Revenue increased by 26% over the same period to £86.3m (2011: £68.7m) while gross margin improved to 47% (2011: 44%) and for the first time since 2007 Xaar increased the dividend by 33%. Xaar attributed its record results to the continuing success of its Platform 3 (P3) technology in the digital printing ceramic tile market.
Sales in graphics arts shrank across the year by 28% to £13.1m (2011: 18.1m) although the company said that it had "arrested the decline" in the second half of 2012 with the first recorded revenue increase "for some time". The company said that a significant change was not expected in the sector until the planned release of Xaar 501 GS10 at the end of this year.
Sales into the packaging market grew 3% to £12m, representing 14% of total sales.
Chief executive Ian Dinwoodie said that the growth in sales revenue had been bolstered by the company’s £22m capacity expansion programme at its Huntingdon, Cambridge facility since 2011.
He added: "On the back of the success of our P3 technology and in response to growing demand we will be expanding our manufacturing capacity further than previously announced.
"This should underpin Xaar's growth prospects for both the short and the medium term. P4 research and development spending will accelerate over this period, positioning Xaar to deliver further growth over the longer term horizon."
Looking ahead Dinwoodie said that Xaar expected to continue to be the dominant leaders in the ceramic market and added that he anticipated volumes in label and deco laminates to continue to grow albeit at a slower rate.
He said: "We expect to gain market share back in graphic arts and expect some of the advanced manufacturing processes to start cutting in over the next three to five years. Further on from there we expect our next generation P4 to generate revenue from around 2016/17."
The company invested £8m in R&D in 2012 including a 50% growth in R&D staffing levels and Dinwoodie said: "We have a lot of R&D on the pipelines which will generate strong revenues for us for a long time ahead."
