Xaar shares slide 22% as some Chinese customers investigated over import duties
Xaar plc (XAR.L) said today it has been informed that certain of its Chinese customers, accounting for around 15% of Xaar's total revenue, are being investigated by the Chinese customs authorities over alleged non-payment of import duty.
Xaar itself is not a party to the investigation but is co-operating with customs officials.
The Cambridge-headquartered company’s shares dropped 22% after the news to 121.50p, valuing the company at around £73m. It has been a torrid few months for the inkjet specialist’s shares. In early March they reached almost 340p, but have steadily declined since then, along with but more than other high tech shares.
Xaar was notified by the authorities of the impending investigation on 19th July, the company said in a statement to the London Stock Exchange, but at that time did not consider it would have a material effect on sales.
High growth
“Digital printing is a high profile growth industry in China which has attracted similar investigations before, with little or no impact on the company,” it said.
”It has now become apparent, however, that the current investigation is being coordinated by central customs authorities, rather than by local officials as has previously been the case. This is likely to increase the period of the investigation and its impact on current trading which remains below expectations”.
”It is the company's aim that results for the full year should be similar to those reported for 2005 but, until the current investigation has run its course, it is not possible to quantify accurately the impact it will have on the timing of sales over the remainder of the year”.
A further update will be issued with the interim results which are scheduled for release on 13th September.
9th August
