Sales warning wipes £156m off Xaar stock
PRINTING group Xaar led the FTSE 250 fallers yesterday, after warning that its revenues for the year would miss expectations.
The firm said its ceramic tile division, the largest part of the business, had been hit by increased competition.
Xaar’s shares tumbled 27.7 per cent on the news that 2014 revenues are set to fall by three per cent to £130m, rather than grow eight per cent to £145m as analysts had expected.
“Total sales in 2014 into ceramics are now expected to be lower than 2013, with average sales price being negatively impacted by an increased level of competition, and sales from new products only expected to begin to contribute in the latter part of the year,” Xaar said in a statement.
The Cambridge-based company also said it expected to see its operating profit margin fall six percentage points from the 30 per cent it achieved in 2013.
Addressing the change to expected revenues, Jefferies analyst Andy Douglas said: “This will be the focus for investors in the near-term, although there are also a number of positives in the statement. We do, however, recognise these are considerably outweighed by the negatives within the update.”