Cambridge coding and marking technology specialist Xaar plc gave shareholders a welcome boost as its interim results to June 30 painted a brighter picture of the future and predicted a return to profitability in the medium term.

The stock rose almost nine per cent in the UK to within striking distance of the 52-week high as shareholders looked beyond the figures to a strategy they believe will fuel ongoing growth.

First half revenue of £23.7 million was in line with management expectations and consistent with H2 2019, down seven per cent year-on-year while the pre-tax loss was £1.1m compared to £1.29m at this stage last year – a steady performance considering how COVID-19 has blitzed so many global industrial markets.

Xaar reported a strong balance sheet with net cash of £23.9m with working capital reduced by a modest £2.7m in the first half of 2020.

CEO John Mills said solid progress had been made in implementing a new strategy across the business. Specifically, a change in go-to-market strategy for the Printhead business has seen new accounts won and customers re-engaging. 

Mills said the revamped business, backed by a more upbeat brand, meant that the restructured business was well positioned to navigate the current economic climate with a clear product roadmap.

He said: “We are very pleased with these results; they demonstrate the business is on track and our new strategy is working despite the unprecedented economic backdrop. It is particularly gratifying to see us win new business as we re-engage with customers in our core markets.

“There has been a positive reaction by customers and employees alike to our new commercial model. In addition, with the next generation of products in our roadmap and the rollout of our new corporate brand, we believe Xaar has an exciting future.

“The continued short-term impact of the COVID-19 pandemic makes it difficult to assess the performance for the remainder of the year with any certainty. 

“The short-term outlook is positive; with our order book remaining strong across the business coupled with a strong balance sheet and cash position for the group, we are well placed to withstand volatility in the market.

“The success we have had in the first half of the year leaves the business well-positioned. The foundations being laid at present will provide a springboard for future growth and a return to profitability in the medium term.”