DAVY VIEW

Xaar has delivered a better-than-expected adjusted profit before tax (PBT) out-turn in H124. Encouragingly, full year guidance has been maintained. Management has controlled costs as end markets remain mixed. Chinese ceramics-related revenue is down materially year-on-year (yoy), more than offsetting solid progress in other end markets as new product starts to gain traction. OEM new product launches are set to increase in 2025. We make minor revisions to our FY26E profit forecasts. We continue to expect strong yoy revenue and profit growth in FY26E and FY27E. We maintain our ‘Outperform’ rating and 165p price target.