Final Results

Xaar PLC

24 March 2026

 

24 March 2026

Xaar Plc

("Xaar", the "Group" or the "Company")

Results for the year ended 31 December 2025

Xaar, the inkjet printing technology group, announces its audited results for the year ended 31 December 2025.

Highlights:

-           Revenue from continuing operations of £60.1 million (2024: £53.8 million), up 12% at constant currency

-           Printhead revenue up 22% to £43.0 million (2024: £35.2 million)*

-           Adjusted profit before tax from continuing operations of £0.8 million (2024: (£1.0) million)

-           Net cash of £4.9 million (2024: £8.2 million) after investing £2.0 million in capex and £0.9 million in purchase of own shares

-           R&D investment for Printhead and Megnajet at c.10% of revenue, consistent with prior year

-           Commercial breakthrough in jewellery wax 3D printing market

-           Further progress in other key development projects

-           Dongguan facility opened for ink‑delivery manufacturing; customer demonstration and supply‑chain optimisation.

*Note printhead revenue in 2024 has been restated to include FFEI discontinued operations, when using non-restated figure the % increase is 29%

Commenting on the performance and outlook, John Mills, Chief Executive, said:

"Xaar's differentiated technology can deposit precise volumes of high viscosity inks with pin-point accuracy. This capability brings benefits, increasingly in new applications which are driven by global trends towards digital manufacturing and the need to reduce process waste. Over the last five years, a period during which Xaar's traditional markets have been troubled, the Group has revitalised product design and developed new products for applications where higher viscosity or higher pigment loading offers differentiation. This is starting to contribute to results, with printhead revenues up 22% in 2025. Commercial breakthrough has been achieved this year in wax 3D printing, and demonstrable progress is being made in several other new applications.

Operationally in 2025 the focus has been on margin enhancement, including opening a facility in Dongguan to be closer to Asian customers and to provide better supply chain resilience and efficiency.

 

The timing of revenue from new applications, which generally require several layers of customer qualification, can be uncertain. This complexity, while sometimes challenging, eventually leads to much clearer competitive advantage, along with a valuable annuity revenue for printheads. Early trading in 2026 is in line with expectations. The order book is healthy for this time of year, and the Board believes the Group is well positioned for further progress - both in 2026 and in the longer term."

Contacts

 

Xaar plc
John Mills, Chief Executive Officer
Paul James, Chief Financial Officer
Beth Connolly-Atkins, Investor Relations		[e-mail] [phone]

 

About Xaar plc

Xaar is an inkjet printing technology Group, providing unique printheads and related technologies for customers worldwide. It has over thirty years of operational experience and around 147 patents registered or pending. A key feature of Xaar's technology is its ability to work in both two and three dimensional substrates. It is based in the UK and has operations in the US and China.

Operating Summary

Our priorities for 2025 were to grow printhead revenue; to further develop our differentiated products in new applications; to improve operational efficiencies; and to deliver financial results at or ahead of market expectations. No trading year ever goes quite as expected, but overall 2025 was satisfactory.

 

	2025	2024 restated*	Change
From continuing operations**
Revenue	£60.1m	£53.8m	12%
Gross margin %	40%	37%	3%
Gross R&D investment***	£4.7m	£4.3m	10%
Adjusted EBITDA	£3.5m	£2.2m	56%
Adjusted profit before tax	£0.8m	(£1.0m)	179%
Reported loss for the period	£(3.0)m	£(8.6)m	(65%)
Loss from discontinued operations	£(0.4)m	(2.3)m	84%
Reported loss for the period	£(3.4)m	£(10.8)m	(69%)
Adjusted earnings per share	1.1p	0.7p	0.4p
Basic loss per share	(4.3)p	(13.7)p	9.4p
Net cash at the period end****	£4.9m	£8.2m	(40%)

*Refer to Note 11 and 31 for prior year restatement details.

**This excludes the discontinued Life Sciences business of FFEI

***Group R&D investment exclusive of any capitalised costs as used to determine adjusted profit before tax.

****Net cash includes cash, cash equivalents and treasury deposits, net of invoice discounting facility.

Figures included in this report are subject to rounding adjustments arising from conversion to £millions. Accordingly, figures shown for the same category presented in different tables may vary slightly, and figures shown as totals may not be an arithmetic aggregation of the figures that precede them.

Revenue was £60.1 million, up 12% from 2024. Adjusted operating profit was £1.1 million (2024: £0.6 million), with adjusted profit before tax from continuing operation of £0.8 million. Gross margins improved to 40% (2024: 37%). Adjusted Basic earnings per share were 1.1 pence (2024: 0.7 pence). The Group ended the year with £4.9 million (2024: £8.2 million) of net cash and remains well capitalised.

Printhead revenues grew 22%. Printhead volumes into the core ceramics market stabilised and growth came from new products and new markets - a clear sign of the benefits of our business development work. Commercial breakthrough was achieved in the digital manufacture of jewellery.

Printhead sales were well supported by systems and integration activities, with Megnajet revenues up 2%. Revenues at Engineered Print Systems ('EPS') fell 10%, with disruption in end markets leading to a business review and change of management early in the year. Overall progress was impacted by the EPS revenue decline, which reduced Group revenue despite strong printhead growth. Moving into 2026 the new product and new application pipeline at EPS is healthy and the outlook is stronger.

Commercially the focus in 2025 was on enhanced engagement with existing customers. We sought to improve the responsiveness of our technical support teams and sharpen regional commercial focus, particularly in markets where digital print adoption is gaining traction such as corrugated, textiles, wax and Printed Circuit Board (PCB) conformal coating.

A key operational milestone was the opening of our new facility in Dongguan, expanding our presence in Asia and supporting growing demand for our technologies in the region. The site will manufacture ink delivery systems for Asian OEMs and integrators, and it will house a technology partnership centre, to strengthen customer engagement and speed up customer qualifying processes. The facility will also offer capacity for component assembly, leaving production linked to our core IP remaining in the UK. This will allow us to handle rising order volumes while maintaining the quality and consistency expected of Xaar products. Shorter supply chains for commodity components will further enhance operational capabilities.

Strategy and Purpose

Xaar's strategic objective is the development of differentiated inkjet printing technology businesses for the benefit of all stakeholders. Our unique technology delivers precise deposition of specialist fluids with pin-point accuracy. Our technology can handle higher viscosity and pigment loading than our competitors, a capability that can offer significant advantages. Our business model is to design and manufacture high-performance industrial inkjet printheads, ink delivery systems and integrated equipment, offering these, along with the necessary applications expertise, to both OEM manufacturers and print-system integrators.

The Group is increasingly well positioned to benefit from the global trends: both in the expansion of digital manufacturing and the need to reduce process waste.

Xaar has been developing its technical capabilities for over thirty years, mainly for the traditional print markets of ceramic tiles and coding & marking. These are well established segments but have been troubled in recent years. The Group has therefore sought to expand its application base to improve financial consistency, raise margins and take advantage of the rapid expansion of digital manufacturing techniques. This has led the Group into several new markets, including:

-     3D printing, notably in Wax and Desktop 3D, where more functional fluids offer superior printed components

-     Automotive coating, where inkjet can give greater design flexibility and significant materials savings

-     Electric Vehicle (EV) battery coating, where inkjet can replace Polyethylene Terephthalate (PET) wrap

-     Packaging & Textiles, where high viscosity and lower water content offer higher speed printing and lower energy costs

-     Labelling, where high ink laydown can offer design differentiation

In each case, either high viscosity or higher pigment loading brings demonstrable value to the end customer. Xaar is uniquely able to offer printheads with this capability due to its patent protected architecture and unparalleled technical know-how.

This sort of applications development is complex, requiring cooperation between the makers of: the printhead; the fluid to be printed; and the printing machine. Further, as with all manufacturing process developments, several layers of customer accreditation are necessary for commercial adoption. The timing of projects is therefore uncertain. But this complexity, which can be frustrating, is also the key to long term advantage and provides a significant barrier to entry for competition. Moreover, and critical to the Board's strategy for the Group, printheads need to be replaced regularly, leading to annuity revenue streams.

Therefore, the Group seeks to:

-     Focus on applications with structural long term growth drivers where our unique technology provides a specific advantage

-     Make product development a core business activity

-     Invest in complementary skills and capabilities to be able to offer a turnkey solution for new application opportunities

-     Invest in operational efficiency to maintain competitive advantage in core markets

The Board aims to meet investment needs from free cash flow and modest borrowing facilities. All investments are assessed against internal hurdle rates based on strategic and financial priorities.

The Board believes that, after a period of renewal and revitalisation, Xaar is capable of consistent long-term growth, driven by unique technology and global manufacturing trends.

Performance by business sector

Printhead

Revenue growth of 22% was all driven by new business, with several OEMs adopting Xaar technology for the first time.

The digital jewellery wax market continued its expansion with a growth in our market share, with traditional methods of manufacture being replaced by digital printing. Revenues into the ceramics market stabilised as market conditions normalised. Declines in this market, linked to fundamental changes in Chinese domestic property activity, has been a headwind for Xaar for some time and the Board is pleased to see newer applications featuring in results.

The Printhead division is increasingly positioned around high‑value industrial opportunities where Xaar's strengths in reliable high‑viscosity, jetting provides a clear competitive advantage. As these projects develop, and each new application is qualified, we expect to grow a wider base for the business, which, in conjunction with annuity printhead replacement, should allow for more consistent financial performance over time.

Megnajet

Megnajet specialises in inkjet fluid management, domain knowledge critical to printhead development. Demand for its high‑precision ink delivery systems comes from applications where consistency, control and reliability are critical.

In 2025, Megnajet revenue growth was 2%, helped by an increased uptake of modular platforms, which simplify customer integration and enhance the performance of our latest printheads.

Engineered Print Systems (EPS)

EPS delivered revenue of £14.5 million in 2025 (2024: £16.1 million), reflecting generally difficult end markets in the US, the ending of a multi-year project in 2024, and a refocussing of priorities under new management.

The new leadership team has strengthened project execution, refined the commercial pipeline and improved overall business discipline. In 2026 EPS is a more streamlined, better‑positioned organisation.

Environmental, Social and Governance (ESG)

Xaar products help customers to adopt digital manufacturing techniques which reduce waste and energy usage. Our research shows that, compared to analogue alternatives, digital manufacturing has a significant impact in reducing energy consumption (by as much as 55%), water consumption (by up to 60%) and CO2 emissions (by up to 95%). Xaar's ESG roadmap has five key pillars - Environment, People, Innovation, Community and Governance. In 2025:

-     We advanced initiatives to reduce waste, energy use and refrigerant leaks, reducing Scope 1 & 2 emissions.

-     We expanded training and development programmes to support skills, career pathways, and employee wellbeing.

-     We strengthened governance structures supporting risk management, safety, and ethical conduct.

Xaar is committed to reducing its impact on the environment wherever possible and helping customers do the same.

Dividend

The Board has not declared a dividend for 2025.  We continue to assess capital allocation carefully and remain committed to maintaining the balance between investing for future growth and delivering shareholder returns.

Staff and Board Changes

The Board maintains direct contact with staff through regular site visits during which the commitment and enthusiasm of staff is evident. We are very grateful for their hard work and dedication. They have been through several years of transition with Xaar, and without them we would not be looking forward to the range of opportunities we now have before us.

There have been Board changes during the year. As previously announced, Paul James joined the Group in January 2025 and is now established as an effective and influential CFO. After nine years Andrew Herbert stepped down as Chair in September. The Group is indebted to him for his leadership through a renewal agenda: strengthening the Board, developing new products suitable for new markets; and improving business processes. He left Xaar revitalised and well positioned. Ben Stocks joined the Board in October 2025 as Chair. Ben was CEO of Porvair PLC from 1998 to 2025. He is a non-executive director of the City of London investment Group and the Aerospace Technology Institute.

Outlook

Xaar's differentiated technology can deposit precise volumes of high viscosity inks with pin-point accuracy. This capability brings benefits, increasingly in new applications which are driven by global trends towards digital manufacturing and the need to reduce process waste. Over the last five years, a period during which Xaar's traditional markets have been troubled, the Group has revitalised product design and developed new products for applications where higher viscosity or higher pigment loading offers differentiation. This is starting to contribute to results, with printhead revenues up 22% in 2025. Commercial breakthrough has been achieved this year in wax 3D printing, and demonstrable progress is being made in several other new applications.

Operationally in 2025 the focus has been on margin enhancement, including opening a facility in Dongguan to be closer to Asian customers and to provide better supply chain resilience and efficiency.

The timing of new application projects, which generally require several layers of customer qualification, can be uncertain. This complexity, while sometimes challenging, eventually leads to much clearer competitive advantage, along with - for printheads - valuable annuity revenue. Early trading in 2026 is in line with expectations. The order book is healthy for this time of year, and the Board believes the Group is well positioned for further progress - both in 2026 and in the longer term.

John Mills

March 24, 2026

Financial review

Group revenue for continued operations for the year ended 31 December 2025 was £60.1 million (2024: £53.8million). Adjusting for currency and discontinued operations, revenue growth was 12%, driven primarily by a 22% increase in printhead revenue. Gross margin improved to 40% (2024: 37%), supported by enhanced manufacturing yields, efficiency improvements and a more favourable product mix.

Adjusted Profit before tax ("aPBT") was £0.8 million (2024: loss (£1.0) million). Operational enhancements enacted in 2024 lowered costs and improved overhead absorption. Basic (loss) per share was (4.3) pence (2024: (13.7) pence). Adjusted earnings per share was 1.1 pence (2024: loss (0.7) pence). Gross profit for the year was £23.7 million (2024: £19.6 million), reflecting better operational performance and favourable product mix. These gains supported overall margin expansion and improved operating leverage across the Group.

The year ended with net cash of £4.9 million (2024: £8.2 million). Much more focus has been given to working capital management with a particular emphasis on setting the conditions to consistently increase stockturn in the future. Forecast accuracy is now being measured with a view to reducing buffer stocks yet still maintaining good component availability. Cash inflows were partially offset by £1.6 million of lease payments (2024: £1.2 million) and capital expenditure of £2.0 million (2024: £0.9 million). Xaar continues to operate with no long-term structural debt, maintaining strong liquidity and the flexibility to invest. Total assets decreased modestly to £78.3 million (2024: £81.3 million), driven by reduction in cash. Inventories decreased slightly at £26.6 million (2024: £27.2 million), whilst trade receivables were £9.3 million (2024: £8.1 million).

Total operating expenditure was £17.9 million (2024: £16.0 million) which includes a £1.8 million bonus accrual (2024: £nil). Sales and marketing costs were £5.1 million (2024: £4.6million), reflecting cost discipline and improved digital engagement. General and administrative expenses were £12.8 million (2024: £11.4 million).

The transition of FFEI manufacturing to Huntingdon delivered a full year of cost benefits, and the closure of the Hemel Hempstead site further simplified our operational footprint. Combined, these actions lowered our cost base and contributed to improved divisional profitability.

Research & Development

Gross Group R&D investment totalled £4.7 million, representing 8% of revenue (2024: £4.3 million; 8%), keeping us within our target range of 8-10%. Investment shifted further toward application-led development, OEM integration and enhancements to fluid management and platform reliability.

Financing

The Group has finalised an enlarged Revolving Credit Facility with its bankers, increasing the facility from £5 million to £10 million together with an uncommitted £5 million "accordion" facility. The formal approval was received 19 March 2026.

Divisional Results

Printhead

Printhead revenue increased to £43.0 million (2024: £35.2 million), with ceramics revenue decreased by £0.6 million, marking a slowing in the rate of decline from this legacy market.

	2025	2024	Variance %
Revenue	£43.0m	£35.2m	22%
Gross Margin %	41%	38%	3%
aOperating Profit	£5.7m	£3.0m	88%
aPBT	£5.5m	£2.7m	105%

Megnajet

Megnajet generated £2.6 million in revenue, up 2% year‑on‑year. Intra‑Group sales rose by 38%, reinforcing Megnajet's importance in supporting system reliability, fluid‑management performance and printhead platform commercialisation to the Group.

	2025	2024	Variance %
Revenue	£2.6m	£2.5m	2%
Gross Margin %	44%	51%	(7%)
aOperating Profit	£0.8m	£1.1m	(27%)
aPBT	£0.9m	£1.2m	(28%)

Engineered Printing Systems (EPS)

EPS revenues were £14.5 million, falling 10%, as the business underwent a period of review under new management. A major multiyear engineering programme did not repeat in 2025, and there was general customer caution around new equipment purchases.

During the year, the business implemented a targeted restructuring programme focused on strengthening project execution, improving cost discipline and widening the customer pipeline.

	2025	2024	Variance %
Revenue	£14.5m	£16.1m	(10%)
Gross Margin %	36%	31%	5%
aOperating Profit	£1.3m	£1.2m	11%
aPBT	£1.3m	£1.2m	11%

Taxation

The Group recognised a total tax credit from continuing operations of £0.2 million (2024: £0.8 million). The underlying effective tax rate was 6.3% (2024: 6.6%).

As previously disclosed, historic overseas tax liabilities (primarily indirect taxes) estimated at £2.7 million, were identified during a review of local compliance processes which will be settled over the next two years. These non-recurring items are not expected to impact future trading.

Dividend and Reserves

Shareholder equity closed the year at £56.3 million (2024: £59.9 million). Retained earnings were £11.9 million (2024: £14.8 million), and foreign exchange translation movements totalled (£0.2) million (2024: £0.1 million). No dividend has been declared for 2025, reflecting our commitment to reinvestment in technology, operational capability and long-term capacity expansion.

Capital Expenditure

Capital expenditure for the year totalled £2.0 million (2024: £0.9 million), with investment concentrated on manufacturing capacity, ink delivery systems, back end printhead capability and platform development to support expected order growth.

Finance and Treasury Policy

Xaar's treasury activities are managed centrally under Board oversight, with the primary objective of safeguarding liquidity, managing financial risk, and supporting the Group's operational and strategic requirements. The function operates within a clear policy framework designed to limit the Group's exposure to short‑term currency fluctuations.

The Group finances its operations through a combination of share capital, retained earnings and, where appropriate, bank facilities. The Group has adequate committed facilities in place to support trading and investment.

Paul James

March 24, 2026

CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2025
		Year ended 31 December 2025					Year ended 31 December 2024 (restated)*
		Adjusted			Adjusting Items**	Total	Adjusted	Adjusting Items**	Total
	Notes	£'000			£'000	£'000	£'000	£'000	£'000
Revenue	2			60,055	-	60,055	53,754	-	53,754
Cost of sales				(36,363)	-	(36,363)	(34,128)	-	(34,128)
Gross profit				23,692	-	23,692	19,626	-	19,626
Selling, general and administrative expenses	4			(17,868)	(4,564)	(22,432)	(15,972)	(8,559)	(24,531)
Research and development expenses	4			(4,676)	549	(4,127)	(4,260)	147	(4,113)
Operating profit / (loss)				1,148	(4,015)	(2,867)	(606)	(8,412)	(9,018)
Finance income				67	-	67	85	-	85
Finance costs				(461)	-	(461)	(439)	-	(439)
Profit / (Loss) before tax from continuing operations				754	(4,015)	(3,261)	(960)	(8,412)	(9,372)
Tax credit / (charge)				109	133	242	277	538	815
Profit / (Loss) for the year from continuing operations				863	(3,882)	(3,019)	(683)	(7,874)	(8,557)
Loss from discontinued operations after tax				(18)	(354)	(372)	1,225	(3,489)	(2,264)
Loss for the year				845	(4,236)	(3,391)	542	(11,363)	(10,821)
(Loss) / earnings per share - Total	3
Basic earnings / (loss) per share				1.1		(4.3)	0.7		(13.7)
Diluted earnings / (loss) per share				1.1		(4.3)	0.6		(13.7)
(Loss) / earnings per share - Continuing operations	3
Basic earnings / (loss) per share				1.1		(3.8)	(0.9)		(10.8)
Diluted earnings / (loss) per share				1.1		(3.8)	(0.9)		(10.8)

* Refer to Note 7 for prior year restatement details.
** Further information on adjusting items is included in Note 4.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2025
	Year ended 31 December 2025	Year ended 31 December (restated)* 2024
	£'000	£'000
Loss for the year attributable to the equity of the shareholder of the parent	(3,391)	(10,821)
Items that may be reclassified to the income statement in subsequent years
Exchange gains/(losses) on translation of foreign operations	(238)	88
Other comprehensive expense for the year	(238)	88
Total comprehensive expense for the year	(3,629)	(10,733)

Total comprehensive (expense) / income for the year attributable to equity shareholders of the parent arises from:
Continued operations	(3,257)	(8,469)
Discontinued operations	(372)	(2,264))
	(3,629)	(10,733)

* Refer to Note 7 for prior year restatement details.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2025
	31 December 2025	31 December 2024 (restated)*	31 December 2023 (restated)*
	£'000	£'000	£'000
Non-current assets
Goodwill	6,576	6,959	6,873
Other Intangible assets	5,677	5,136	7,366
Property, plant and equipment	12,625	12,490	14,529
Right of use asset	4,193	4,734	7,826
Deferred tax asset	1,734	1,548	1,134
Financial asset at fair value through profit or loss	2,672	3,063	8,277
Non-current financial assets	100	104	136
	33,577	34,034	46,141
Current assets
Inventories	26,559	27,236	31,035
Trade and other receivables	9,320	8,084	8,802
Contract assets	514	1,018	2,156
Current tax receivable	1,080	346	306
Financial asset at fair value through profit or loss	1,862	1,854	2,322
Cash and cash equivalents	5,349	8,711	7,135
	44,684	47,249	51,756
Total assets	78,261	81,283	97,897
Current liabilities
Trade and other payables	(11,158)	(8,782)	(9,568)
Deferred consideration	-	-	(2,115)
Provisions	(3,655)	(3,794)	(4,022)
Contract liabilities	(1,533)	(1,986)	(2,369)
Borrowings	(475)	(557)	(1,403)
Lease liabilities	(701)	(1,218)	(1,800)
	(17,522)	(16,337)	(21,277)
Net current assets	27,162	30,912	30,479
Non-current liabilities
Lease liabilities	(4,195)	(4,710)	(6,898)
Provisions	(250)	(300)	(300)
Other payables	(15)	-	-
	(4,460)	(5,010)	(7,198)
Total liabilities	(21,982)	(21,347)	(28,475)
Net assets	56,279	59,936	69,422
Equity
Share capital	7,982	7,948	7,923
Share premium	30,011	30,011	29,950
Own shares	(1,125)	(566)	(566)
Translation reserves	1,277	1,515	1,427
Other reserves	6,256	6,256	6,256
Retained earnings	11,878	14,772	24,432
Total equity	56,279	59,936	69,422

* Refer to Note 7 for prior year restatement details.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2025

	Share capital	Share premium	Own shares	Translation reserve	Other reserves	Retained earnings	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance as at 1 January 2024 reported	7,923	29,950	(566)	1,318	6,256	26,624	71,505
Restatement	-	-	-	109	-	(2,192)	(2,083)
Balance as at 1 January 2024 restated*	7,923	29,950	(566)	1,427	6,256	24,432	69,422
Loss for the year*	-	-	-	-	-	(10,821)	(10,821)
Other comprehensive income*	-	-	-	88	-	-	88
Total comprehensive income	-	-	-	88	-	(10,821)	(10,733)
Issue of ordinary shares	25	61	-	-	-	-	86
Exercise of share options	-	-	-	-	-	(18)	(18)
Share-based payments	-	-	-	-	-	1,179	1,179
Balance as at 31 December 2024 restated*	7,948	30,011	(566)	1,515	6,256	14,772	59,936
Loss for the year	-	-	-	-	-	(3,391)	(3,391)
Other comprehensive income	-	-	-	(238)	-	-	(238)
Total comprehensive income	-	-	-	(238)	-	(3,391)	(3,629)
Issue of ordinary shares	34	-	-	-	-	-	34
Purchase of ordinary shares	-	-	(900)	-	-	-	(900)
Exercise of share options	-	-	341	-	-	(375)	(34)
Share-based payments	-	-	-	-	-	872	872
Balance as at 31 December 2025	7,982	30,011	(1,125)	1,277	6,256	11,878	56,279

*Refer to note 7 for prior year restatement details

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2025
	Year ended               31 December 2025		Year ended 31 December 2024
	Notes	£'000	£'000
Adjusted cash generated/(utilised) by operations	6	4,458	6,796
Exceptional cash outflows		(2,654)	(803)
Net income taxes (paid) / received		(27)	605
Net cash inflow/(outflow) from operating activities		1,777	6,598
Investing activities
Interest income received		145	134
Purchases of property, plant and equipment		(1,950)	(936)
Proceeds from sale of property, plant and equipment		4	-
Purchases of intangible assets		(998)	(86)
Cash earn-out received from financial assets at FVTPL		207	120
Net cash (outflow)/inflow from investing activities		(2,592)	(768)
Financing activities
Proceeds from issue of shares		-	69
Purchase of own shares		(900)	-
Lease payments		(1,603)	(1197)
Interest paid		(128)	(87)
Net (outflows) inflows from invoice discounting facility		(82)	(941)
Payment of deferred consideration		-	(2,133)
Net cash outflow in financing activities		(2,713)	(4,289)
Net increase/(decrease) in cash and cash equivalents		(3,528)	1,541
Cash and cash equivalents at beginning of year		8,711	7,135
Effect of foreign exchange rates		166	35
Cash and cash equivalents at end of year		5,349	8,711
Borrowings at end of year		(475)	(557)
Net Cash at the end of the year		4,874	8,154

FOR THE YEAR ENDED 31 DECEMBER 2025

1.   Presentation of the financial information

A)    General information

Xaar plc (the Company, and together with its subsidiaries, the Group) is a public limited company whose shares are listed on the London Stock Exchange, is incorporated and domiciled in the UK and is registered in England under the Companies Act 2006.

B)    Basis of preparation

The consolidated financial statements have been prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006.

The consolidated financial statements include the results of the Company and its subsidiaries (together 'the Group'). The Group's directly and indirectly held subsidiary undertakings are disclosed in note C6 to the company financial statements.

The consolidated financial statements have been presented in Sterling, the functional and presentational currency of the Company. Certain Group subsidiary entities have functional currencies other than Sterling. The financial position and performance of all such subsidiary entities is translated into the presentational currency (Sterling) in accordance with the foreign currencies accounting policy as detailed in Note 1.

The consolidated financial statements have been prepared under the historical cost convention as modified for the revaluation of certain financial instruments. All values are rounded to the nearest thousand pounds (£'000) except when otherwise indicated.

C)    Alternative performance measures

The alternative performance measures (APMs) used by the Group adjust for both recurring and non-recurring items that the Directors consider are not reflective of the underlying performance of the Group. Recurring items are adjusted each year irrespective of materiality to ensure consistent treatment.

The Directors believe that the 'adjusted profit before tax' and 'adjusted earnings per share' measures presented provide a consistent presentation of the Group's underlying operational performance. They also present shareholders with a clearer insight of performance metrics used by the Chief Operating Decision Maker and mitigate volatility for example resulting from exchange rate fluctuations, resulting from external factors that are not influenced by the Group.

These measures are not defined under IFRS; therefore, they may not be directly comparable with the 'adjusted' profit measures of other companies.

Adjusting items are defined as follows:

-     fair value gains or losses on financial assets at FVTPL;

-     restructuring and transaction expenses;

-     amortisation of intangible assets arising on business combinations;

-     foreign exchange gains or losses arising on intra-group transactions;

-     research and development expenditure credits and patent box tax credits;

-     share-based payments charges and employer's tax contributions thereon;

-     asset impairment outside of the ordinary course of business;

-     legal provisions;

-     start up costs of new ventures and

-     the tax effect of the aforementioned adjusting items.

D) Going Concern

The consolidated financial statements are prepared on a going concern basis. Having considered the Group's forecast financial performance and cash flows, and after making appropriate enquiries, the Directors have a reasonable expectation that the Group has adequate financial resources to continue in operational existence for the foreseeable future and for at least one year from the date that these consolidated financial statements are signed. For these reasons, they continue to adopt the going concern basis in preparing the consolidated financial statements. Accordingly, these financial statements do not include any adjustments to the carrying amount or classification of assets and liabilities that would result if the Group were unable to continue as a going concern.

In preparing forecasts Xaar considers all external factors that could impact on financial performance and makes appropriate allowances for these. The forecast informing the decision to prepare the consolidated financial statements on a going concern basis considered, among other things; the likelihood of inflationary pressures resulting from macro-economic factors, and the unrest in Ukraine & Gaza and the wider Middle East. The impact of tariffs continues to be evaluated and we are working closely with our customers, suppliers and advisors to navigate and mitigate impacts in this area. Furthermore, forecasts have been subject to sensitivities to assess the impact on revenue generation, profitability and liquidity of wider market disruption in certain customer and supplier markets and uncertainty in timing of revenues expected from significant strategic opportunities.

A reverse stress test has been performed to model the circumstances required to eliminate available liquidity during the going concern period, this includes reducing revenues. This reverse stress scenario would require a reduction in Group revenue in excess of 20% in comparison to the base case, before considering any significant mitigating actions, The Directors believe the possibility of this combination of severe downsides arising to be remote given the recurring revenue base, visibility of committed orders and expected new revenue streams secured from products known to be launching by OEMs throughout 2026.

In the unlikely event of such a scenario materialising, the Group has a range of mitigating actions, focused on reducing the Group's cost base, that could be taken to avoid a liquidity shortfall. Namely, deferring non-committed capital expenditure, delaying, or suspending research and development expenditure, and/or ultimately even making headcount reductions. It is worth noting that such actions would only be required in the event of an extreme downside scenario.

The Group is continuously monitoring and mitigating, where possible, the impacts of such risks. There is a high degree of predictability within the Group's short-term cash flows as they reflect existing technologies and products, existing OEM adoption and the committed order pipeline. The level of sensitivity testing, and reverse stress testing performed is proportionate to this level of predictability.

The Group continues to have a net current assets position and maintains sufficient financial resources as at 31 December 2025. These consisted of cash and cash equivalents of £5,349,000 as well as £5,000,000 of committed, but undrawn, banking facilities made available under a revolving credit facility agreement. Post year end in March 2026 this revolving credit facility was extended for a further three years to June 2029 and increased to £10,000,000. The revolving credit facility is subject to leverage, interest cover and capital expenditure threshold covenants. In addition, to support the Group's working capital position, alongside the above core banking facilities, the Group also has access to ancillary funding arrangements in the form of an invoice discounting facility, of which £475,000 of the total £3,000,000 committed facility was utilised as at 31 December 2025.

2. Operating segments

The Group's operating segments are determined based on the internal reporting to the Chief Operating Decision Maker (CODM).  The CODM has been determined to be the Chief Executive Officer, with support from the other members of the Board of Directors, being the individual who is primarily responsible for the allocation of resources to segments and the assessment of performance of the segments.

The principal activities of the Group are presented in the following segments: 'Printhead', 'EPS', 'Megnajet' and the discontinued 'FFEI'. This presentation reflects how the Group's operating performance is reviewed internally by management.

In 2024 the 'FFEI' business unit was reorganised into two separate major lines of business, Life Sciences and Printbar. The Printbar part of FFEI was gradually integrated with Printhead and Life Sciences part of the business was gradually reduced until finally being abandoned in Q1 2025. The FFEI segment has been restated to include only the discontinued operations. Refer discontinued operations note 5.

Year ended 31 December 2025	Printhead	Engineering Print Solutions	Megnajet	Head office Entities	Total Continuing	Discontinued - FFEI	TOTAL
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Revenue - total	44,420	14,460	3,779	-	62,659	314	62,973
Revenue - intra segment	(1,390)	-	(1,214)	-	(2,604)	-	(2,604)
Revenue - external	43,030	14,460	2,565	-	60,055	314	60,369
Adjusted operating profit/(loss)	5,712	1,341	799	(6,704)	1,148	(60)	1,088
Adjusting items [note 7]	(200)	(1,129)	(355)	(2,331)	(4,015)	(360)	(4,375)
Operating profit/(loss)	5,512	212	444	(9,035)	(2,867)	(420)	(3,287)

Year ended 31 December 2024	Printhead*	Engineering Print Solutions	Ink Supply Systems (Megnajet)	Head office Entities	Total Continuing	Discontinued - Digital Imaging (FFEI)*	TOTAL
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Revenue - total	37,075	16,807	3,417	-	57,299	7,654	64,953
Revenue - intra segment	(1,908)	(731)	(906)	-	(3,545)	-	(3,545)
Revenue - external	35,167	16,076	2,511	-	53,754	7,654	61,408
Adjusted operating profit/(loss)	3,045	1,211	1,093	(5,955)	(606)	1,273	667
Adjusting items	(772)	(867)	(363)	(6,410)	(8,412)	(3,481)	(11,893)
Operating profit/(loss)	2,273	344	730	(12,365)	(9,018)	(2,208)	(11,226)
*Restated Printhead to include the printbar part of the continuing operations migrated from FFEI - refer note 5.

3. Earnings per share

Basic earnings per share and adjusted basic earnings per share are calculated by dividing the earnings attributable to the equity shareholders of the Company by the weighted average number of shares outstanding during the year. Diluted earnings per share and adjusted diluted earnings per share are calculated on the same basis as basic earnings per share but with a further adjustment to the weighted average number of shares outstanding to assume conversion of all potentially dilutive ordinary shares. Such potentially dilutive ordinary shares comprise share options and awards granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the year and any unvested shares which have met, or are expected to meet, the performance conditions at the end of the year.

		Year ended 31 December 2025	Year ended 31 December 2024 restated*
		£'000	£'000
(Loss)/Profit from continuing operations - adjusted		863	(683)
Adjusting items - continuing operations		(3,882)	(7,874)
(Loss) / profit from continuing operations  - reported		(3,019)	(8,557)
(Loss) / profit from discontinued operations - adjusted		(18)	1,225
Adjusting items - discontinued operations		(354)	(3,488)
(Loss) / profit from discontinued operations -reported		(372)	(2,263)
(Loss) / profit attributable to equity shareholders of the parent - reported		(3,390)	(10,820)
* Refer to Note 7 for prior year restatement details.
		Number	Number
Number of shares
Weighted average number of ordinary shares in issue		79,530,296	79,377,941
Less: ordinary shares held by Xaar Trustee Limited and the Xaar Plc ESOP Trust		(516,739)	(313,201)
Weighted average number of ordinary shares for the purposes of basic EPS		79,013,557	79,064,740
Effect of potentially dilutive ordinary shares - share options and awards		1,058,996	2,581,021
Weighted average number of ordinary shares for the purposes of diluted EPS		80,072,553	81,645,761
		Pence per share	Pence per share*
Basic loss per share - continuing operations		(3.8)	(10.8)
Basic loss per share - discontinued operations		(0.5)	(2.9)
Basic loss per share		(4.3)	(13.7)
Diluted loss per share - continuing operations		(3.8)	(10.8)
Diluted loss per share - discontinued operations		(0.5)	(2.9)
Diluted loss per share		(4.3)	(13.7)
Adjusted basic earnings / (loss) per share - continuing operations		1.1	(0.9)
Adjusted basic earnings per share - discontinued operations		(0.0)	1.5
Adjusted basic earnings per share		1.1	0.7
Adjusted diluted earnings / (loss) per share - continuing operations		1.1	(0.9)
Adjusted diluted earnings per share - discontinued operations		(0.0)	1.5
Adjusted diluted earnings per share		1.1	0.6

4. Adjusting items

The Directors believe that the 'adjusted profit before tax' and 'adjusted earnings per share' alternative performance measures presented provide a consistent presentation of the Group's underlying operational performance. They also present shareholders with a clearer insight of performance metrics used by the Chief Operating Decision Maker and mitigate volatility, resulting from external factors that are not influenced by the Group.

These items are as defined below and have been presented consistently in both the current and prior year.

	Year ended 31 December 2025			Year ended 31 December 2024
		£'000		£'000
Share-based payment charges	(i)	(831)	(980)
Exchange (losses)/gains on intra-group transactions	(ii)	(463)	110
Restructuring and transaction expenses	(iii)	(2,197)	(730)
Research and development expenditure tax credits	(iv)	549	147
Fair value losses on financial assets at FVTPL	(v)	(182)	(5,561)
Amortisation of intangible assets arising on business combinations	(vi)	(330)	(530)
Impairment of contract assets	(vii)	-	(514)
Legal provision	(viii)	(27)	(191)
System implementation	(ix)	(461)	(163)
System implementation	(x)	(73)	-
Affecting operating profit and profit before tax		(4,017)		(8,412)
Tax effect of adjusting items		133		538
Total adjusting items after tax		(3,882)		(7,874)

(i)    Comprises total share-based payment charges of £886,000 (2024: £1,182,000) partially offset by an accrual release of £31,000 (2024: release of £85,000) for the associated employer's social security contributions and are included in selling, general and administrative expenses. Further excluded from the table above is discontinued operations impact of £24,000 (2024: £117,000)

(ii)   Comprises exchange gains or losses as a result of USD denominated intra-group loans between UK and US entities.  Such costs are included in selling, general and administrative expenses.

(iii)  Comprises redundancy related costs of £1,028,000 (2024: £1,132,000), Group's operational efficiency programs £944,000 (2024: £14,000 credit), start up costs relating to the group China expansion of £225,000 (2024: £Nil) and M&A transaction costs of £nil (2024: £182,000). Such costs are included in selling, general and administrative expenses.

(iv)  Comprises UK corporation tax relief relating to qualifying research and development expenditure.  During year ended 31 December 2025, £549,000 (2024: £134,000) related to XaarJet Limited and £nil (2024:£81,000) related to FFEI Limited. These credits are included in research and development expenses.

(v)   Comprises the fair value movement on contingent consideration that arose on the Group's divestment of Xaar 3D Limited. Such amounts are included in selling, general and administrative expenses. Refer to Note 28 for further information.

(vi)  The intangible assets consist of the software, patents and customer relationships recognised on acquisition of FFEI Limited in 2021 and the customer relationships and brand value recognised on acquisition of Megnajet Limited in 2022.  These costs are included in selling, general and administrative expenses.

(vii) During 2024 it became apparent that we would be unable to collect the full contract value on a contract which commenced in 2021 in our Product Print systems business segment. This contract was therefore impaired to the expected recoverable amount. No profits have been recognised on this contract in the current or preceding year.

(viii)                A legal matter provided for in the 2024 annual report dating back to 2021. £27,000 has been recognised as an expense the current year (2024: £191,000). A cash settlement of £278,000 was made during the 2025 year and a true up made in this regard.

(ix)  During 2025, the Directors identified certain indirect tax liabilities to settle in an overseas jurisdiction. The recognised provision, comprised of the tax liability calculated and imputed interest amounts to £2,700,000. Legal and consultants' fees incurred in 2025 amount to £396,000 (2024: nil), a further £65,000 is an increase to the provision raised to cover indirect tax and interest. Prior year has also been restated, refer Note 7.

(x)   Comprises the costs incurred for the implementation of a new reporting software application and payroll software migration.

5. Discontinued operations

In 2024 the 'Digital Imaging' business unit (FFEI Limited) was reorganised into two separate major lines of business, Life Sciences and Printbar. The Printbar part of the business was gradually migrated to Xaar Jet Limited for efficiency reasons and the Life Sciences part business which was gradually reduced until finally being abandoned in Q1 2025.

The abandonment of Digital Imaging represents a discontinued operation as per IFRS 5, as such the following statements and notes have been restated:

- Consolidated income statement

- Consolidated cashflow statement

- Note 2 (operating segments)

- Note 3 (earnings per share)

Due to the integrated nature of the support functions whilst Digital Imaging was operating both Printbar and Life Sciences, the Group was unable to directly isolate all expenses and cashflows of the discontinued operation. Accordingly, all items which are not revenue have been allocated on a basis of the proportion of revenue attributable to the discontinued operation.

Management believes these allocations provide a reasonable approximation of the financial performance of the discontinued operation.

	Year ended 31 December 2025					Year ended 31 December 2024
	Adjusted			Adjusting Items	Total	Adjusted	Adjusting Items	Total
	£'000			£'000	£'000	£'000	£'000	£'000
Revenue			314	-	314	7,654	-	7,654
Cost of sales			46	-	46	(5,063)	-	(5,063)
Gross profit			360	-	360	2,591	-	2,591
Selling, general and administrative expenses			(154)	-	(154)	(996)	81	(915)
Research and development expenses			(266)	(360)	(626)	(322)	(3,563)	(3,885)
Operating loss			(60)	(360)	(420)	(1,273)	(3,482)	(2,209)
Finance income			78	-	78	49	-	49
Finance costs			(16)	-	(16)	(56)	-	(56)
Profit / (Loss) before tax			2	(360)	(358)	1,266	(3,482)	(2,216)
Tax credit / (charge)			(20)	6	(14)	(41)	(7)	(48)
Total loss for the year			(18)	(354)	(372)	1,225	(3,489)	(2,264)

6. Note to cash flow statement

		31 December 2025	31 December 2024
		£'000	£'000
Loss before tax from continuing operations		(3,261)	(9,372)
Loss before tax from discontinued operations		(358)	(2,216)
Loss before tax:		(3,619)
Adjustments for:
Depreciation and impairment of property, plant and equipment		2,479
Depreciation and impairment of right-of-use assets		774
Amortisation and impairment of intangible assets		443
Research and development expenditure credit		(549)
Net interest expense		331
Unrealised currency translation losses/(gains)		389
Share-based payment charge		855
Fair value loss on financial assets at FVTPL		177
Loss on disposal of property, plant and equipment		111
Loss on disposal of intangible assets		14
Profit on disposal of right of use assets		(8)
Decrease in provisions		(189)
Operating cash flows before movements in working capital		1,208
(Increase)/decrease in inventories		(467)
(Increase)/decrease in receivables		(1,079)
Increase/(Decrease) in payables		2,142	(1,172)
Cash generated by operations		1,804	5,993
Exceptional Cash outflows included above		2,654	803
Adjusted cash generated by operations		4,458	6,796

7. Restatement of prior period

During 2025, the Directors identified certain tax liabilities to settle in an overseas jurisdiction. Following a detailed review with the support of subject matter advisors, we have assessed the present obligation associated with this matter to be approximately £2,713,000 including interest and excluding penalties. These tax liabilities pre-date 2023 by a number of years and as such the adjustment of £2,192,000 to 2023 Retained Earnings is the cumulative impact of 2023 and all previous years. The provision is comprised of the tax liability calculated and imputed interest. Potential penalties in respect of this matter have been disclosed as a contingent liability in line with the requirements of IAS 37.

The errors have been corrected by restating each of the affected financial statement line items for the prior periods as follows:

Consolidated statement of financial position (extract)	31 December 2024	Equity increase/ (decrease)	31 December 2024 (restated)	31 December 2023	Equity increase/ (decrease)	31 December 2023 (restated)
	£'000	£'000	£'000	£'000	£'000	£'000
Current provisions	(951)	(2,843)	(3,794)	(1,385)	(2,637)	(4,022)
Deferred tax asset	951	597	1,548	580	554	1,134
Translation reserved	1,440	75	1,515	1,318	109	1,427
Retained Earnings	17.093	(2,321)	14,772	26,624	(2,192)	24,432
Total Equity	62,182	(2,246)	59,936	71,505	(2,083)	69,422

Consolidated income statement (extract)	2024 Reported	Reclassified to Discontinued operations*	Profit increase / (decrease)	2024 Restated
	£'000	£'000	£'000	£'000
Selling, general and administrative expenses	(28,253)	3,884	(163)	(24,532)
Operating (loss) / profit	(11,064)	2,209	(163)	(9,018)
(Loss) / profit before tax	(11,425)	2,216	(163)	(9,372)
Tax credit	733	48	34	815
(Loss) for the year attributable to the equity shareholder of the parent	(10,692)	-	(129)	(10,821)

Statement of comprehensive income (extract)	2024 Reported	Reclassified to Discontinued operations*	Profit increase / (decrease)	2024 restated
	£'000	£'000	£'000	£'000
Loss for the year attributable to the equity shareholders of the parent	(10,692)	-	(129)	(10,821)
Exchange gains / (losses) on translation of foreign operations	122	-	(34)	88
Total Comprehensive (expense) for the year	(10,570)	-	(163)	(10,733)

 

END