Inkjet printhead maker Xaar PLC (LON:XAR) swung to a loss in 2018 as revenue slumped 36.5%, led by a decline in its legacy ceramic business.
The company made a loss before tax of £11.7mln last year, compared to a pre-tax profit of £18.0mln in 2017, largely due to £7mln provisions for slow-moving inventory and past-due debtors.
READ: Xaar warns on full-year revenues after trading in final quarter misses expectations
Revenue dropped to £63.5mln from £100.1mln the previous year, driven by poor performance of printheads used to decorate ceramic tiles.
Revenues were also affected by integration and quality issues with its new Xaar 1201 Thin Film printhead for the wide-format graphics market, which resulted in a slower-than-expected ramp-up of the product.
The group also experienced delays with the introduction of the Xaar 5601 Thin Film inkjet, which is used for printing textiles, laminates, packaging, labels and commercial print.
Xaar said it recognised that it was “some years away from reaching meaningful volumes in Thin Film” and in order to continue to invest in the products it needed strategic investment as well as licensing arrangements.
The group announced a strategic review of its printhead business in September 2018 to address the challenges.
“Following the review conducted in 2018, it has become increasingly clear that in order to realise the full potential of our Thin Film portfolio, we require strategic investment partners to help us achieve the necessary scale,” said chief executive Doug Edwards.
The company said it was in early discussions with “relevant industry parties on a range of potential structures for our Thin Film business”.
Following a tough 2018, Xaar decided against paying a final dividend and said it would keep its dividend policy under review.
In morning trading, shares fell 7.6% to 115.4p.