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Published on: March 26, 2024

Final results in-line and no further deterioration

Xaar’s final results for FY23 are in line with revised guidance. The figures feature adjusted EBITDA at £6.4m (FY22: £6.2m), with good performance from EPS, FFEI and Megnajet. This was achieved despite a weak end market that delayed product debuts and affected H2 23 and Q1 24 revenue. The reported PBT loss of £2.4m reverses last year’s £0.8m profit, but pleasingly Xaar sees no further deterioration. CEO John Mills concludes that while the external trading environment ‘remains challenging’, the product portfolio continues to generate ‘strong interest from customers’. We maintain FY24 forecasts and introduce FY25 estimates. In our view, the medium- and longer-term outlook is nudging better, with the inventory unwind boosting FY24 working capital. Shares have suffered following the November warning (YTD TSR -4.8% vs sector 0.2%), but with no further deterioration the FY print is a calming balm. Some investors might await news of a more favourable backdrop; some will buy the pullback as others are fearful.

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