Major shake-up and shake-out at Xaar

Former Inca Digital chief John Mills is to replace Doug Edwards as CEO of Xaar amid a restructuring that will see it close its Thin Film printhead business and shake-up its board - chairman Robin Williams and CFO Shomit Kenkare are also going. The news was released as the company posted its interim report for the six months ended 30 June 2019, which showed a £2.6m gross loss for the period.

Revenue in the first half of the year was £22.5m, a decline of £12.8m compared to the first half of 2018. In his chairman’s statement Williams said: “Xaar has continued to experience trading losses in the first half of the year, albeit with some stability in the bulk printhead business and good progress at EPS and 3D. We are not generating sufficient cash to fund a development programme of the scale of our Thin Film activities, which are still not close to commercial levels of revenue. Since March we have engaged in a thorough advisor-led process to identify a partner who will provide the scale and funding that this technology requires, being the final step in our strategic review of the printhead business. Despite interest from a number of parties and recognition that the technology has potential, we have not received a deliverable proposal that either shares or acquires this activity in a way that brings the cost of development down to a level which Xaar can sustain within its cash flows. In the absence of additional external investment the board has reluctantly decided to cease Thin Film activities and will consult with employees, customers and suppliers to implement the restructuring and reduce the Xaar headcount accordingly.” Xaar has taken an impairment charges of £39m as a result of the decision to cease all Thin Film activities. Williams - who has been a Xaar board member for over nine years (until October 2016 as non-executive director) - will remain in the role until the announcement of the preliminary results for the year at the end of March 2020. Andrew Herbert, who has been a non-executive director since June 2016, will then become chairman. Mills, who joined Xaar in August as head of the printhead business unit, will replace Edwards as CEO on 31 December, though Edwards will remain available to the company until 31 March 2020 to ensure an orderly transition. Shomit Kenkare - based in the USA and having supported the board with its 3D and Thin Film strategic programmes - has resigned as chief financial officer (CFO) and will leave on 31 December. A replacement is being sought. Margaret Rice-Jones, senior independent director, has also indicated that she will not seek re-election at the 2020 AGM.