Interim Trading Update

Xaar plc ("Xaar"), the inkjet printing technology group headquartered in Cambridge, presents an update on trading performance for the period ended 30 June 2010.

Trading

In line with the Board's expectations, revenues for the first half of 2010 were ahead of the same period last year.  Sales of the group's Platform 1 ("P1") products have remained relatively stable, and demand for Platform 3 ("P3") products has continued to increase significantly.   The first stage of production capacity increase for P3 products is underway and we are reviewing the scale, timing, and potential impacts of further production capacity increases.

As previously reported, we have continued to incur some additional costs associated with stabilising products introduced over the last few years.  Whilst these costs have run at a higher level than expected in the first half of the year, negatively impacting gross margin, we have seen a marked improvement in Q2 over Q1.  We expect the level of these costs to continue to reduce in the second half which will enable us to achieve market expectations for the full year.

Cash

Net cash and cash equivalents at 30 June 2010 were approximately £8.2m (31 December 2009: £11.1m, 30 June 2009: £10.3m) after approximately £2.8m of capital expenditure and £0.9m of dividends paid in the period.

Dividend

It is the Board's intention to pay an interim dividend, details of which will be provided at the time of the announcement of the interim results.

Announcement of final results

The detailed results for the six months ended 30 June 2010 will be announced, in accordance with Xaar's normal timetable, on 18 August 2010.

Ends

Contacts

Xaar plc:
Ian Dinwoodie, Chief Executive
Andrew Taylor, Finance Director
01223-423663
www.xaar.com

Singer Capital Markets Limited:
Shaun Dobson
020-3205-7626

Bankside Consultants:
Simon Bloomfield
020-7367-8888