lead to an immediate injection of cash and will enable Xaar to focus on its core business.
COVID-19
Following the outbreak earlier in the year we took measures across the Group to ensure the health and wellbeing of all our employees. The business has adapted incredibly well to these challenges with much of the organisation operating effectively from remote locations. In addition, changes at our manufacturing facilities have meant that we have been able to continue production without compromising the health and safety of our employees or our production capabilities.
The Xaar Printhead business has a significant customer base in both China and EMEA, including a strong customer presence in both Italy and Spain. Despite COVID-19 lockdowns in these geographies, which resulted in a number of short term production stops at our customers facilities and limited our ability to visit, we have continued to support and engage with them and have seen sales into both Asia and EMEA increase since the second half of 2019. Our teams have worked hard to maintain our supply chain and production capabilities in meeting the requirements of this increased demand. Our ability to ensure the continuity of supply has been well received by our customers and has helped us secure several orders versus the competition.
Our US-based EPS business has continued to operate throughout the period with little interruption to its manufacturing operations. As an OEM and supplier to end users the EPS business has felt the impact of a slowdown in the economy more directly than the Printhead business. Full year sales from Pad Printing machines and consumables were affected throughout the second half of the year as end user markets continued to be impacted by the pandemic. The EPS business has taken advantage of the Paycheck Protection Program (PPP) established by the 2020 US Federal government Coronavirus Aid, Relief, and Economic Security Act (CARES Act). As part of the PPP EPS has taken out a loan of $1.0m which under certain conditions can be waived. The company meets the criteria for the loan to be waived and has recognised it as income and reported it as a government grant. EPS is well positioned to take advantage of any upturn and has continued to secure orders for use of its products in various sectors despite the limitations arising from the pandemic. Furthermore, it has been able establish both a strong pipeline and strong order book as customers start to plan for their capital investments again.
The 3D business unit has operations in Nottingham, UK, and Copenhagen, Denmark and has seen delays in the testing and commercialisation of the 3D printers. These were caused by minor delays in the supply chain and more significantly by restrictions in Denmark which limited the number of individuals who were allowed in the Copenhagen facility, restricting testing capacity, and the ability to travel and resolve issues face to face with the sub-contract manufacturer.
Both our Printhead business and EPS were well positioned prior to the pandemic with strong order books. We believe we are well positioned to continue to support our customers and suppliers, and our strong cash and balance sheet position provides confidence that we are well placed. We believe we are well positioned to take advantage of any economic upturn as pandemic restrictions recede.
Operating sustainably
Xaar strongly believes that corporate responsibility is integral to business success. We uphold the highest of standards across our business and comply with all relevant regulations in the territories in which we operate whilst enhancing the working environment for our employees and minimising the environmental impact of our products.
We have offset all of the UK regulatory Scope 1 & 2 carbon impact that we made and reported in 2020. Based on our carbon footprint reported in 2020 this makes Xaar a carbon neutral inkjet manufacturer.
We still need to understand the full impact from our operations and are committed to continue reducing the impact on the environment and maintaining our drive to achieve complete carbon neutrality in line with the UK's 2030 goal.
In August 2020 we introduced new packaging across our printhead portfolio and now all Xaar's printheads are shipped in fully recyclable and biodegradable cardboard packs with the aim of reducing our plastic consumption by 1.2 tonnes per year.
In addition, we have moved electricity supply for our Printhead business to a green energy supply, supplementing measures we are already taking to improve energy efficiency.
We have also started a project to review our Carbon footprint and the measures we take to limit this. The results of this review including definition of appropriate KPIs will be announced later in the year.
In support of our local community, we have started a program of work to establish apprenticeship and graduate schemes which we expect to roll out over the next 12 months. This is aligned with our sponsorship of local clubs around Huntingdon and Cambridge in the UK to drive interest in STEM subjects among school students.
Our priority during the COVID-19 period has been to ensure the health and wellbeing of our employees. Beyond this we have supported our local community by donating PPE to the Addenbrookes NHS trust and manufacturing 3D printed headbands for protective masks.
We have put in place on-site COVID-19 testing facilities to test all staff on-site on a twice weekly basis.
Brexit
The Group operates globally and the impact following the transition phase of Brexit continues to be monitored. We have taken action where necessary in moving to freight carriers to ensure smooth customs clearance and to date have experienced little impact. We will continue to evaluate all transport methods and ensure we meet any increased burden of audit trail compliance. As for many businesses, a greater challenge is potentially that of EU workers and migration. As a result of Brexit, the Group is exposed to potential currency fluctuations.
Brexit and trade barriers continue to be an integral part of the Group's ongoing risk management and review process, for which solutions to address the risks identified are explored and implemented. We continue to believe that the direct consequences of Brexit will have no material impact on the Group.
Outlook and summary
We are very pleased with the performance of the business in 2020. Given the difficult trading environment and the wider economic impact of the COVID-19 pandemic, the results are positive. There is significant work still required to increase customer trust and capitalise on the many market opportunities, and the ongoing pandemic makes it difficult to provide reliable guidance on the outlook for 2021 and beyond. That said, the short-term outlook remains good with a strong order book across the business, and the continued strength of the Group's balance sheet and cash position leave it well placed to withstand further volatility in the market. Implementing the new strategy is already proving successful and we believe this will continue. The foundations that are being laid at present will provide a springboard for future growth and a return to profitability in the medium term.
Business Performance
Due to the discussions to divest the remaining shares in Xaar 3D, the business will be classified as an asset held for sale as at the 31 December 2020 and the business will no longer be classified as a continuing operation. Xaar's Continuing Operations, therefore, consist of the Printhead and EPS businesses.
Continuing Operations
Revenue for the Group of £48.0m was in line with management's expectations and whilst this represents a year-on-year decline of £1.4m (2019: £49.4m) it is a very pleasing result given the decline in Printhead sales in the second half of 2019 and the impact COVID-19 has had on the EPS business. Group Revenue increased from £23.7m in the first half of the year to £24.3m in the second half driven by a £1.7m increase in revenue from the Printhead business.
|
£M |
2020 H1 |
2020 H2 |
FY 2020 |
FY 2019 |
||||||||
|
PH |
EPS |
Total |
PH |
EPS |
Total |
PH |
EPS |
Total |
PH |
EPS |
Total |
|
|
Americas |
3.9 |
6.9 |
10.8 |
3.7 |
5.8 |
9.5 |
7.6 |
12.7 |
20.3 |
8.2 |
15.7 |
23.9 |
|
Asia |
4.5 |
- |
4.5 |
5.1 |
- |
5.1 |
9.6 |
- |
9.6 |
7.0 |
- |
7.0 |
|
EMEA |
8.4 |
- |
8.4 |
9.7 |
- |
9.7 |
18.1 |
- |
18.1 |
18.5 |
- |
18.5 |
|
Total |
16.8 |
6.9 |
23.7 |
18.5 |
5.8 |
24.3 |
35.3 |
12.7 |
48.0 |
33.7 |
15.7 |
49.4 |
Revenue from the Americas fell year-on-year across the Group, down £3.6m (2020: £20.3m, 2019: £23.9m), and also fell £1.3m half-on-half. Printhead revenue declined by £0.6m to £7.6m whilst also decreasing £0.2m half-on-half. Modest growth year-on-year in the 3D Printing and Advanced Manufacturing (AVM) sector was offset by declines in both the Coding & Marking (C&M) and Direct-to-Shape (DTS) sector and the Wide Format Graphics (WFG) and Labels sector. Revenue from the EPS business fell £3.0m in 2020 to £12.7m and declined by £1.1m in the second half of the year.
Performance in Asia, and China in particular, has been very successful in 2020. Revenue grew £1.0m in the first half of the year to £4.5m (H2 2019: £3.5m) and continued to grow in the second half to £5.1m. This growth has largely been driven by the re-engagement of Chinese Ceramic customers who began to adopt the Xaar 2001 and have now transitioned to the newly launched Xaar 2002 for their new printer builds. Year-on-year revenues have increased from £7.0m to £9.6m, a 37% increase. This is a real proof point for the change in strategy, the removal of distribution channels, the implementation of a clear pricing strategy, and more significantly a change in how we interact and support our customers have all helped with the speed of adoption of the Xaar 2002 in China.
Whilst revenue in EMEA was down year-on-year, £18.1m compared to £18.5m, we have seen a promising upward trend in revenue since H2 2019. Revenue in the first half of the year increased £1.0m compared to the previous half to £8.4m (H2 2019: £7.4m) and then increased £1.3m in the second half to £9.7m. Increases in H1 were driven by the Ceramic sector which stayed flat in H2 whilst increases in H2 were driven by the C&M and Labels sectors.
Printhead revenue increased £1.6m to £35.3m (2019: £33.7m) as we saw revenue increase half-on-half throughout the year. H1 revenue of £16.8m was up £2.0m relative to H2 2019 (£14.8m) with revenues in H2 rising another £1.7m to £18.5m. Having hit a low of £4.4m in H2 2019 the Ceramics & Glass sector has increased half-on-half throughout 2020 to £6.1m in H1 and £7.7m in H2. Full year revenues are up 13% at £13.8m (2019: £12.2). Winning back market share with the launch of the Xaar 2002 in the Chinese Ceramics market, and to a lesser extent EMEA has been a significant driver. We also established a marketing leading position in Glass with the Xaar 2002 and won several accounts in the Glass sector in 2020, with revenue in H2 2020 increasing 144% compared to H2 2019.
The C&M and DTS sector declined 3% year-on-year (2020: £11.5m. 2019: £11.9m). Whilst C&M has remained largely flat year-on-year, DTS declined 16% with the majority of the decline taking place in the Americas. With DTS still in its relative infancy, revenue from this sector remains volatile and largely driven by new machines from customers switching their production lines over to a digital solution. We remain confident in our ability to drive the adoption of digital solutions in this sector in the long run. Our current product portfolio, and the ImagineX product roadmap, make the C&M and DTS sector an area for potential growth in the long term.
WFG and Labels revenue was up 13% at £6.3m (2019: £5.6m). As with the Ceramics and Glass sector we have seen improvements half-on-half throughout 2020 with growth in H1 (H1 2020: £2.9m, H2 2019: £2.8m) driven by WFG and growth in the second half (H2 2020: £3.4m) driven by Labels.
3D Printing and AVM have stayed relatively flat year-on-year (2020: £2.5m, 2019: 2.6m) with gains in 3D printing offset by a reduction in revenues from AVM. Similar to DTS, the AVM market for Printheads is still relatively small but growing, and revenues can vary year-on-year depending on the number of production lines, or production processes, that are switched over to digital printing. Both 3D Printing and AVM are markets where we are well positioned to take advantage of growth opportunities, but development cycles can be long, therefore, it can take a number of years for a customer to reach full production and ultimately significant demand for printheads.
Revenues from Packing and Textiles remain modest. Our ability to target this sector effectively is somewhat limited by our current product range. However, advancements in the product portfolio driven by the ImagineX platform should make this large sector more accessible in the future. Full year revenue of £0.9m was flat year-on-year.
Royalties from the single remaining licensee declined 42% (2020: £0.4m, 2019: £0.6m) which is in line with the declining royalty rate. This royalty rate will decline again in both 2021 and 2022 before ceasing altogether thereafter.
|
M |
2020 H1 |
2020 H2 |
FY 2020 |
FY 2019 |
Var |
Var % |
|
Ceramics & Glass |
6.1 |
7.7 |
13.8 |
12.2 |
1.6 |
13% |
|
C&M & DTS |
6.0 |
5.5 |
11.5 |
11.9 |
(0.4) |
(3%) |
|
WFG & Labels |
2.9 |
3.4 |
6.3 |
5.6 |
0.6 |
13% |
|
3D Printing & AVM |
1.3 |
1.1 |
2.5 |
2.6 |
(0.1) |
(5%) |
|
Packaging & Textile |
0.4 |
0.5 |
0.9 |
0.9 |
0.0 |
1% |
|
Royalties |
0.2 |
0.2 |
0.4 |
0.6 |
(0.3) |
(42%) |
|
Total |
16.8 |
18.5 |
35.3 |
33.7 |
1.6 |
5% |
Revenue from the EPS business declined by £3.0m to £12.7m (2019: £15.7m) as COVID-19 impacted on a number of markets addressed by their Pad Printing machines and consumables; Ad Speciality and Promotional Products were hit particularly hard. Whilst the first half was helped by a strong order book, particularly on the digital Inkjet side, we saw a decline in sales in the second half from both Pad Printing and digital Inkjet as companies held off making large capital commitments, and demand for consumables, which declined significantly in Q2, only partially recovered. Despite this we have been able to strengthen the pipeline and order book and are well placed to return to growth in H1 2021 as companies start to invest in capital equipment again and those markets effected by the pandemic, such as Ad Speciality and Promotional Products, start to rebound.
|
M |
2020 H1 |
2020 H2 |
FY 2020 |
FY 2019 |
Var |
Var % |
|
Digital Inkjet |
4.0 |
3.2 |
7.2 |
6.8 |
0.4 |
7% |
|
Pad Printing |
2.7 |
2.4 |
5.1 |
8.1 |
(3.0) |
(37%) |
|
Other |
0.2 |
0.2 |
0.4 |
0.8 |
(0.4) |
(49%) |
|
Total |
6.9 |
5.8 |
12.7 |
15.7 |
(3.0) |
(19%) |
Gross Profit for the year increased by £0.7m to £13.0m (2019: £12.3m) driven by an increase in the gross margin to 27% (2019: 25%). This was the result of an improvement in the Printhead business unit's gross margin from 22% in 2019 to 27% in 2020. 2019 was characterised by an underutilisation of the factory as throughput was lowered or cut in order to reduce inventory which had reached excessive levels on several product lines. In 2020, whilst we continued to improve our working capital position, and reduced inventory by another £4.5m (2019: £6.1m reduction in inventory), the higher level of demand, and the fact finished goods inventory is now at sustainable levels, meant the factory output went up year-on-year. With inventories of finished goods now at sustainable levels the Printhead business is well placed to take advantage of increased demand and utilise its high level of operational gearing to deliver further improvements in the gross margin. Gross profit for the EPS business declined £1.2m in the year to £3.4m (2019: £4.6m). Whilst gross margins were down year-on-year (2020: 27%, 2019: 30%) the fall in gross profit is largely attributable to the decline in revenue which was down £3.0m year-on-year. The gross margins for EPS were negatively impacted in the second half by a 22% decline in machine sales as companies focused on maintaining their cash position and put planned capital investment on hold. The gross margins were further impacted by inventory provisions of £0.6m related to legacy products. Excluding these one-off provisions, gross margins were 31%, up 1% on 2019 despite the lower revenue.
R&D spend of £4.5m was up £1.4m on 2019 (2019: £3.1m). This reflects the investment in the ImagineX platform which will be central to our long-term growth.
Sales and marketing spend for the year was £6.0m (2019: £8.1m). The decline in spend of £2.1m year-on-year largely relates to cost savings in the Printhead business unit following the restructuring of the business in the second half of 2019. Further savings were seen in both the Printhead and EPS businesses due to COVID-19 which limited our ability to visit customers and led to the cancellation of the majority of tradeshows which one, or both, businesses would have attended.
General and administrative expenses increased £0.3m from £7.7m in 2019 to £8.0m in 2020.
Impairment reversal on financial assets were £0.9m (2019: £2.7m loss). This reversal predominantly relates to a distribution channel used by the Printhead business and the collection of a customer debt previously provided for.
Other operating income in the period of £0.8m relates the US Government's COVID-19 support and the Paycheck Protection Program (PPP) loan taken out by the EPS business which is expected to be forgiven in the first half of 2021, having met all qualifying criteria during 2020.
Restructuring costs of £0.8m predominantly relate to the final costs in liquidating the legacy Swedish entities and provisions for the dilapidation and exit of the office on the Cambridge Science Park.
The adjusted EBITDA for continuing operations in the year was a £0.1m profit (2019: £4.9m loss).
The adjusted loss before tax from continuing operations was £3.9m, compared to £8.0m loss in 2019. The performance of the Printhead business improved £4.6m from a £8.0m loss in 2019 to a £3.4m loss in 2020 driven by increased sales, a much improved gross margin, and a reduction in operating expenditure despite increased R&D investment. The EPS business went from a £0.1m profit in 2019 to a £0.5m loss in 2020 due to the impact of COVID-19 on revenue, and the write off and provisioning of legacy inventory.
The loss before tax under IFRS was £4.3m (2019: £10.9m), £0.4m higher than adjusted loss before tax. Restructuring costs of £0.8m, foreign exchange losses on intra-group loans of £0.3m and share based payments of £0.3m were partially offset by other operating income £0.8m and an R&D expenditure credit of £0.1m. Loss per share from continuing operations was 5.7p (2019: Loss 18.7p).
Discontinued Operations
A £10.3m loss was recorded in relation to Discontinued operations (2019: £57.3m) with cash outflows for the period of £12.1m (2019: £17.2m). The Thin Film business, which was classified as discontinued in 2019, recorded a loss of £3.7m which primarily relates to inventory commitments and supplier liabilities. All liabilities in respect of the Thin Film business have now been settled. As a result of the intended sale of Xaar 3D, which is assessed as highly probable, that business has been classified as a discontinued operation held for sale. Xaar 3D recorded a loss of £6.4m in 2020 (2019: £1.2m loss). The increased level of losses in the business primarily relate to R&D expenses recognised in the period which increased by £4.5m when compared to 2019 with gross R&D expenditure increasing by £1.8m. In 2019 much of the gross R&D spend was treated as capitalised development. This accounting treatment ceased at the end of November 2019 and the amortisation of capitalised R&D commenced in December 2019. The year-on-year change in the net capitalisation/amortisation of R&D was £2.7m.
Loss for the year
The total loss for the Group was £14.7m (2019: £71.7m) and the loss per share 15.2p (2019: Loss 92.5p).
The net cash position remains strong with continuing operations generating £7.1m of cash
The Group's continuing operations continue to generate cash with a net increase of £7.1m for the year (2019: £8.4m on a like-for-like basis and £14.8m total). Due to cash out flow on discontinued operations, total net cash declined in the year £5.1m (2019 £2.6m), as follows:-
|
Movement in net cash* (including 3D) |
2020 £'000 |
2019 £'000 |
|
Cash & Treasury Deposits - Continuing Operations |
18,117 |
16,177 |
|
Cash & Treasury Deposits - 3D operations |
2,120 |
9,145 |
|
Cash & Treasury Deposits at end of year |
20,237 |
25,322 |
|
Cash & Treasury Deposits at the beginning of the year |
25,322 |
27,946 |
|
Total Net Cash Outflow |
(5,085) |
(2,624) |
|
Effect of foreign exchange rate changes on cash balances |
57 |
211 |
|
Decrease in net cash for the Group |
(5,028) |
(2,413) |
|
|
|
|
|
Consisting of: |
|
|
|
Total Cash inflow from Continuing Operations |
7,073 |
8,405 |
|
|
|
|
|
Cash outflow from Xaar 3D Business |
(7,018) |
(4,852) |
|
|
|
|
|
Xaar 3D - Proceeds from share capital and share sale |
- |
12,002 |
|
|
|
|
|
Cash Outflow from Thin Film Operation |
(5,083) |
(17,968) |
|
|
|
|
|
Decrease in net cash for the Group |
(5,028) |
(2,413) |
*Net cash is defined as cash and cash equivalents, plus treasury deposits
Operating cash flows before movements in working capital for the continuing operations improved from an outflow of £4.9m to an inflow of £1.4m. This was largely due to the improvements in the adjusted EBITDA (2020: £0.1m, 2019: loss £4.9m) and reduced expenditure on restructuring following the extensive restructuring of the business in the final part of 2019 (2020: £0.8m, 2019: £1.5m). Operating cash flows were further helped by £0.8m of US government grants.
As part of the Group's strong cash focus working capital remains a key area. Driven primarily by a £5.1m reduction in inventory, £6.7m of cash was released from working capital to give cash generated by operations of £8.1m (2019: £7.6m). Factoring in tax receipts of £0.3m (RDEC related), and expenditure on property, plant and equipment (PPE), intangible assets and lease liabilities continuing operations generated £7.1m of cash (2019: £8.4m). Whilst down year-on-year, 2019 performance was assisted by £2.6m of income taxes received (£1.6m of RDEC and a net inflow of £1.0m corporation tax) and movement in working capital of £12.6m as the business tried to address the significant excess inventory position at the end of 2018 and the large receivables position with a number of distributors.
|
Cash Inflow from Continuing Operations (excluding 3D) |
2020 £'000 |
2019 £'000 |
|
aEBITDA |
62 |
(4,857) |
|
Restructuring |
(754) |
(1,518) |
|
Depreciation of right of use assets |
1,107 |
962 |
|
Government Grant (PPP Loan) |
819 |
- |
|
Other |
144 |
473 |
|
Operating cash flows before movements in working capital |
1,378 |
(4,940) |
|
Movement in working capital |
6,735 |
12,574 |
|
Cash generated by operations |
8,113 |
7,634 |
|
Income taxes received |
351 |
2,618 |
|
Net cash used in investing & other financing activities |
(1,391) |
(1,847) |
|
Net increase in cash and cash equivalents from Continuing Operations |
7,073 |
8,405 |
|
Proceeds from the sale of shares in Xaar 3D |
- |
6,372 |
|
Total Cash inflow from Continuing Operations |
7,073 |
14,777 |
Discontinued operations consumed cash of £12.1m (2019: £17.2m). The cash outflow from Thin Film operations was £5.1m (2019: £18.0m). This was driven primarily by supplier liabilities and the build out of inventory for a small number of customers. With all liabilities now settled and inventory in place, cash flows in future years will be minimal.
Cash outflows from the 3D business excluding share issues increased from £4.9m in 2019 to £7.0m in 2020. The increase represents the accelerated investment in R&D and go to market functions prior to the commercialisation of the 3D printers. In 2019 the investment was offset by £5.6m from the issue of ordinary share capital which was not repeated in 2020.
Excluding cash from the 3D business, which is now held for sale, net cash increased from £16.2m in 2019 to £18.1m in 2020 despite the need to settle the final Thin Film liabilities.
Strong balance sheet
Non-current assets declined £10.8m in the year from £35.5m to £24.7m. This was driven by a reclassification of 3D assets to current assets held for sale (2020: £6.1m, 2019: £6.7m), £1.0m depreciation of right of use assets, and a £2.8m reduction in PPE and intangible assets as new purchases were controlled in with line with the Group's cash focus.
Current assets, excluding the disposal group assets held for sale, declined £13.9m from £52.7m in 2019 to £38.8m. A significant proportion of this decline is attributable to the reclassification of the 3D business to an asset group held for sale with £4.0m of current assets at the end of 2020 being reclassified. The remaining £4.4m decline is primarily as a result of the £5.7m reduction in inventory across the Printhead and EPS businesses (2020: £10.4m, 2019: £16.1m), a £1.4m reduction in current tax assets to £0.4m (2019: £1.8m), a £0.8m increase in trade debtors and other receivables, and £1.9m of cash generated by the rest of the business.
The 3D business has been classified as held for sale with £10.2m of assets reclassified as at the end of 2020.
Current liabilities, excluding liabilities associated with Xaar 3D (held for sale), increased by £0.5m. Excluding £0.9m of 3D liabilities at the end of 2019 current liabilities increased £0.4m. Provisions, which at the end of 2019 primarily related to the Thin Film operation, declined by £2.5m to £0.4m (2019: £2.9m). Lease liabilities decreased from £1.3m to £1.1m primarily as a result of the decision to relocate from the Cambridge Science Park to the nearby Cambridge Research Park. These declines were offset by an increase in trade and other payables in relation to the Printhead and EPS businesses of £2.6m (2020: £9.9m, 2019: £7.3m), these increases were primarily driven by increased supplier liabilities and bonus accruals within the Printhead business.
Non-current liabilities, which all relate to lease liabilities recorded under IFRS 16, decreased £1.0m in the year.
Dividend
No dividend has been declared for 2020. The Board recognises the importance of regular income to many investors but believes that it would be inappropriate to reinstate payment of dividends before sustainable profits are restored.
|
John Mills |
Ian Tichias |
|
|
Chief Executive Officer |
Chief Financial Officer |
|
|
|
|
|
|
CONSOLIDATED INCOME STATEMENT |
|||
|
FOR THE YEAR ENDED 31 DECEMBER 2020 |
|
|
|
|
|
|
2020 |
Restated 2019 |
|
|
Notes |
£'000 |
£'000 |
|
Revenue |
3 |
47,984 |
49,379 |
|
Cost of sales |
|
(34,974) |
(37,089) |
|
Gross profit |
|
13,010 |
12,290 |
|
Research and development expenses |
|
(4,535) |
(3,081) |
|
Research and development expenditure credit |
|
142 |
29 |
|
Sales and Marketing expenses |
|
(5,970) |
(8,104) |
|
General and administrative expenses |
|
(8,022) |
(7,718) |
|
Impairment reversal / (losses) of financial assets |
|
946 |
(2,715) |
|
Restructuring costs |
2 |
(754) |
(1,519) |
|
Other operating income (exceptional) |
2 |
819 |
- |
|
Gain/(loss) on derivative financial liabilities |
|
77 |
(87) |
|
Operating loss |
|
(4,287) |
(10,905) |
|
Investment income |
|
47 |
65 |
|
Finance costs for leases |
|
(82) |
(97) |
|
Loss before tax |
|
(4,322) |
(10,937) |
|
Income tax expense |
|
(52) |
(3,497) |
|
Loss for the period from continuing operations |
|
(4,374) |
(14,434) |
|
Loss from discontinued operations after tax |
6 |
(10,295) |
(57,297) |
|
Loss for the period |
|
(14,669) |
(71,731) |
|
|
|
|
|
|
Attributable to: |
|
|
|
|
Owners of the Company |
|
(11,685) |
(71,308) |
|
Non-controlling interests |
|
(2,984) |
(423) |
|
Loss for the period |
|
(14,669) |
(71,731) |
|
|
|
|
|
|
Earnings/(loss) per share - Total |
|
|
|
|
Basic |
4 |
(15.2p) |
(92.5p) |
|
Diluted |
4 |
(15.2p) |
(92.5p) |
|
|
|
|
|
|
Earnings/(loss) per share - Continuing operations |
|
|
|
|
Basic |
4 |
(5.7p) |
(18.7p) |
|
Diluted |
4 |
(5.7p) |
(18.7p) |
No dividends were paid in the current or prior year.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
|
FOR THE YEAR ENDED 31 DECEMBER 2020 |
|
|
|
||
|
|
|
2020 |
Restated 2019 |
|
|
|
|
|
£'000 |
£'000 |
|
|
|
Loss for the year |
|
(14,669) |
(71,731) |
|
|
|
Items that may be reclassified subsequently to profit or loss: |
|
||||
|
Exchange differences on translation of net investment |
|
240 |
(258) |
|
|
|
Tax on items taken directly to equity |
|
(5) |
- |
|
|
|
Other comprehensive income/(loss) for the year |
|
235 |
(258) |
|
|
|
Total comprehensive loss for the year |
|
(14,434) |
(71,989) |
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss attributable to: |
|
|
|
|
|
|
Owners of the Company |
|
(11,466) |
(71,531) |
|
|
|
Non-controlling interests |
|
(2,968) |
(458) |
|
|
|
|
|
(14,434) |
(71,989) |
|
|
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION |
|
|
|
|
AS AT 31 DECEMBER 2020 |
|
|
|
|
|
2020 |
Restated 2019 |
|
|
|
'000 |
'000 |
|
|
Non-current assets |
|
|
|
|
Goodwill |
5,152 |
5,333 |
|
|
Other intangible assets |
207 |
5,543 |
|
|
Property, plant and equipment |
17,147 |
20,908 |
|
|
Right of use asset |
2,078 |
3,561 |
|
|
Deferred tax asset |
139 |
130 |
|
|
|
24,723 |
35,475 |
|
|
Current assets |
|
|
|
|
Inventories |
10,355 |
16,530 |
|
|
Trade and other receivables |
9,751 |
9,109 |
|
|
Current tax asset |
425 |
1,788 |
|
|
Treasury deposits |
161 |
522 |
|
|
Cash and cash equivalents |
17,956 |
24,800 |
|
|
Derivative Financial Instruments |
160 |
- |
|
|
Assets held for sale |
43 |
- |
|
|
|
38,851 |
52,749 |
|
|
Disposal Group Assets held for sale |
9,968 |
- |
|
|
|
48,819 |
52,749 |
|
|
Total assets |
73,542 |
88,224 |
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
(9,940) |
(7,973) |
|
|
Provisions |
(357) |
(2,947) |
|
|
Derivative financial instruments |
(2,919) |
(2,996) |
|
|
Lease liabilities |
(1,064) |
(1,450) |
|
|
|
(14,280) |
(15,366) |
|
|
Liabilities associated with disposal group |
(1,589) |
- |
|
|
Net current assets |
32,950 |
37,383 |
|
|
Non-current liabilities |
|
|
|
|
Lease liabilities |
(1,515) |
(2,521) |
|
|
Total non-current liabilities |
(1,515) |
(2,521) |
|
|
Total liabilities |
(17,384) |
(17,887) |
|
|
Net assets |
56,158 |
70,337 |
|
|
Equity |
|
|
|
|
Share capital |
7,833 |
7,833 |
|
|
Share premium |
29,328 |
29,328 |
|
|
Own shares |
(1,957) |
(2,676) |
|
|
Translation reserves |
818 |
594 |
|
|
Other reserves |
21,167 |
20,921 |
|
|
Retained earnings |
(4,802) |
7,598 |
|
|
Equity attributable to owners of the company |
52,387 |
63,598 |
|
|
Non-controlling interest |
3,771 |
6,739 |
|
|
Total equity |
56,158 |
70,337 |
|
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
|
|
|||||||||
|
FOR THE YEAR ENDED 31 DECEMBER 2020 |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share |
Share |
Own |
Other |
Translation |
Retained |
|
Non-controlling |
Total |
|
|
|
capital |
premium |
shares |
reserves |
reserves |
earnings |
Total |
interest |
equity |
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Balance at 1 January 2019 |
|
7,833 |
29,328 |
(3,113) |
15,144 |
817 |
79,343 |
129,352 |
2,026 |
131,378 |
|
Profit for the year |
|
- |
- |
- |
- |
- |
(71,051) |
(71,051) |
(423) |
(71,474) |
|
Exchange differences on retranslation of net investment |
|
- |
- |
- |
- |
(157) |
- |
(157) |
(35) |
(192) |
|
Total comprehensive income for the year as reported |
|
- |
- |
- |
- |
(157) |
(71,051) |
(71,208) |
(458) |
(71,666) |
|
Correction of error |
|
- |
- |
- |
- |
(66) |
(257) |
(323) |
- |
(323) |
|
Total comprehensive income for the year as restated |
|
- |
- |
- |
- |
(223) |
(71,308) |
(71,531) |
(458) |
(71,989) |
|
Own shares sold in the year |
|
- |
- |
437 |
- |
- |
(437) |
- |
- |
- |
|
Credit to equity for equity-settled share-based payments |
|
- |
- |
- |
1,111 |
- |
- |
1,111 |
- |
1,111 |
|
Adjustment arising from change in non-controlling interest |
|
- |
- |
- |
4,666 |
- |
- |
4,666 |
5,171 |
9,837 |
|
Balance at 31 December 2019 |
|
7,833 |
29,328 |
(2,676) |
20,921 |
594 |
7,598 |
63,598 |
6,739 |
70,337 |
|
Loss for the year |
|
- |
- |
- |
- |
- |
(11,685) |
(11,685) |
(2,984) |
(14,669) |
|
Tax on items taken directly to equity |
|
- |
- |
- |
- |
- |
(5) |
(5) |
- |
(5) |
|
Exchange differences on retranslation of net investment |
|
- |
- |
- |
- |
224 |
- |
224 |
16 |
240 |
|
Total comprehensive income for the year |
|
- |
- |
- |
- |
224 |
(11,690) |
(11,466) |
(2,968) |
(14,434) |
|
Own shares sold in the period |
|
- |
- |
719 |
- |
- |
(710) |
9 |
- |
9 |
|
Credit to equity for equity-settled share-based payments |
|
- |
- |
- |
246 |
- |
- |
246 |
- |
246 |
|
Balance at 31 December 2020 |
|
7,833 |
29,328 |
(1,957) |
21,167 |
818 |
(4,802) |
52,387 |
3,771 |
56,158 |
|
CONSOLIDATED STATEMENT OF CASH FLOWS |
|
|
|
|
|
FOR THE YEAR ENDED 31 DECEMBER 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 |
2019 Restated |
|
|
Notes |
|
£'000 |
£'000 |
|
Net cash used in operating activities |
5 |
|
(2,807) |
(9,828) |
|
Cash flows from investing activities |
|
|
|
|
|
Investment income |
|
|
64 |
103 |
|
Treasury deposits withdrawn |
|
|
361 |
2,755 |
|
Purchase of derivative financial instrument |
|
|
(130) |
- |
|
Purchases of property, plant and equipment |
|
|
(1,098) |
(1,071) |
|
Proceeds on disposal of property, plant and equipment |
|
|
167 |
- |
|
Expenditure on software |
|
|
- |
(90) |
|
Expenditure on capitalised product development |
|
|
- |
(2,255) |
|
Net cash used in investing activities |
|
|
(636) |
(558) |
|
Cash flows from financing activities |
|
|
|
|
|
Proceeds from non-controlling interest transactions |
|
|
- |
12,003 |
|
Payment of lease liabilities and related interest |
|
|
(1,224) |
(1,274) |
|
Net cash (used in)/provided by financing activities |
|
|
(1,224) |
10,729 |
|
Net (decrease)/increase in cash and cash equivalents |
|
|
(4,667) |
343 |
|
Effect of foreign exchange rate changes on cash balances |
|
|
(57) |
(212) |
|
Cash and cash equivalents at beginning of year |
|
|
24,800 |
24,669 |
|
Cash and cash equivalents at end of year |
|
|
20,076 |
24,800 |
|
Cash and cash equivalents attributable to assets held for sale |
|
|
2,120 |
- |
|
Cash and cash equivalents |
|
|
17,956 |
24,800 |
NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2020
1. Basis of preparation and accounting policies
Basis of preparation
The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 December 2019 and 2020 but is derived from those accounts. Statutory accounts for 2019 have been delivered to the Registrar of Companies and those for 2020 will be delivered following the Company's Annual General Meeting. The auditor has reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under s498 (2) or (3) Companies Act 2006.
While the financial information included in this summary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with International Financial Reporting Standards. The Company expects to publish full financial statements that comply with IFRSs in April 2021.
Going concern
The Board continuously review the performance of the business and its future prospects. Throughout the COVID-19 pandemic the Board has also reviewed numerous downside scenarios for each of the business units and the Group as a whole. As well as reviewing a number of downside scenarios, and possible mitigations, the Board has also performed a reverse stress test of the business to assess the Group's ability to continue as a going concern. The results of the stress test indicate the business could withstand very significant changes in the trading environment whilst being able to continue to trade.
To date the impact of COVID-19 on the Group's trading has been minimal and the Board remains cautiously optimistic. The Group continues to enjoy a strong cash position and is well positioned to cope with the current situation. The Board remains confident in the long-term future prospects for the Group and its ability to continue as a going concern for the foreseeable future. For this reason, we continue to adopt the going concern basis in preparing the financial statements.
2. Reconciliation of adjusted financial measures
|
|
|
2020 |
2019 Restated |
|
|
|
£'000 |
£'000 |
|
Loss before tax from continuing operations |
|
(4,322) |
(10,937) |
|
Share-based payment charges |
|
348 |
910 |
|
Exchange differences on intra-group transactions |
|
347 |
499 |
|
(Gain)/loss on derivative financial liabilities |
|
(77) |
87 |
|
Restructuring costs |
|
754 |
1,519 |
|
Other operating income |
|
(819) |
- |
|
R&D Expenditure credit |
|
(142) |
(29) |
|
Adjusted loss before tax from continuing operations |
|
(3,911) |
(7,952) |
|
Interest |
|
35 |
32 |
|
Depreciation of property, plant and equipment |
|
3,856 |
2,970 |
|
Amortisation of intangible assets |
|
82 |
93 |
|
Adjusted EBITDA from continuing operations |
|
62 |
(4,857) |
EBITDA is calculated as statutory operating profit before depreciation, amortisation and impairment of property, plant and equipment, intangible assets and goodwill. Adjusted EBITDA is calculated as EBITDA excluding other adjusting items as defined.
Adjusted financial measures are alternative performance measures, which adjust for recurring and non-recurring items that management consider to have a distorting effect on the underlying results of the Group.
Share-based payment charges include the IFRS 2 charge for the period of £242,000 (2019: £1,109,000) and the debit relating to National Insurance on the outstanding potential share option gains of £106,000 (2019: credit £199,000). These costs were included in the general and administrative expenses in the consolidated income statement.
Exchange differences relating to the United States, Danish and Swedish operations represent exchange gains or losses recorded in the consolidated income statement as a result of intragroup transactions in the United States, Denmark and Sweden. These costs were included in general and administrative expenses in the Consolidated income statement.
Gain/loss on derivative financial instruments relate to gains and losses made on call option contracts. These amounts are included on the consolidated income statement under (Gain)/loss on derivative financial liabilities.
Restructuring costs of £754,000 (2019: £1,519,000) relate to costs incurred and provisions made in relation to reorganisation. In the prior year, it relates mainly to the 2019 redundancy programme. The calculated impact of the restructuring at Corporation Tax rate of 19% would be £143,000 (2019: £289,000). The cash related to restructuring is £518,000 (2019: £896,000).
Other operating income of £819,000 (2019: £nil) relates to a forgivable $1m loan between Engineered Print Solutions (EPS) and TD bank and is backed by the US Federal Government (Small Business Administration). The loan was taken out as part of the government backed scheme. The company considers that it has met the requirements of the waiver, and therefore expects it to be waived, the loan has therefore been treated as a government grant under IAS 20. Cash receipt of the same amount were received.
The research and development expenditure credit relates to the corporation tax relief receivable relating to qualifying research and development expenditure. This item is shown on the face of the consolidated income statement. Cash receipts of £1,460,000 (2019: £1,587,334) were received in relation to 2018 and 2019 RDEC claims submitted.
|
|
|
|
2020 |
Restated 2019 |
|
|
Notes |
|
Pence per share |
Pence per share |
|
Basic and diluted earnings per share continuing operations |
4 |
|
(5.7p) |
(18.7p) |
|
Share-based payment charges |
|
|
0.5p |
1.2p |
|
Exchange differences on intra-group transactions |
|
|
0.5p |
0.6p |
|
(Gain)/loss on derivative financial assets |
|
|
(0.1p) |
0.1p |
|
Restructuring costs |
|
|
1.0p |
2.0p |
|
Other operating income |
|
|
(1.1p) |
- |
|
Tax effect of adjusting items |
|
|
(0.3p) |
(0.3p) |
|
Adjusted basic and diluted earnings per share |
|
|
(5.2p) |
(15.1p) |
This reconciliation is provided to align with how the Board measure and monitor the business at an underlying level.
3. Business segments
For management reporting purposes, the Group's operations are analysed according to the three operating segments of 'Printhead', 'Product Print Systems', and '3D Printing'. These three operating segments are the basis on which the Group reports its primary segment information and on which decisions are made by the Group's Chief Executive Officer and Board of Directors, and resources allocated. Each business unit is run independently of the others and headed by a general manager. The Group's chief operating decision maker is the Chief Executive Officer. There is no aggregation of segments for disclosure purposes.
The Xaar 3D business which we expect to divest in the first half of 2021 has been reclassified as held for sale and discontinued operations, hence the 3D Printing is presented separately in note 6 and the 2019 comparatives has been restated accordingly.
Segment information for continuing operations is presented below:
|
|
Printhead |
Product Print Systems |
Unallocated |
Consolidated |
|
Year ended 31 December 2020 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Revenue |
|
|
|
|
|
Total segment revenue |
35,283 |
12,701 |
- |
47,984 |
|
Result |
|
|
|
|
|
Adjusted loss from continuing operations before tax |
(3,431) |
(480) |
- |
(3,911) |
|
Share-based payment charges |
- |
- |
(348) |
(348) |
|
Exchange differences on intra-group transactions |
(347) |
- |
- |
(347) |
|
Restructuring |
(754) |
- |
- |
(754) |
|
Gain on financial instrument |
77 |
- |
- |
77 |
|
Research and development expenditure credit |
142 |
- |
- |
142 |
|
Other operating income |
- |
819 |
- |
819 |
|
(Loss)/profit before tax |
(4,313) |
339 |
(348) |
(4,322) |
|
|
Printhead |
Product Print Systems |
Unallocated |
Restated |
|
Year ended 31 December 2019 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Revenue |
|
|
|
|
|
Total segment revenue |
33,681 |
15,698 |
- |
49,379 |
|
Result from continuing operations |
|
|
|
|
|
Adjusted (loss)/profit before tax from continuing operations |
(8,019) |
67 |
- |
(7,952) |
|
Share-based payment charges |
- |
- |
(910) |
(910) |
|
Exchange differences on intra-group transactions |
(499) |
- |
- |
(499) |
|
Restructuring |
(1,574) |
55 |
- |
(1,519) |
|
Loss on financial instrument |
(87) |
- |
- |
(87) |
|
Research and development expenditure credit |
29 |
- |
- |
29 |
|
(Loss)/profit before tax |
(10,150) |
122 |
(910) |
(10,938) |
Share-based payment charges include the IFRS 2 charge for the period and the charge or credit relating to National Insurance on the outstanding potential share options, excluding the charge attributable to Xaar 3D as discontinued operations £5,000 (2019: £2,000).
4. Earnings per share - basic and diluted
The calculation of basic and diluted earnings per share is based on the following data:
|
|
|
Restated |
|
|
2020 |
2019 |
|
|
£'000 |
£'000 |
|
Earnings |
|
|
|
Earnings for the purposes of basic earnings per share being net (loss) attributable to equity holders of the parent |
(11,685) |
(71,308) |
|
from continuing operations |
(4,374) |
(14,434) |
|
from discontinued operations |
(7,311) |
(56,874) |
|
Number of shares |
|
|
|
Weighted average number of ordinary shares for the purposes of basic earnings per share |
77,103,593 |
77,116,331 |
|
Effect of dilutive potential ordinary shares: |
|
|
|
Share options |
- |
- |
|
Weighted average number of ordinary shares for the purposes of diluted earnings per share |
77,103,593 |
77,116,331 |
|
|
|
|
|
|
2020 |
2019 |
|
|
Pence per share |
Pence per share |
|
Basic |
(15.2p) |
(92.5p) |
|
Diluted |
(15.2p) |
(92.5p) |
|
Continuing operations |
|
|
|
Basic |
(5.7p) |
(18.7p) |
|
Diluted |
(5.7p) |
(18.7p) |
|
Discontinued operations |
|
|
|
Basic |
(9.5p) |
(73.8p) |
|
Diluted |
(9.5p) |
(73.8p) |
5. Notes to cash flow statement
|
|
|
Restated |
|
|
2020 |
2019 |
|
|
'000 |
'000 |
|
Loss before tax from continuing operations |
(4,322) |
(10,937) |
|
Loss before tax from discontinued operations |
(10,105) |
(61,211) |
|
Loss before tax |
(14,427) |
(72,148) |
|
Adjustments for: |
|
|
|
Share based payments |
353 |
912 |
|
Depreciation of property, plant and equipment |
4,223 |
3,776 |
|
Depreciation of right of use assets |
1,236 |
1,061 |
|
Amortisation of intangible assets |
685 |
1,024 |
|
Impairment of assets |
391 |
39,013 |
|
Research and development expenditure credit |
(454) |
(2,610) |
|
Investment income |
(72) |
(103) |
|
Interest expense |
94 |
110 |
|
Foreign exchange losses |
523 |
447 |
|
Gain on re-measurement of derivative liability |
(77) |
(106) |
|
Loss/(profit) on disposal of property, plant and equipment |
99 |
(18) |
|
Other gains and losses |
202 |
623 |
|
Increase/(decrease) in provisions |
(2,572) |
1,267 |
|
Operating cash flows before movements in working capital |
(9,796) |
(26,752) |
|
Decrease in inventories |
4,849 |
11,805 |
|
(Increase)/decrease in receivables |
(1,337) |
11,059 |
|
Decrease/(increase) in payables |
2,011 |
(9,332) |
|
Cash used in operations |
(4,273) |
(13,220) |
|
Income taxes received |
1,466 |
3,392 |
|
Net cash used in operating activities |
(2,807) |
(9,828) |
6. Discontinued operations
On 26 September 2019, Xaar announced the cessation of all Thin Film activities. This resulted in an impairment charge of £39,000,000 in the interim 2019 financial statements which is made up of £28,500,000 of intangible assets, £5,400,000 of property plant equipment and £5,100,000 working capital.
The Thin Film business which was discontinued in 2019 incurred costs in 2020 which mainly related to supplier liabilities and inventory for last time buy sales. All liabilities have now been settled and we maintain a small level of inventory which we expect to sell in the first half of 2021. Of the total Group net assets, £271,000 is related to Thin Film which is not included in net assets held for sale.
As detailed in the strategic and financial update the Xaar 3D business which we plan to divest in the first half of 2021 has been reclassified as held for sale and a discontinued operation given the disposal has been assessed as highly probable.
The results of Thin Film and 3D related activities for the year are shown below:
|
|
|
|
|
|
Thin Film |
3D |
Total |
Thin Film |
3D |
Total |
|
|
|
|
|
|
2020 |
2020 |
2020 |
2019 |
2019 |
2019 |
|
|
|
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Revenue |
|
|
|
|
258 |
734 |
992 |
1,586 |
18 |
1,604 |
|
Expenses |
|
|
|
|
(3,922) |
(7,175) |
(11,097) |
(61,587) |
(1,228) |
(62,815) |
|
Loss before income tax |
|
|
|
(3,664) |
(6,441) |
(10,105) |
(60,001) |
(1,210) |
(61,211) |
|
|
Income tax (charge)/credit |
|
|
|
- |
(190) |
(190) |
3,918 |
(4) |
3,914 |
|
|
Loss after income tax from discontinued operation |
|
(3,664) |
(6,631) |
(10,295) |
(56,083) |
(1,214) |
(57,297) |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
|
|
|
|
Owners of the Company |
|
|
|
(3,664) |
(3,647) |
(7,311) |
(56,083) |
(791) |
(56,874) |
|
|
Non-controlling interest |
|
|
|
- |
(2,984) |
(2,984) |
- |
(423) |
(423) |
|
|
Loss after income tax from discontinued operation |
|
(3,664) |
(6,631) |
(10,295) |
(56,083) |
(1,214) |
(57,297) |
|||
The major classes of assets and liabilities of 3D classified as held for sale as of 31 December 2020 are as follows:
|
|
|
|
|
|
2020 |
|
|
|
|
|
|
£'000 |
|
Assets |
|
|
|
|
|
|
Property, plant and equipment |
|
|
1,041 |
||
|
Intangible assets |
|
|
|
4,649 |
|
|
Deferred Tax Asset |
|
|
|
68 |
|
|
Right of use asset |
|
|
|
440 |
|
|
Inventory |
|
|
|
|
919 |
|
Debtors |
|
|
|
|
737 |
|
Cash and cash equivalents |
|
|
|
2,120 |
|
|
Assets held for sale |
|
|
|
9,974 |
|
|
Liabilities |
|
|
|
|
|
|
Creditors |
|
|
|
|
(1,115) |
|
Corporate income tax |
|
|
|
(6) |
|
|
Provisions (Warranty & Restructuring) |
|
|
(11) |
||
|
IFRS 16 lease liability |
|
|
|
(463) |
|
|
Liabilities associated with the assets held for sale |
|
(1,595) |
|||
|
Net assets associated with disposal group |
|
8,379 |
|||
The net cash flows incurred by Thin Film and 3D are as follows.
|
|
|
|
|
|
Thin Film |
3D |
Total |
Thin Film |
3D |
Total |
|
|
|
|
|
|
2020 |
2020 |
2020 |
2019 |
2019 |
2019 |
|
|
|
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Net cash outflow from operating activities |
(5,058) |
(6,213) |
(11,271) |
(17,647) |
(2,434) |
(20,081) |
||||
|
Net cash outflow from investing activities |
(25) |
(645) |
(670) |
(321) |
(2,299) |
(2,620) |
||||
|
Net cash inflow/(outflow) from financing activities |
- |
(160) |
(160) |
- |
5,511 |
5,511 |
||||
|
Net decrease in cash generated from discontinued operation |
(5,083) |
(7,018) |
(12,101) |
(17,968) |
778 |
(17,190) |
||||
|
|
|
|
|
|
2020 |
Restated 2019 |
|
|
|
|
|
|
Pence per share |
Pence per share |
|
Earnings (loss) per share |
|
|
|
|
|
|
|
Basic, loss for the year from discontinued operations |
|
(9.5p) |
(73.8p) |
|||
|
Diluted, loss for the year from discontinued operations |
|
(9.5p) |
(73.8p) |
|||
Potential ordinary shares are treated as dilutive if their conversion to ordinary shares would decrease earnings per share or increase loss per share. Therefore in 2020, the diluted earnings per share is not impacted by the effect of dilutive potential ordinary shares.
7. Restatement of prior period
The financial statements include a prior year restatement in relation to the release of untaxed reserves of £623,000 in XaarJet AB in 2019. This reserve is a Swedish-IFRS GAAP difference and both balance sheet and income statement impacts, should have been eliminated on consolidation. The accounting for these untaxed reserves should have no impact on the consolidated Group financial statements as the untaxed reserves are not carried on the Group Balance Sheet, in accordance with IFRS. However, in 2019 an entry was incorrectly recorded which resulted in a credit of £623,000 to the income statement, with a corresponding reduction to other payables and accruals. A correcting entry has been recorded in these financial statements, as a prior year adjustment to eliminate these entries from the 2019 Balance Sheet and Income Statement with a corresponding increase in exceptional costs in 2019 of £623,000 and associated translation reserve impact of £66,000.
Furthermore there was the reversal of an adjustment on intercompany sales which had been made in 2019 in error. The goods had been sold externally by the year end. The adjustment impacts cost of sales (£278,000), general and administrative expenses (£88,000) and inventory (£366,000).
In addition, as required under IFRS the financial statements have been restated to present the assets, liabilities and net income from discontinued operations associated with the planned and ongoing sale of 3D business unit as single lines in the comparative period, which is consistent with the current year presentation (further information and other required disclosures can be found on note 6).
The following tables summarise the impact of the prior year restatement on the financial statements of the Group for year ended 31 December 2019:
|
CONSOLIDATED INCOME STATEMENT |
2019 |
|
|
|
|
|
|
as reported |
Untaxed reserve |
Inventory |
3D |
2019 restated |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
Revenue |
49,397 |
- |
- |
(18) |
49,379 |
|
Cost of sales |
(37,435) |
- |
277 |
69 |
(37,089) |
|
Gross profit |
11,962 |
- |
277 |
51 |
12,290 |
|
Research and development expenses |
(3,502) |
- |
- |
421 |
(3,081) |
|
Research and development expenditure credit |
260 |
- |
- |
(231) |
29 |
|
Sales and marketing expenses |
(8,410) |
- |
- |
306 |
(8,104) |
|
General and administrative expenses |
(8,689) |
- |
89 |
882 |
(7,718) |
|
Impairment losses on financial assets |
(2,715) |
- |
- |
- |
(2,715) |
|
Restructuring costs |
(896) |
(623) |
- |
- |
(1,519) |
|
Gain on derivative financial liabilities |
106 |
- |
- |
(193) |
(87) |
|
Operating (loss)/profit |
(11,884) |
(623) |
366 |
1,236 |
(10,905) |
|
Investment income |
103 |
- |
- |
(38) |
65 |
|
Finance costs for leases |
(110) |
- |
- |
13 |
(97) |
|
(Loss)/profit before tax |
(11,891) |
(623) |
366 |
1,211 |
(10,937) |
|
Income tax credit/(expense) |
(3,501) |
- |
- |
4 |
(3,497) |
|
(Loss)/profit for the year from continuing operations |
(15,392) |
(623) |
366 |
1,215 |
(14,434) |
|
Loss from discontinued operations after tax |
(56,082) |
- |
- |
(1,215) |
(57,297) |
|
Loss for the year |
(71,474) |
(623) |
366 |
- |
(71,731) |
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
Owners of the Company |
(71,051) |
(623) |
366 |
- |
(71,308) |
|
Non-controlling interests |
(423) |
- |
- |
- |
(423) |
|
|
(71,474) |
(623) |
366 |
- |
(71,731) |
|
|
|
|
|
|
|
|
Earnings (loss) per share (pence per share) |
|
|
|
|
|
|
Basic |
(19.4p) |
(0.8p) |
0.5p |
1.0p |
(18.7p) |
|
Diluted |
(19.4p) |
(0.8p) |
0.5p |
1.0p |
(18.7p) |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
|
|
2019 |
|
|
|
|
|
|
|
|
as reported |
Untaxed reserve |
Inventory |
3D |
2019 restated |
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Loss for the year |
|
(71,474) |
(623) |
366 |
- |
(71,731) |
|
Exchange differences on retranslation of net investment |
(192) |
(66) |
- |
- |
(258) |
|
|
Other comprehensive loss for the year |
|
(192) |
(66) |
- |
- |
(258) |
|
Total comprehensive loss for the year |
|
(71,666) |
(689) |
366 |
- |
(71,989) |
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
Owners of the Company |
|
(71,208) |
(689) |
366 |
- |
(71,531) |
|
Non-controlling interests |
|
(458) |
- |
- |
- |
(458) |
|
|
|
(71,666) |
(689) |
366 |
- |
(71,989) |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
as reported |
Untaxed reserve |
Inventory |
3D |
2019 restated |
|
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Current assets |
|
|
|
|
|
|
|
|
Inventories |
|
|
16,164 |
- |
366 |
- |
16,530 |
|
Total assets |
|
|
87,858 |
- |
366 |
- |
88,224 |
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Trade and other payables |
|
|
(7,284) |
(689) |
- |
- |
(7,973) |
|
Total liabilities |
|
|
(17,198) |
(689) |
- |
- |
(17,887) |
|
Net assets |
|
|
70,660 |
(689) |
366 |
- |
70,337 |
|
Equity |
|
|
|
|
|
|
|
|
Translation reserve |
|
|
660 |
(66) |
- |
- |
594 |
|
Retained earnings |
|
|
7,855 |
(623) |
366 |
- |
7,598 |
|
Total equity |
|
|
70,660 |
(689) |
366 |
- |
70,337 |
8. Non-Adjusting Post Balance Sheet Event - 3D call option
In the year ended 31 December 2020, the Company invested approximately £7.0million cash in Xaar 3D. Due to delays caused by the impact of the COVID-19 pandemic on the development of Xaar 3D products, the Directors believe there was a risk that the Xaar 3D programme may take longer than anticipated when it entered into the original Call Option with Stratasys, and subsequently the Company would be required to commit additional funds to Xaar 3D. With further investment anticipated, the Xaar Board has considered all options for the future financing and ownership structure of Xaar 3D, and accordingly has held detailed discussions to sell the remaining stake in Xaar 3D. Terms are still to be finalised and may potentially differ to those of the Call Option originally agreed in 2019.
The terms of any final agreement will be subject to Xaar shareholder approval.
Such an arrangement would provide Xaar 3D with the best opportunity to complete the commercialisation of the HSS product range in the shortest time, would lead to an immediate injection of cash and will enable Xaar to focus on its core business.
|
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