The impact of the serious decline in its legacy business for the ceramics market was writ large across the results for 2018, with group sales down 37% at £63.5m. The company posted a bottom line loss of £14.9m compared to the prior year’s pre-tax profit of £12.3m.
Integration and quality issues also contributed to the red ink.
The manufacturer cut more than 100 jobs last year, and said that headcount in its printhead business had been reduced by 42% in the last three years.
Although the bad news had been expected following Xaar’s well-documented travails, shares in the business fell to 115.7p on the news, a five-year low, as the group also revealed it would axe its final dividend.
Chief executive Doug Edwards said: “Obviously we are not happy with the results, but they are in line with what we’ve been saying for a while.
“We are trying to move the business to having more diverse revenue streams. You can see the vulnerability of becoming a business dependent on a single product, which we were.”
Edwards said the current sales mix was “a lot more diverse”.
“Our ultimate aim is to build a sustainable business. New things represent nearly 80% of revenues today,” he added.
Xaar announced a strategic review to achieve “more extensive partnering” last September.
Its two key partners are currently Xerox for bulk printheads and Ricoh for Thin Film printheads.
Edwards said the most important area of focus was its Thin Film printhead “where scale is an essential ingredient for success” and the group aims to find a suitable strategic investor this year.
“We’re looking to do it in the same way as we have in 3D, with a separate entity and equity investment, and strong go-to-market with scale,” he explained.
“We need a partner with scale, who’s also playing in the consumer and office market as that’s where the scale is.”
Xaar set up a joint venture with Stratasys for 3D printing last summer.
With both Ricoh and Xerox potentially fitting the bill for the hoped-for printhead alliance, Edwards commented: “Yes they could, but there are others. I can’t be specific about names at this time”.
“It needs to be resolved this year. Thin Film has involved a very significant investment and we have to find resolution this year."
Separately, the company has 20 OEM partners in the process of integrating its 5601 printhead in printers for packaging, commercial print, textiles and décor.
“Once integrated then we can start to scale rapidly. Some of these printers can have a couple of hundred heads in them, so it can ramp up very rapidly,” Edwards said.
“We are on a transformation journey but have had a bit of a blip getting there.”