Inkjet printing specialist Xaar warns of disappointing Chinese sales after lifting interim profits 20 per cent to £3.75 million pre-tax.

The fully listed company, which hopes its technology will play a leading role in a continuing switch to digital inkjet printing, saw turnover fall £9 million to £22.5 million in the six months to June, largely because of lower than expected sales into the important Chinese market. Despite this, Cambridge-based Xaar managed to increase margins and improve profitability.

However, chairman Phil Lawler says the company now believes sales of its ‘mature’ products to China will also be lower than previously expected in the second half year and warns this time the shortfall ‘will have some effect on second half profitability’.

By contrast, Xaar, which has replaced Panmure Gordon with Landsbanki Securities, reports an encouraging reception of its newer ‘Platforms 2 and 3’ technologies by original printer equipment makers around the world.

Xaar shares, which hit 338p two and a half years ago, have lost two-thirds of their value since then. They now trade at 110.25p, down 11.25p this morning, which puts a £69.3 million price tag on the company.

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