Risk and link to business unit
Risk and impact
Mitigation and developments
Emerging risk and likelihood/magnitude change since 1 January 2025
Operational
Competition
Risk:
Failure to continually improve products and services leading to loss of market share or price reduction, resulting in lower profit margins. As the only independent printhead company competing with vertically integrated, large-scale multinational companies, we continue to face significant competitive pressures.
Potential impact:
Loss of market share to competitors could reduce sales volumes and adversely affect the Group's financial results. Our position as an independent supplier competing against vertically integrated companies creates ongoing margin pressure and limits our ability to compete on scale.
Mitigation:
We continue to re-align our go-to-market capabilities to deliver better results for our OEMs and invest in our technical solutions offering, alongside continual monitoring of our cost base to ensure we remain competitive.
Developments in 2025:
Factory cost controls have been increased to improve our competitive position. The inkjet landscape remains challenging with competitors constantly evolving new products and discounting to take existing and new customers.
Emerging risk:
Increased consolidation among competitors could further intensify competitive pressures.
Likelihood:
Unlikely
Magnitude:
Very High \u2013 no change to risk score
Market requirements
Risk:
Products need to meet the changing demands of the market, including regulatory changes. Failure to meet future market requirements and specifications could impact our long-term revenue and profit.
Potential impact:
Inability to adapt to changing market requirements could result in product obsolescence, loss of customers and reduced revenue streams. Regulatory changes in key markets could require significant product modifications or render existing products non-compliant.
Mitigations:
Regular reviews are held within the Group to assess current and anticipated market requirements, including regulatory changes. R&D activity is managed with systematic assessment of progress against project timelines and milestones to ensure that we maintain our competitive edge for time to market for our new products. In addition, we engage with customers regularly for feedback to continue our development of a culture of innovation, focusing on delivering technical solutions to OEM requirements.
Developments in 2025:
The R&D team have engaged with customers to resolve specific technical issues during their product development work and the commercial team has been strengthened. Issues with ink development projects have been resolved by partnering with ink manufacturers and the successful development of flat tone projects has been achieved following CEO discussions with customersEmerging risk:
Accelerating pace of technological change in digital printing could outpace our development capabilities.
Likelihood:
Possible
Magnitude:
Very High \u2013 no change to risk scoreRisk and link to business unit
Risk and impact
Mitigation and developments
Emerging risk and likelihood/magnitude change since 1 January 2025
Commercialising new products
Risk:
Failure to test new products under all relevant application conditions could lead to unexpected costs and loss of reputation due to quality failures.
Potential impact:
Product failures in the market could result in warranty claims, customer dissatisfaction, reputational damage and potential liability claims. This could adversely affect future sales and the Group's market position.
Mitigations:
New products are thoroughly tested before launch with improved product testing and QA phases of development now implemented. Xaar's manufacturing facilities remain ISO 9001 accredited and we continue to develop our plans for continuous improvement to ensure optimisation of operations. We maintain comprehensive quality assurance systems and procedures at each site. We regularly review and investigate incompatibilities for all new products with customers to ensure they are supported.
Developments in 2025:
The R&D team have engaged with customers to resolve specific technical issues during their product development work. Field service capability has been increased to help the adoption of new products by customers. Challenges remain with high viscosity inks in terms of key specification parameters such as resolution and firing frequency.
Emerging risk:\u00a0
Increasing customer expectations for faster product development cycles could compromise thorough testing procedures.
Likelihood:\u00a0
Possible
Magnitude:\u00a0
Very High \u2013 no change to risk score
M&A opportunities
Risk:
Our strategy continues to be driven primarily by organic growth. In the event of an acquisition, failure to realise the expected benefits of the acquisition, or post-acquisition performance of the acquired business not meeting the expected financial performance at the time transaction terms were agreed, could adversely affect strategic development, future financial results and prospects.
Potential impact:
Poor acquisition decisions could result in loss of goodwill, additional integration offsetting expected synergies, management distraction and failure to achieve strategic objectives.
Mitigations:
The Group regularly reviews its M&A strategy and where engaged, the Board maintains material oversight of each stage of the process. Through robust approvals processes, the Board satisfies itself of the competence and independence of third parties involved in advising, opportunity modelling and delivering due diligence for any such process. The Board continues to monitor activity in the market and position itself appropriately to defend the Group\u2019s position.
Developments in 2025:
No significant M&A activity occurred during the year. The focus remained on organic growth initiatives and strengthening existing operations.
Emerging risk:\u00a0
Limited availability of suitable acquisition targets in our niche market could constrain growth opportunities.
Likelihood:\u00a0
Unlikely
Magnitude:
Low \u2013 decreased risk score in 2025
Risk management continued
The consolidated financial statements on of Xaar Plc, registered number 3320972, were approved and authorised for issue by the Board of Directors on 23 March 2026 and signed on its behalf by:
\u00a0
John Mills Paul James
Chief Executive Officer Chief Financial Officer
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"2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "shtag_7397284": { "value": "5349000.0", "decimals": -3, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "shtag_7397285": { "value": "8711000.0", "decimals": -3, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "shtag_7396869": { "value": "a) General information
Xaar plc (the Company, and together with its subsidiaries, the Group) is a public limited company whose shares are listed on the London Stock Exchange, is incorporated and domiciled in the UK and is registered in England under the Companies Act 2006.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396870": { "value": "Xaar plc", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396871": { "value": "UK", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396874": { "value": "b) Basis of preparation
The consolidated financial statements have been prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006.
The consolidated financial statements include the results of the Company and its subsidiaries (together \u2018the Group\u2019). The Group\u2019s directly and indirectly held subsidiary undertakings are disclosed in note C6\u00a0to the Company financial statements.
The consolidated financial statements have been presented in Sterling, the functional and presentational currency of the Company. Certain Group subsidiary entities have functional currencies other than Sterling. The financial position and performance of all such subsidiary entities is translated into the presentational currency (Sterling) in accordance with the foreign currencies accounting policy as detailed in Note 2.
The consolidated financial statements have been prepared under the historical cost convention as modified for the revaluation of certain financial instruments. All values are rounded to the nearest thousand pounds (\u00a3\u2019000) except when otherwise indicated.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396882": { "value": "The consolidated financial statements have been presented in Sterling, the functional and presentational currency of the Company. Certain Group subsidiary entities have functional currencies other than Sterling. The financial position and performance of all such subsidiary entities is translated into the presentational currency (Sterling) in accordance with the foreign currencies accounting policy as detailed in Note 2.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396938": { "value": "c) Alternative performance measures
The alternative performance measures (APMs) used by the Group adjust for both recurring and non-recurring items that the Directors consider are not reflective of the underlying performance of the Group. Recurring items are adjusted each year irrespective of materiality to ensure consistent treatment.
The Directors believe that the \u2018adjusted profit before tax\u2019 and \u2018adjusted earnings per share\u2019 measures presented provide a consistent presentation of the Group\u2019s underlying operational performance. They also present shareholders with a clearer insight of performance metrics used by the Chief Operating Decision Maker and mitigate volatility resulting from external factors that are not influenced by the Group, for example exchange rate fluctuations.
These measures are not defined under IFRS; therefore, they may not be directly comparable with the \u2018adjusted\u2019 profit measures of other companies.
The Directors define adjusting items as follows:
fair value gains or losses on financial assets at fair value through profit and loss (FVTPL);
restructuring and transaction expenses;
amortisation of intangible assets arising on business combinations;
foreign exchange gains or losses arising on intra-group transactions;
research and development expenditure credits;
share-based payments charges and employer\u2019s tax contributions thereon;
asset impairment outside of the ordinary course of business;
legal provisions;
start up costs of new ventures; and
the tax effect of the aforementioned adjusting items.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExceptionalItemsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396876": { "value": "d) Going Concern
The consolidated financial statements are prepared on a going concern basis. Having considered the Group\u2019s forecast financial performance and cash flows, and after making appropriate enquiries, the Directors have a reasonable expectation that the Group has adequate financial resources to continue in operational existence for the foreseeable future and for at least one year from the date that these consolidated financial statements are signed. For these reasons, they continue to adopt the going concern basis in preparing the consolidated financial statements. Accordingly, these financial statements do not include any adjustments to the carrying amount or classification of assets and liabilities that would result if the Group were unable to continue as a going concern.
In preparing forecasts Xaar considers all external factors that could impact on financial performance and makes appropriate allowances for these. The forecast informing the decision to prepare the consolidated financial statements on a going concern basis considered, among other things; the likelihood of inflationary pressures resulting from macro-economic factors, and the unrest in Ukraine & Gaza and the wider Middle East. The impact of tariffs continues to be evaluated and we are working closely with our customers, suppliers and advisors to navigate and mitigate impacts in this area. Furthermore, forecasts have been subject to sensitivities to assess the impact on revenue generation, profitability and liquidity of wider market disruption in certain customer and supplier markets and uncertainty in timing of revenues expected from significant strategic opportunities.
A reverse stress test has been performed to model the circumstances required to eliminate available liquidity during the going concern period; this includes reducing revenues. This reverse stress scenario would require a reduction in Group revenue in excess of 20% in comparison to the base case, before considering any significant mitigating actions. The Directors believe the possibility of this combination of severe downsides arising to be remote given the recurring revenue base, visibility of committed orders and expected new revenue streams secured from products known to be launching by OEMs throughout 2026.
In the unlikely event of such a scenario materialising, the Group has a range of mitigating actions, focused on reducing the Group\u2019s cost base, that could be taken to avoid a liquidity shortfall. Namely, deferring non-committed capital expenditure, delaying or suspending research and development expenditure, and/or ultimately even making headcount reductions. It is worth noting that such actions would only be required in the event of an extreme downside scenario.
Notes to the consolidated financial statements
for the year ended 31 December 2025
Notes to the consolidated financial statements continued
for the year ended 31 December 2025
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1. Presentation of the financial statements continued
d) Going Concern continued
The Group is continuously monitoring and mitigating, where possible, the impacts of such risks. There is a high degree of predictability within the Group\u2019s short-term cash flows as they reflect existing technologies and products, existing OEM adoption and the committed order pipeline. The level of sensitivity testing and reverse stress testing performed is proportionate to this level of predictability.
The Group\u2019s business activities, together with the factors likely to affect its future development, performance and financial position are set out in the Strategic Report on pages 5\u00a0to\u00a06.
The Group continues to have a net current assets position and maintains sufficient financial resources as at 31 December 2025. These consisted of cash and cash equivalents of \u00a35,349,000 as well as \u00a35,000,000 of committed, but undrawn, banking facilities made available under a revolving credit facility agreement. Post year-end in March 2026 this revolving credit facility was extended for a further three years to June 2029 and increased to \u00a310,000,000. The revolving credit facility is subject to leverage, interest cover and capital expenditure threshold covenants. In addition, to support the Group\u2019s working capital position, alongside the above core banking facilities, the Group also has access to ancillary funding arrangements in the form of an invoice discounting facility, of which \u00a3475,000 of the total \u00a33,000,000 committed facility was utilised as at 31 December 2025.
Details of the Group\u2019s objectives, policies and processes for managing its capital and its exposure to financial risks, including both credit risk and liquidity risk, are included in Note 28.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396880": { "value": "Revenue recognition
The Group has the following revenue streams:
\u00a0Product sales; and
\u00a0Commissions and services.
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties.
Revenue is presented after eliminating sales within the Group and is shown net of discounts, VAT and other sales-related taxes.
Goods and services deliverable under a contract are identified as separate performance obligations to the extent that the customer can independently benefit from each good or service and they are distinct. Each such product or service provided has a defined transaction price, being its standalone selling price. Where the criteria to be separately identifiable as distinct performance obligations are not met, the goods and services are aggregated until a separate obligation is identified. Where there are multiple performance obligations, revenue is measured at the value per the contract of the consideration receivable in exchange for the products and/or services, allocated by reference to the relative stand-alone selling prices of each of the performance obligations.
Typically, goods and services provided by the Group meet the definition of separate performance obligations, with the transaction price being allocated to each such obligation. However, certain contracts in the FFEI and EPS segments contain deliverables that are not distinct, such as where the services provided are essential for a customer to be able to derive a benefit from the goods purchased.
1. Product sales
This revenue stream consists of:
the manufacture and sale of finished goods (printheads);
the sale of engineered printing solutions; and
the sale of digital imaging devices.
Revenue is recognised when control has been transferred to the customer. Control is deemed to transfer to the customer at point of delivery or collection of the products. Revenue is generally recognised at a point in time (such as on delivery or collection) and is typically invoiced in arrears.
Certain contractual arrangements in the EPS and FFEI segments require revenue to be recognised over a period of time, such as where the asset produced does not have an alternative use and the Group has an enforceable right to payment for performance completed to date. Where this is the case, the performance obligations are typically not distinct. Sale of Digital Imaging devices in FFEI business unit only relates to prior year.
During the year, the Group changed the method used to measure progress for the long-term revenue contracts in its EPS segment from an input method to an output method. The output method has been adopted because management concluded that it provides a more faithful depiction of stage of completion of the contract and the revenue which can be irrevocably recognised. The output method reflects the contractual value transferred to the customer based on objectively verifiable milestones and deliverables, such as design completion, assembly completion and factory acceptance testing. This change is accounted for as a change in accounting estimate, consistent with IFRS principles for measuring progress toward satisfaction with performance obligations. The change has been applied prospectively to the contracts which were open at 1 January 2025 and any new contracts entered into during the year. The Group typically provides warranties for general repairs of defects that existed at the time of sale, as required by law. These assurance-type warranties are accounted for as warranty provisions. See the \u2018Warranty provisions\u2019 accounting policy on page 109\u00a0for full details.
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2. Principal accounting policies continued
Revenue recognition continued
2. Commissions and services
This revenue stream consists of the provision of consulting and research and development services to customers.
Revenue is recognised over time where the customer simultaneously receives and consumes the benefits of the Group\u2019s performance obligations. In order to estimate the stage of completion of the contract when recognising revenue over a period of time, an input methodology (based on total estimated labour hours to deliver the contract) is used. This is considered to best depict the performance conditions.
Where this is not the case, revenue is recognised at a point in time. Payments for this revenue stream are typically in arrears.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396879": { "value": "Revenue recognition
The Group has the following revenue streams:
\u00a0Product sales; and
\u00a0Commissions and services.
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties.
Revenue is presented after eliminating sales within the Group and is shown net of discounts, VAT and other sales-related taxes.
Goods and services deliverable under a contract are identified as separate performance obligations to the extent that the customer can independently benefit from each good or service and they are distinct. Each such product or service provided has a defined transaction price, being its standalone selling price. Where the criteria to be separately identifiable as distinct performance obligations are not met, the goods and services are aggregated until a separate obligation is identified. Where there are multiple performance obligations, revenue is measured at the value per the contract of the consideration receivable in exchange for the products and/or services, allocated by reference to the relative stand-alone selling prices of each of the performance obligations.
Typically, goods and services provided by the Group meet the definition of separate performance obligations, with the transaction price being allocated to each such obligation. However, certain contracts in the FFEI and EPS segments contain deliverables that are not distinct, such as where the services provided are essential for a customer to be able to derive a benefit from the goods purchased.
1. Product sales
This revenue stream consists of:
the manufacture and sale of finished goods (printheads);
the sale of engineered printing solutions; and
the sale of digital imaging devices.
Revenue is recognised when control has been transferred to the customer. Control is deemed to transfer to the customer at point of delivery or collection of the products. Revenue is generally recognised at a point in time (such as on delivery or collection) and is typically invoiced in arrears.
Certain contractual arrangements in the EPS and FFEI segments require revenue to be recognised over a period of time, such as where the asset produced does not have an alternative use and the Group has an enforceable right to payment for performance completed to date. Where this is the case, the performance obligations are typically not distinct. Sale of Digital Imaging devices in FFEI business unit only relates to prior year.
During the year, the Group changed the method used to measure progress for the long-term revenue contracts in its EPS segment from an input method to an output method. The output method has been adopted because management concluded that it provides a more faithful depiction of stage of completion of the contract and the revenue which can be irrevocably recognised. The output method reflects the contractual value transferred to the customer based on objectively verifiable milestones and deliverables, such as design completion, assembly completion and factory acceptance testing. This change is accounted for as a change in accounting estimate, consistent with IFRS principles for measuring progress toward satisfaction with performance obligations. The change has been applied prospectively to the contracts which were open at 1 January 2025 and any new contracts entered into during the year. The Group typically provides warranties for general repairs of defects that existed at the time of sale, as required by law. These assurance-type warranties are accounted for as warranty provisions. See the \u2018Warranty provisions\u2019 accounting policy on page 109\u00a0for full details.
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2. Principal accounting policies continued
Revenue recognition continued
2. Commissions and services
This revenue stream consists of the provision of consulting and research and development services to customers.
Revenue is recognised over time where the customer simultaneously receives and consumes the benefits of the Group\u2019s performance obligations. In order to estimate the stage of completion of the contract when recognising revenue over a period of time, an input methodology (based on total estimated labour hours to deliver the contract) is used. This is considered to best depict the performance conditions.
Where this is not the case, revenue is recognised at a point in time. Payments for this revenue stream are typically in arrears.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396939": { "value": "2. Commissions and services
This revenue stream consists of the provision of consulting and research and development services to customers.
Revenue is recognised over time where the customer simultaneously receives and consumes the benefits of the Group\u2019s performance obligations. In order to estimate the stage of completion of the contract when recognising revenue over a period of time, an input methodology (based on total estimated labour hours to deliver the contract) is used. This is considered to best depict the performance conditions.
Where this is not the case, revenue is recognised at a point in time. Payments for this revenue stream are typically in arrears.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFeeAndCommissionIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396886": { "value": "Leasing
Leased assets are capitalised on inception of the lease as right-of-use assets. A corresponding lease liability, representing the present value of the lease payments, is also recognised and split between current and non-current liabilities accordingly.
The lease liability includes: fixed payments, variable lease payments dependent on an index or rate (initially measured using the index or rate on the lease commencement date) and in substance fixed payments. The variable aspect of variable payments are recognised when the rate or index takes effect resulting in an adjustment to the liability and right-of-use asset.
The discounted lease liability is calculated where possible using the interest rate implicit in the lease or where this is not attainable the incremental borrowing rate is utilised. The incremental borrowing rate is the rate the Group would have to pay to borrow the funds necessary to obtain a similar asset under similar conditions. The Group calculates the incremental borrowing rate using risk free rate of the country where the asset is held, adjusted for length of the lease and a risk premium.
Lease payments are allocated against the principal and finance cost. Finance costs, representing the unwinding of the discount on the lease liability are charged to the income statement to produce a constant periodic rate of interest on the remaining liability. The Group has elected to not present the capital and interest elements of lease payments separately within cash flows arising from financing activities. Instead, these amounts are presented in aggregate as \u2018lease payments\u2019 in the Consolidated Cash Flow Statement.
Right-of-use assets are measured at cost including; the discounted initial lease liability, lease payments made at or before the commencement date, any dilapidation provisions and initial direct costs and reduced by any lease incentives received.
Right-of-use assets are depreciated over the shorter of the non-cancellable lease period and any extension options that are considered reasonably certain to be taken or the useful life of the asset. The Group\u2019s current leases run from 1\u201320 years.
Modifications to lease agreements result in remeasurement of the lease liability and right-of-use asset.
Short-term leases, defined as less than one year, and also of low value, are recognised on a straight-line basis as rental expense in the Consolidated Income Statement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396918": { "value": "Foreign currencies
Foreign currency transactions are booked at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currency are retranslated at the rates of exchange ruling at the balance sheet date. Exchange differences arising on settlement or retranslation of monetary assets and liabilities are included in the Consolidated Income Statement.
The results of overseas subsidiaries are translated into Sterling using the average exchange rates during the year. Assets and liabilities are translated at the rates ruling at the balance sheet date. Goodwill arising on the acquisition of a foreign operation is treated as an asset of that foreign operation and as such is translated at the relevant foreign exchange rate at the balance sheet date. Exchange differences arising on this translation are recognised through other comprehensive income in the translation reserve.
Other exchange differences are recognised in the income statement in the period in which they arise.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396916": { "value": "Retirement benefit costs
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. Payments made to state managed retirement benefit schemes are dealt with as payments to defined contribution schemes where the Group\u2019s obligations under the schemes are equivalent to those arising in a defined contribution retirement benefit scheme.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396917": { "value": "Xaar plc Annual Report and Financial Statements 2025
106
Notes to the consolidated financial statements continued
for the year ended 31 December 2025
2. Principal accounting policies continued
Taxation
The tax expense represents the sum of tax currently payable and deferred tax, including UK corporation tax and foreign tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the Consolidated Income Statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable nor deductible. The Group\u2019s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill (taxable temporary differences only) or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and only recognised to the extent that is probable that sufficient taxable profits will be available to allow the asset to be recovered.
Deferred tax is charged or credited to the Consolidated Income Statement, except when it relates to items charged or credited in Other Comprehensive Income or directly in equity, in which case the deferred tax is also recognised within either Other Comprehensive Income or directly in equity respectively.
To the extent that the Group receives a tax deduction relating to share-based payment transactions, a deferred tax asset is recognised at the appropriate tax rate on the difference in value between the market price of the underlying equity as at the date of the financial statements and the exercise price of the outstanding share options multiplied by the expired portion of the vesting period. As a result, the deferred tax impact of share options will not be derived directly from the expense reported in the Consolidated Income Statement. Where the deductible difference exceeds the cumulative charge to the Consolidated Income Statement the excess of the associated tax benefit is recorded directly to equity rather than in profit or loss.
Deferred tax assets and liabilities are measured on an undiscounted basis and are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Business combinations
Business combinations are accounted for using the acquisition method. On the acquisition of a business, fair values are attributed to the identifiable assets, liabilities and contingent liabilities unless the fair value cannot be reliably measured in which case the value is subsumed into goodwill. Where applicable, on a transaction-by-transaction basis the Group elects to utilise the optional concentration test when assessing whether a transaction consists of a business combination or instead is in substance the purchase of a single asset or group of similar assets. The concentration test is met if substantially all the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. Where the concentration test is met, the transaction is accounted for as an asset acquisition rather than as a business combination. The fair value of the gross assets acquired is calculated as the sum of the consideration transferred plus the fair value of liabilities assumed (other than deferred tax liabilities) less cash acquired. No goodwill arises on such transactions and acquisition costs are capitalised.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity\u2019s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period or additional assets or liabilities are recognised to reflect new information obtained about facts and circumstances that existed as at the acquisition date that, if known, would have affected the amounts recognised as of that date. The measurement period is the period from the date of acquisition to the date the Group obtains complete information about facts and circumstances that existed as of the acquisition date \u2013 and is subject to a maximum of one year. Where measurement period adjustments are identified, comparative prior period is revised to reflect the change to the acquisition accounting.
Acquisition-related costs are expensed to the Consolidated Income Statement in the period in which they are incurred.
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2. Principal accounting policies continued
Goodwill
Goodwill represents the excess of the fair value of the consideration over the fair value of the net assets acquired. Where the fair value of the consideration is less than the fair value of the acquired net assets, the deficit is recognised immediately in the Consolidated Income Statement as a bargain purchase.
Goodwill is not amortised, but is subject to an impairment review at least annually and is carried at cost less accumulated impairment losses.
Any impairment is recognised immediately in the income statement and is not subsequently reversed.
For the purpose of impairment testing, goodwill is allocated to cash generating units (CGUs). The CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the carrying value may not be recoverable.
Intangible assets
Acquisition intangibles
Acquisition intangibles comprise of brands, customer relationships, patents, technology and know-how. These are capitalised at fair value and are amortised on a straight-line basis over their estimated useful lives. Amortisation of these intangibles are included within selling, general and administrative expenses within the consolidated income statement.
The principal expected useful lives are as follows:
Brands\t10 years
Customer relationships\t6-8 years
Patents, technology and know-how\t6 years
Other intangible assets
These comprise software, licence fees and expenditure on developed technology. Costs associated with the development activities are recognised as an asset if and only if they meet the recognition criteria set out in IAS 38 \u2018Intangible Assets\u2019, namely that:
the project must be technically feasible;
there must be the intention to complete the project;
there must be adequate resources to be able to complete the project;
the ability to use or sell the asset or product is secure;
the future economic benefits must exceed the costs; and
the ability to reliably measure costs.
Where no internally generated intangible assets can be recognised, development expenditure is recognised as an expense in the period in which it is incurred. All expenditure on research is expensed in the period in which it is incurred.
Intangible assets are amortised on a straight-line basis over their estimated useful lives. Amortisation of these intangibles are included within selling, general and administrative expenses within the consolidated income statement. Assets under construction are not amortised.
The principal expected useful lives are as follows:
Software Licence fees\t3 to 15 years
Internally developed technology 1 to 20 years
Capitalised development costs \u2013 patent\tLife of patent
Capitalised development costs\tLife of project
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the Consolidated Income Statement.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and, where appropriate, provision for impairment in value. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Depreciation is included within selling, general and administrative expenses within the consolidated income statement.
Depreciation is charged so as to write off the cost of assets over their estimated useful lives, using the straight-line method, as follows:
Leasehold improvements\t1 to 20 years up to the maximum of the lease term
Plant and machinery\t3 to 20 years
Furniture, fittings and equipment 3 to 20 years
Buildings\tUp to 40 years
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the income statement.
Assets under the course of construction are not depreciated.
Xaar plc Annual Report and Financial Statements 2025
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Notes to the consolidated financial statements continued
for the year ended 31 December 2025
2. Principal accounting policies continued
Property, plant and equipment continued
Spare parts are capitalised within property, plant and equipment where it is expected that future economic benefits will flow to the entity and the cost can be measured reliably. This typically relates to critical spares, which must be maintained for business continuity. Depreciation of these assets commences both when the assets are bought and when they are put in use. The former has a longer useful life of six years to account for the \u2018idle\u2019 time whilst the latter is a shorter useful life of three years which is an approximation for the average useful life of a part in use.
Impairment of property, plant and equipment and intangible assets excluding goodwill
A review is undertaken upon the occurrence of events or circumstances which indicate that the carrying amount may not be recoverable. In addition, any assets not yet available for use are tested for impairment annually.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If it is not possible to determine the recoverable amount for an individual asset, the assessment is made for the asset\u2019s cash-generating unit (CGU).
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is calculated using the first in, first out (FIFO) cost formula, by applying the standard cost methodology, with costs including direct materials, direct labour costs and an attributable proportion of manufacturing overheads based on normal levels of activity that have been incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. Provision is made for obsolete, slow-moving or defective items where applicable.
Financial instruments
Financial instruments are recognised and classified according to the substance of the contractual arrangements into which the Group enters.
An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities. Financial assets and financial liabilities are recognised in the Group\u2019s Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument.
Financial assets
Cash and cash equivalents, trade and other receivables (excluding prepayments and contract assets) and financial assets held at fair value through profit or loss are categorised as financial assets.
On initial recognition, financial assets are classified as either fair value through profit or loss, or amortised cost. The classification depends on the purpose for which the financial assets were acquired and their contractual cash flows.
Amortised cost assets are non-derivative debt instruments that meet the following conditions:
the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on theprincipal amount outstanding.
The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. For financial assets other than purchased or originated credit-impaired financial assets, the effective interest rate is the rate that exactly discounts estimated future cash receipts excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition.
Interest income is recognised in the Consolidated Income Statement and is included in the \u2018finance income\u2019 line item.
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss.
Financial Statements
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2. Principal accounting policies continued
Financial assets continued
ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
The Group always measures the loss allowance for trade receivables at an amount equal to lifetime ECL. The expected credit losses on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor\u2019s current financial position, adjusted for factors that are specific to the debtor, general economic conditions of the industry in which the debtor operates and an assessment of both the current as well as the forecast direction of conditions at the reporting date.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset\u2019s carrying amount and the present value of the estimated future cash flows, discounted at the financial asset\u2019s original effective interest rate.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits with an original maturity of three months or less.
Trade and other receivables
Trade receivables are recognised at cost less allowances for expected credit losses. The provision is based on the Group\u2019s expected credit loss, which is calculated using the simplified approach for trade receivables based on historical data adjusted for forward looking information.
Financial liabilities
Financial liabilities are those which involve a contractual obligation to deliver cash to external parties at a future date.
Interest-bearing loans and borrowings
Interest-bearing loans and bank overdrafts are measured initially at fair value, net of direct issue costs. Interest is subsequently at amortised cost.
Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accrual basis in the Consolidated Income Statement using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
Trade and other payables
Trade payables are non-interest bearing and are stated at amortised cost which approximates cost here due to the short term nature of the payables.
Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that the Group will be required to settle that obligation. Provisions are measured at the Directors\u2019 best estimate of the expenditure required to settle the obligation at the date of the statement of financial position and are discounted where the effect of the time value of money is material.
Restructuring provisions
A restructuring provision is recognised when the Group has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it, and the plan has reached a stage where the decision is unlikely to be reversed. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity.
Warranty provisions
Provisions for the expected cost of warranty obligations under contracts with customers and local sale of goods legislation are recognised in the month of sale of the relevant products, at the Directors\u2019 best estimate of the expenditure required to settle the Group\u2019s obligation.
For general warranty provisions, this estimate is based on historical trends. For specific warranty provisions, this estimate is based on the known faults in the product sold in the year.
Dilapidation provisions
Provisions for leased property dilapidation are recognised at the commencement of the lease using the Group\u2019s best estimate to settle the obligation at the end of the lease term.
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Notes to the consolidated financial statements continued
for the year ended 31 December 2025
2. Principal accounting policies continued
Contract assets and contract liabilities
A contract asset is recognised when revenue recognised in respect of a customer contract exceeds amounts received or receivable from the customer. This situation arises when the recognition of revenue over time to date is greater than amounts invoiced to the customer and invoicing is conditional on further performance. The carrying amount is reduced by allowances for expected credit losses.
When there is an unconditional entitlement, generally when invoices are raised, the contract asset values are reclassified to trade receivables.
Contract liabilities comprise the Group\u2019s obligation to transfer goods or services to a customer for which the Group has received payment from the customer in advance of revenue recognition. This situation arises when the customer is invoiced in advance and the revenue recognised over time is lower than the amounts invoiced to the customer.
Discontinued operations
A discontinued operation is a separate major line of business which has either been disposed of, abandoned or is classified as held for sale. If the asset or disposal groups is not classified as held for sale, the discontinued operations are not separately shown on the Statement of Financial Position.
To meet the classification as held for sale, the non-current asset or disposal group must meet these three criteria:
the carrying amount is to be recovered principally through a sale transaction rather than through continuing use
be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (or disposal groups)
the sale must be highly probable. This is considered the case when the board is committed to a plan to sell, an active program to locate a buyer and complete the plan must have been initiated. And the asset (or disposal group) must be actively marketed for sale at a price that is reasonable in relation to its current fair value.
Disclosure elections
The results of discontinued operations are presented separately as a single line in the consolidated income statement. Comparatives are restated in the statement of comprehensive income and related notes. In contrast the statement of financial position and cash flow statement is not restated.
Where there is intergroup trading between the continuing and discontinued operations, both external and intragroup transactions are included as a discontinued operation. This method\u2019s merit lies in its accurate representation of both entities\u2019 performance.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in share premium as a deduction from the proceeds.
Own shares
No gain or loss is recognised in the Consolidated Income Statement on the purchase, sale, issue or cancellation of the Group\u2019s own shares. Instead, any difference between the carrying amount and the consideration paid is recognised in equity.
Share-based payments
Equity settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant and is expensed on a straight-line basis over the vesting period, based on the Group\u2019s estimate of the number of shares that will eventually vest.
Cash-settled share-based payments are measured at fair value at grant date and remeasured at each reporting date and settlement. The liability is recognised in the statement of financial position, with changes in fair value recognised in profit or loss over the vesting period. Upon settlement, any difference between the payment and the liability is recorded in profit or loss.
Share-based payments where vesting is by reference to external, market based performance criteria (such as growth in an external index) are measured using the Monte Carlo simulation. Those which are subject only to internal, non-market based performance criteria and/or service conditions are measured using the Black-Scholes model.
For schemes that have non-market based performance conditions the number of options expected to vest is recalculated at each reporting date based on expectations of leavers prior to vesting. The number of options expected to vest for schemes with internal performance criteria is also adjusted based on expectations of performance against targets. No adjustments are made for expected performance against external, market based targets. Charges recognised in the Consolidated Income Statement in respect of equity-settled share-based payments are credited to the share-based payments reserve in equity.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and the entities under its control (together the \u2018Group\u2019). Control is achieved when the Company has power to control the financial and operating policies of an entity either directly or indirectly and the ability to use that power to affect the returns it receives from its involvement with the entity.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies in line with those used by the Group. All intra-group transactions, balances, equity, income and expenses are eliminated on consolidation", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396854": { "value": "Taxation
The tax expense represents the sum of tax currently payable and deferred tax, including UK corporation tax and foreign tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the Consolidated Income Statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable nor deductible. The Group\u2019s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill (taxable temporary differences only) or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and only recognised to the extent that is probable that sufficient taxable profits will be available to allow the asset to be recovered.
Deferred tax is charged or credited to the Consolidated Income Statement, except when it relates to items charged or credited in Other Comprehensive Income or directly in equity, in which case the deferred tax is also recognised within either Other Comprehensive Income or directly in equity respectively.
To the extent that the Group receives a tax deduction relating to share-based payment transactions, a deferred tax asset is recognised at the appropriate tax rate on the difference in value between the market price of the underlying equity as at the date of the financial statements and the exercise price of the outstanding share options multiplied by the expired portion of the vesting period. As a result, the deferred tax impact of share options will not be derived directly from the expense reported in the Consolidated Income Statement. Where the deductible difference exceeds the cumulative charge to the Consolidated Income Statement the excess of the associated tax benefit is recorded directly to equity rather than in profit or loss.
Deferred tax assets and liabilities are measured on an undiscounted basis and are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396855": { "value": "Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill (taxable temporary differences only) or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and only recognised to the extent that is probable that sufficient taxable profits will be available to allow the asset to be recovered.
Deferred tax is charged or credited to the Consolidated Income Statement, except when it relates to items charged or credited in Other Comprehensive Income or directly in equity, in which case the deferred tax is also recognised within either Other Comprehensive Income or directly in equity respectively.
To the extent that the Group receives a tax deduction relating to share-based payment transactions, a deferred tax asset is recognised at the appropriate tax rate on the difference in value between the market price of the underlying equity as at the date of the financial statements and the exercise price of the outstanding share options multiplied by the expired portion of the vesting period. As a result, the deferred tax impact of share options will not be derived directly from the expense reported in the Consolidated Income Statement. Where the deductible difference exceeds the cumulative charge to the Consolidated Income Statement the excess of the associated tax benefit is recorded directly to equity rather than in profit or loss.
Deferred tax assets and liabilities are measured on an undiscounted basis and are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396940": { "value": "Business combinations
Business combinations are accounted for using the acquisition method. On the acquisition of a business, fair values are attributed to the identifiable assets, liabilities and contingent liabilities unless the fair value cannot be reliably measured in which case the value is subsumed into goodwill. Where applicable, on a transaction-by-transaction basis the Group elects to utilise the optional concentration test when assessing whether a transaction consists of a business combination or instead is in substance the purchase of a single asset or group of similar assets. The concentration test is met if substantially all the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. Where the concentration test is met, the transaction is accounted for as an asset acquisition rather than as a business combination. The fair value of the gross assets acquired is calculated as the sum of the consideration transferred plus the fair value of liabilities assumed (other than deferred tax liabilities) less cash acquired. No goodwill arises on such transactions and acquisition costs are capitalised.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity\u2019s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period or additional assets or liabilities are recognised to reflect new information obtained about facts and circumstances that existed as at the acquisition date that, if known, would have affected the amounts recognised as of that date. The measurement period is the period from the date of acquisition to the date the Group obtains complete information about facts and circumstances that existed as of the acquisition date \u2013 and is subject to a maximum of one year. Where measurement period adjustments are identified, comparative prior period is revised to reflect the change to the acquisition accounting.
Acquisition-related costs are expensed to the Consolidated Income Statement in the period in which they are incurred.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396877": { "value": "Business combinations
Business combinations are accounted for using the acquisition method. On the acquisition of a business, fair values are attributed to the identifiable assets, liabilities and contingent liabilities unless the fair value cannot be reliably measured in which case the value is subsumed into goodwill. Where applicable, on a transaction-by-transaction basis the Group elects to utilise the optional concentration test when assessing whether a transaction consists of a business combination or instead is in substance the purchase of a single asset or group of similar assets. The concentration test is met if substantially all the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. Where the concentration test is met, the transaction is accounted for as an asset acquisition rather than as a business combination. The fair value of the gross assets acquired is calculated as the sum of the consideration transferred plus the fair value of liabilities assumed (other than deferred tax liabilities) less cash acquired. No goodwill arises on such transactions and acquisition costs are capitalised.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity\u2019s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period or additional assets or liabilities are recognised to reflect new information obtained about facts and circumstances that existed as at the acquisition date that, if known, would have affected the amounts recognised as of that date. The measurement period is the period from the date of acquisition to the date the Group obtains complete information about facts and circumstances that existed as of the acquisition date \u2013 and is subject to a maximum of one year. Where measurement period adjustments are identified, comparative prior period is revised to reflect the change to the acquisition accounting.
Acquisition-related costs are expensed to the Consolidated Income Statement in the period in which they are incurred.
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Strategic Report
Governance
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2. Principal accounting policies continued
Goodwill
Goodwill represents the excess of the fair value of the consideration over the fair value of the net assets acquired. Where the fair value of the consideration is less than the fair value of the acquired net assets, the deficit is recognised immediately in the Consolidated Income Statement as a bargain purchase.
Goodwill is not amortised, but is subject to an impairment review at least annually and is carried at cost less accumulated impairment losses.
Any impairment is recognised immediately in the income statement and is not subsequently reversed.
For the purpose of impairment testing, goodwill is allocated to cash generating units (CGUs). The CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the carrying value may not be recoverable.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396878": { "value": "Business combinations
Business combinations are accounted for using the acquisition method. On the acquisition of a business, fair values are attributed to the identifiable assets, liabilities and contingent liabilities unless the fair value cannot be reliably measured in which case the value is subsumed into goodwill. Where applicable, on a transaction-by-transaction basis the Group elects to utilise the optional concentration test when assessing whether a transaction consists of a business combination or instead is in substance the purchase of a single asset or group of similar assets. The concentration test is met if substantially all the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. Where the concentration test is met, the transaction is accounted for as an asset acquisition rather than as a business combination. The fair value of the gross assets acquired is calculated as the sum of the consideration transferred plus the fair value of liabilities assumed (other than deferred tax liabilities) less cash acquired. No goodwill arises on such transactions and acquisition costs are capitalised.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity\u2019s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period or additional assets or liabilities are recognised to reflect new information obtained about facts and circumstances that existed as at the acquisition date that, if known, would have affected the amounts recognised as of that date. The measurement period is the period from the date of acquisition to the date the Group obtains complete information about facts and circumstances that existed as of the acquisition date \u2013 and is subject to a maximum of one year. Where measurement period adjustments are identified, comparative prior period is revised to reflect the change to the acquisition accounting.
Acquisition-related costs are expensed to the Consolidated Income Statement in the period in which they are incurred", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396952": { "value": "Goodwill
Goodwill represents the excess of the fair value of the consideration over the fair value of the net assets acquired. Where the fair value of the consideration is less than the fair value of the acquired net assets, the deficit is recognised immediately in the Consolidated Income Statement as a bargain purchase.
Goodwill is not amortised, but is subject to an impairment review at least annually and is carried at cost less accumulated impairment losses.
Any impairment is recognised immediately in the income statement and is not subsequently reversed.
For the purpose of impairment testing, goodwill is allocated to cash generating units (CGUs). The CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the carrying value may not be recoverable.
Intangible assets
Acquisition intangibles
Acquisition intangibles comprise of brands, customer relationships, patents, technology and know-how. These are capitalised at fair value and are amortised on a straight-line basis over their estimated useful lives. Amortisation of these intangibles are included within selling, general and administrative expenses within the consolidated income statement.
The principal expected useful lives are as follows:
Brands\t10 years
Customer relationships\t6-8 years
Patents, technology and know-how\t6 years
Other intangible assets
These comprise software, licence fees and expenditure on developed technology. Costs associated with the development activities are recognised as an asset if and only if they meet the recognition criteria set out in IAS 38 \u2018Intangible Assets\u2019, namely that:
the project must be technically feasible;
there must be the intention to complete the project;
there must be adequate resources to be able to complete the project;
the ability to use or sell the asset or product is secure;
the future economic benefits must exceed the costs; and
the ability to reliably measure costs.
Where no internally generated intangible assets can be recognised, development expenditure is recognised as an expense in the period in which it is incurred. All expenditure on research is expensed in the period in which it is incurred.
Intangible assets are amortised on a straight-line basis over their estimated useful lives. Amortisation of these intangibles are included within selling, general and administrative expenses within the consolidated income statement. Assets under construction are not amortised.
The principal expected useful lives are as follows:
Software Licence fees\t3 to 15 years
Internally developed technology 1 to 20 years
Capitalised development costs \u2013 patent\tLife of patent
Capitalised development costs\tLife of project
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the Consolidated Income Statement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396936": { "value": "Goodwill
Goodwill represents the excess of the fair value of the consideration over the fair value of the net assets acquired. Where the fair value of the consideration is less than the fair value of the acquired net assets, the deficit is recognised immediately in the Consolidated Income Statement as a bargain purchase.
Goodwill is not amortised, but is subject to an impairment review at least annually and is carried at cost less accumulated impairment losses.
Any impairment is recognised immediately in the income statement and is not subsequently reversed.
For the purpose of impairment testing, goodwill is allocated to cash generating units (CGUs). The CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the carrying value may not be recoverable", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396883": { "value": "Intangible assets
Acquisition intangibles
Acquisition intangibles comprise of brands, customer relationships, patents, technology and know-how. These are capitalised at fair value and are amortised on a straight-line basis over their estimated useful lives. Amortisation of these intangibles are included within selling, general and administrative expenses within the consolidated income statement.
The principal expected useful lives are as follows:
Brands\t10 years
Customer relationships\t6-8 years
Patents, technology and know-how\t6 years
Other intangible assets
These comprise software, licence fees and expenditure on developed technology. Costs associated with the development activities are recognised as an asset if and only if they meet the recognition criteria set out in IAS 38 \u2018Intangible Assets\u2019, namely that:
the project must be technically feasible;
there must be the intention to complete the project;
there must be adequate resources to be able to complete the project;
the ability to use or sell the asset or product is secure;
the future economic benefits must exceed the costs; and
the ability to reliably measure costs.
Where no internally generated intangible assets can be recognised, development expenditure is recognised as an expense in the period in which it is incurred. All expenditure on research is expensed in the period in which it is incurred.
Intangible assets are amortised on a straight-line basis over their estimated useful lives. Amortisation of these intangibles are included within selling, general and administrative expenses within the consolidated income statement. Assets under construction are not amortised.
The principal expected useful lives are as follows:
Software Licence fees\t3 to 15 years
Internally developed technology 1 to 20 years
Capitalised development costs \u2013 patent\tLife of patent
Capitalised development costs\tLife of project
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the Consolidated Income Statement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396884": { "value": "Other intangible assets
These comprise software, licence fees and expenditure on developed technology. Costs associated with the development activities are recognised as an asset if and only if they meet the recognition criteria set out in IAS 38 \u2018Intangible Assets\u2019, namely that:
the project must be technically feasible;
there must be the intention to complete the project;
there must be adequate resources to be able to complete the project;
the ability to use or sell the asset or product is secure;
the future economic benefits must exceed the costs; and
the ability to reliably measure costs.
Where no internally generated intangible assets can be recognised, development expenditure is recognised as an expense in the period in which it is incurred. All expenditure on research is expensed in the period in which it is incurred.
Intangible assets are amortised on a straight-line basis over their estimated useful lives. Amortisation of these intangibles are included within selling, general and administrative expenses within the consolidated income statement. Assets under construction are not amortised.
The principal expected useful lives are as follows:
Software Licence fees\t3 to 15 years
Internally developed technology 1 to 20 years
Capitalised development costs \u2013 patent\tLife of patent
Capitalised development costs\tLife of project
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the Consolidated Income Statement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396857": { "value": "Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and, where appropriate, provision for impairment in value. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Depreciation is included within selling, general and administrative expenses within the consolidated income statement.
Depreciation is charged so as to write off the cost of assets over their estimated useful lives, using the straight-line method, as follows:
Leasehold improvements\t1 to 20 years up to the maximum of the lease term
Plant and machinery\t3 to 20 years
Furniture, fittings and equipment 3 to 20 years
Buildings\tUp to 40 years
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the income statement.
Assets under the course of construction are not depreciated.
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Notes to the consolidated financial statements continued
for the year ended 31 December 2025
2. Principal accounting policies continued
Property, plant and equipment continued
Spare parts are capitalised within property, plant and equipment where it is expected that future economic benefits will flow to the entity and the cost can be measured reliably. This typically relates to critical spares, which must be maintained for business continuity. Depreciation of these assets commences both when the assets are bought and when they are put in use. The former has a longer useful life of six years to account for the \u2018idle\u2019 time whilst the latter is a shorter useful life of three years which is an approximation for the average useful life of a part in use.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396856": { "value": "Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and, where appropriate, provision for impairment in value. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Depreciation is included within selling, general and administrative expenses within the consolidated income statement.
Depreciation is charged so as to write off the cost of assets over their estimated useful lives, using the straight-line method, as follows:
Leasehold improvements\t1 to 20 years up to the maximum of the lease term
Plant and machinery\t3 to 20 years
Furniture, fittings and equipment 3 to 20 years
Buildings\tUp to 40 years
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the income statement.
Assets under the course of construction are not depreciated.
Xaar plc Annual Report and Financial Statements 2025
108
Notes to the consolidated financial statements continued
for the year ended 31 December 2025
2. Principal accounting policies continued
Property, plant and equipment continued
Spare parts are capitalised within property, plant and equipment where it is expected that future economic benefits will flow to the entity and the cost can be measured reliably. This typically relates to critical spares, which must be maintained for business continuity. Depreciation of these assets commences both when the assets are bought and when they are put in use. The former has a longer useful life of six years to account for the \u2018idle\u2019 time whilst the latter is a shorter useful life of three years which is an approximation for the average useful life of a part in use.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396934": { "value": "Impairment of property, plant and equipment and intangible assets excluding goodwill
A review is undertaken upon the occurrence of events or circumstances which indicate that the carrying amount may not be recoverable. In addition, any assets not yet available for use are tested for impairment annually.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If it is not possible to determine the recoverable amount for an individual asset, the assessment is made for the asset\u2019s cash-generating unit (CGU).
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396885": { "value": "Impairment of property, plant and equipment and intangible assets excluding goodwill
A review is undertaken upon the occurrence of events or circumstances which indicate that the carrying amount may not be recoverable. In addition, any assets not yet available for use are tested for impairment annually.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If it is not possible to determine the recoverable amount for an individual asset, the assessment is made for the asset\u2019s cash-generating unit (CGU).
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396887": { "value": "Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is calculated using the first in, first out (FIFO) cost formula, by applying the standard cost methodology, with costs including direct materials, direct labour costs and an attributable proportion of manufacturing overheads based on normal levels of activity that have been incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. Provision is made for obsolete, slow-moving or defective items where applicable.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396935": { "value": "Financial instruments
Financial instruments are recognised and classified according to the substance of the contractual arrangements into which the Group enters.
An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities. Financial assets and financial liabilities are recognised in the Group\u2019s Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396919": { "value": "Financial instruments
Financial instruments are recognised and classified according to the substance of the contractual arrangements into which the Group enters.
An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities. Financial assets and financial liabilities are recognised in the Group\u2019s Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396920": { "value": "Financial assets
Cash and cash equivalents, trade and other receivables (excluding prepayments and contract assets) and financial assets held at fair value through profit or loss are categorised as financial assets.
On initial recognition, financial assets are classified as either fair value through profit or loss, or amortised cost. The classification depends on the purpose for which the financial assets were acquired and their contractual cash flows.
Amortised cost assets are non-derivative debt instruments that meet the following conditions:
the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on theprincipal amount outstanding.
The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. For financial assets other than purchased or originated credit-impaired financial assets, the effective interest rate is the rate that exactly discounts estimated future cash receipts excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition.
Interest income is recognised in the Consolidated Income Statement and is included in the \u2018finance income\u2019 line item.
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss.
Financial assets continued
ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
The Group always measures the loss allowance for trade receivables at an amount equal to lifetime ECL. The expected credit losses on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor\u2019s current financial position, adjusted for factors that are specific to the debtor, general economic conditions of the industry in which the debtor operates and an assessment of both the current as well as the forecast direction of conditions at the reporting date.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset\u2019s carrying amount and the present value of the estimated future cash flows, discounted at the financial asset\u2019s original effective interest rate", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396937": { "value": "For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset\u2019s carrying amount and the present value of the estimated future cash flows, discounted at the financial asset\u2019s original effective interest rate.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396890": { "value": "Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits with an original maturity of three months or less.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396891": { "value": "Trade and other receivables
Trade receivables are recognised at cost less allowances for expected credit losses. The provision is based on the Group\u2019s expected credit loss, which is calculated using the simplified approach for trade receivables based on historical data adjusted for forward looking information.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLoansAndReceivablesExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396881": { "value": "Trade and other receivables
Trade receivables are recognised at cost less allowances for expected credit losses. The provision is based on the Group\u2019s expected credit loss, which is calculated using the simplified approach for trade receivables based on historical data adjusted for forward looking information.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396889": { "value": "Financial liabilities
Financial liabilities are those which involve a contractual obligation to deliver cash to external parties at a future date.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7397543": { "value": "Interest-bearing loans and borrowings
Interest-bearing loans and bank overdrafts are measured initially at fair value, net of direct issue costs. Interest is subsequently at amortised cost.
Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accrual basis in the Consolidated Income Statement using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7397542": { "value": "Interest-bearing loans and borrowings
Interest-bearing loans and bank overdrafts are measured initially at fair value, net of direct issue costs. Interest is subsequently at amortised cost.
Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accrual basis in the Consolidated Income Statement using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingCostsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7397541": { "value": "Interest-bearing loans and borrowings
Interest-bearing loans and bank overdrafts are measured initially at fair value, net of direct issue costs. Interest is subsequently at amortised cost.
Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accrual basis in the Consolidated Income Statement using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7397540": { "value": "Interest-bearing loans and borrowings
Interest-bearing loans and bank overdrafts are measured initially at fair value, net of direct issue costs. Interest is subsequently at amortised cost.
Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accrual basis in the Consolidated Income Statement using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396915": { "value": "Trade and other payables
Trade payables are non-interest bearing and are stated at amortised cost which approximates cost here due to the short term nature of the payables.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396892": { "value": "Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that the Group will be required to settle that obligation. Provisions are measured at the Directors\u2019 best estimate of the expenditure required to settle the obligation at the date of the statement of financial position and are discounted where the effect of the time value of money is material.
Restructuring provisions
A restructuring provision is recognised when the Group has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it, and the plan has reached a stage where the decision is unlikely to be reversed. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity.
Warranty provisions
Provisions for the expected cost of warranty obligations under contracts with customers and local sale of goods legislation are recognised in the month of sale of the relevant products, at the Directors\u2019 best estimate of the expenditure required to settle the Group\u2019s obligation.
For general warranty provisions, this estimate is based on historical trends. For specific warranty provisions, this estimate is based on the known faults in the product sold in the year.
Dilapidation provisions
Provisions for leased property dilapidation are recognised at the commencement of the lease using the Group\u2019s best estimate to settle the obligation at the end of the lease term.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396895": { "value": "Discontinued operations
A discontinued operation is a separate major line of business which has either been disposed of, abandoned or is classified as held for sale. If the asset or disposal groups is not classified as held for sale, the discontinued operations are not separately shown on the Statement of Financial Position.
To meet the classification as held for sale, the non-current asset or disposal group must meet these three criteria:
the carrying amount is to be recovered principally through a sale transaction rather than through continuing use
be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (or disposal groups)
the sale must be highly probable. This is considered the case when the board is committed to a plan to sell, an active program to locate a buyer and complete the plan must have been initiated. And the asset (or disposal group) must be actively marketed for sale at a price that is reasonable in relation to its current fair value.
Disclosure elections
The results of discontinued operations are presented separately as a single line in the consolidated income statement. Comparatives are restated in the statement of comprehensive income and related notes. In contrast the statement of financial position and cash flow statement is not restated.
Where there is intergroup trading between the continuing and discontinued operations, both external and intragroup transactions are included as a discontinued operation. This method\u2019s merit lies in its accurate representation of both entities\u2019 performance.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396933": { "value": "Discontinued operations
A discontinued operation is a separate major line of business which has either been disposed of, abandoned or is classified as held for sale. If the asset or disposal groups is not classified as held for sale, the discontinued operations are not separately shown on the Statement of Financial Position.
To meet the classification as held for sale, the non-current asset or disposal group must meet these three criteria:
the carrying amount is to be recovered principally through a sale transaction rather than through continuing use
be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (or disposal groups)
the sale must be highly probable. This is considered the case when the board is committed to a plan to sell, an active program to locate a buyer and complete the plan must have been initiated. And the asset (or disposal group) must be actively marketed for sale at a price that is reasonable in relation to its current fair value", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleAndDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396932": { "value": "Discontinued operations
A discontinued operation is a separate major line of business which has either been disposed of, abandoned or is classified as held for sale. If the asset or disposal groups is not classified as held for sale, the discontinued operations are not separately shown on the Statement of Financial Position.
To meet the classification as held for sale, the non-current asset or disposal group must meet these three criteria:
the carrying amount is to be recovered principally through a sale transaction rather than through continuing use
be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (or disposal groups)
the sale must be highly probable. This is considered the case when the board is committed to a plan to sell, an active program to locate a buyer and complete the plan must have been initiated. And the asset (or disposal group) must be actively marketed for sale at a price that is reasonable in relation to its current fair value.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396931": { "value": "Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in share premium as a deduction from the proceeds.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396894": { "value": "Own shares
No gain or loss is recognised in the Consolidated Income Statement on the purchase, sale, issue or cancellation of the Group\u2019s own shares. Instead, any difference between the carrying amount and the consideration paid is recognised in equity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396893": { "value": "Share-based payments
Equity settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant and is expensed on a straight-line basis over the vesting period, based on the Group\u2019s estimate of the number of shares that will eventually vest.
Cash-settled share-based payments are measured at fair value at grant date and remeasured at each reporting date and settlement. The liability is recognised in the statement of financial position, with changes in fair value recognised in profit or loss over the vesting period. Upon settlement, any difference between the payment and the liability is recorded in profit or loss.
Share-based payments where vesting is by reference to external, market based performance criteria (such as growth in an external index) are measured using the Monte Carlo simulation. Those which are subject only to internal, non-market based performance criteria and/or service conditions are measured using the Black-Scholes model.
For schemes that have non-market based performance conditions the number of options expected to vest is recalculated at each reporting date based on expectations of leavers prior to vesting. The number of options expected to vest for schemes with internal performance criteria is also adjusted based on expectations of performance against targets. No adjustments are made for expected performance against external, market based targets. Charges recognised in the Consolidated Income Statement in respect of equity-settled share-based payments are credited to the share-based payments reserve in equity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396875": { "value": "Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and the entities under its control (together the \u2018Group\u2019). Control is achieved when the Company has power to control the financial and operating policies of an entity either directly or indirectly and the ability to use that power to affect the returns it receives from its involvement with the entity.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies in line with those used by the Group. All intra-group transactions, balances, equity, income and expenses are eliminated on consolidation.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396921": { "value": "New accounting standards, amendments and interpretations adopted by the Group
The following new standards and amendments to existing standards became effective in January 2025 and have been adopted in the consolidated financial statements for the first time during the year ended 31 December 2025.
These have been assessed as having no financial or disclosure impact on these consolidated financial statements.
Date issued
Effective for
accounting periods
beginning on or after
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates
\u2013 Provides guidance to specify when a currency is exchangeable and how to determine the exchange rate when it is not.
August 2023
1 January 2025
4. Key sources of estimation uncertainty and critical accounting judgements
The preparation of financial statements requires management to make judgements, estimates and assumptions about the application of its accounting policies which affect the reported amounts of assets, liabilities, revenue and expenses. Actual amounts and results may differ from those estimates.
Judgements and estimates are evaluated regularly and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Any revisions to accounting estimates are recognised in the period in which the estimate is revised.
a) Critical accounting judgements
The accounting judgements and assumptions (excluding those which also involve estimates which are covered in the key sources of estimation uncertainty section below) included in the consolidated financial statements which have a material impact on amounts reported are as detailed below.
Capitalisation of development costs
The Group capitalises costs for product development projects. At 31 December 2025, the carrying amount of capitalised development costs was \u00a33,372,000 (2024: \u00a32,411,000). Development costs can be capitalised when they relate to a project that is technically feasible, there is the intention and are adequate resources to be able to complete the project, there are secure future economic benefits in excess of the development costs incurred and all such costs can be reliably measured.
Timing of revenue recognition
The assessment used by the Group to determine the timing of revenue recognition could have a significant impact on the amount and timing of revenue recognised. Under certain contracts entered into by the Product Print Systems and the Digital Imaging segments, revenue has been recognised over time (rather than at a point in time) following judgements taken as to the existence of alternative uses for the custom-built printing solutions being sold and whether the Group has an enforceable right to payment.
Firstly, the assessment of which customer projects include significant customisation (therefore have no alternative use) is based on the extent to which each machine is made to specific, detailed measurements at the request of a customer and takes into consideration the commercial reality underlying each contract. Whilst unlikely, it remains possible that custom-built machines may have an alternative use and could potentially be sold to a different customer. Nevertheless, this remote possibility is not deemed to change the determination of the timing of revenue recognition because selling to an alternative customer would necessitate modifications to the printhead/machinery, therefore, significant additional cost.
Secondly, when determining the timing of revenue recognition an assessment is made as to whether the contract contains an explicit enforceable right to payment for performance completed to date. During the year, the Group changed the method used to measure progress for the long term revenue contracts in its Product Print Systems segment from an input method to an output method. The output method has been adopted because management concluded that it provides a more faithful depiction of stage of completion of the contract and the revenue which can be irrevocably recognised.
Where the above factors are assessed to be present, the performance obligation under the contract is deemed to be satisfied over time.
For revenue recognised over time, management exercises judgement in selecting the most appropriate method to measure progress. The historical method was based on inputted labour hours versus budgeted/forecasted labour hours. Following a review of project delivery patterns and customer value transfer, management determined that an output method based on delivery of defined milestones better reflects the substance of the Group\u2019s performance obligations. In making this judgement, management considered:
The nature of milestones and customer acceptance points;
The extent to which costs incurred correlate (or do not correlate) with value delivered;
The availability of reliable data to track progress using each method; and
The increased clarity and verifiability provided by milestone based outputs.
Impact of change in measure of progress
The change from an input method to an output method to measure progress for revenue recognition is accounted for as a change in accounting estimate, consistent with IFRS principles for measuring progress toward satisfaction with performance obligations. The change has been applied prospectively to the contracts which were open at 1 January 2025 and any new contracts entered into during the year. This resulted in a \u00a3393,000 decrease in revenue for the year ended 31 December 2025. The impact arises because revenue is now recognised based on milestones delivered, rather than on labour hours expended. The effect on future periods cannot be estimated reliably due to the project specific nature of milestone timing and contract performance.
Classification of the Digital Imaging/FFEI CGU as discontinued operations
During the year, the Group finalised the planned restructuring of the FFEI Cash-Generating Unit (\u201cCGU\u201d). Under this plan, the Printbar part of the FFEI CGU has been migrated into the Printhead CGU, with the remaining FFEI Life Sciences activities ceasing during 2025. Management assessed the requirements of IFRS 5: Non-current Assets Held for Sale and Discontinued Operations and concluded that the FFEI CGU, excluding the Printbar activities transferring to the Printhead CGU, should be presented as a discontinued operation. Accordingly, the comparative figures for the year ended 31 December 2024 have been restated to reflect this presentation. Please see Note 11\u00a0for further detail.
This assessment required judgement in determining whether the restructuring plan represents the cessation of a separate major line of business.
Financial Statements
Strategic Report
Governance
Xaar plc Annual Report and Financial Statements 2025
113
4. Key sources of estimation uncertainty and critical accounting judgements continued
Management concluded that the Digital Imaging CGU meets the criteria under IFRS 5 due to its distinct operational structure, identifiable financial performance, and the fact that the activities that will cease are not expected to contribute to the Group\u2019s future operations after 2025.
Allocation of income and costs between continuing and discontinued operations
IFRS 5 requires that the results of discontinued operations be presented separately from those of continuing operations. Revenues and expenses directly attributable to the abandoned business within the Digital Imaging/FFEI CGU have been included within discontinued operations. However, certain shared costs \u2013 particularly central support functions, operational overheads and facilities costs \u2013 required allocation between continuing and discontinued operations.
Management exercised judgement in identifying an allocation methodology that is consistent, supportable and reflective of how resources are consumed across the Group. The Group adopted a revenue-based allocation model, whereby shared costs are apportioned based on the relative share of revenue generated by continuing and discontinued operations during the period.
Management considers this method to provide a reasonable and representationally faithful allocation basis because:(i) revenue is an objective indicator of operational scale and utilisation of shared resources;(ii) the method is aligned with how management historically assessed cost-to-revenue relationships for internal performance monitoring; and(iii) it provides a consistent and transparent basis for comparability between current and prior year results.
The judgement applied in selecting and implementing this allocation methodology has a direct impact on the reported results of both continuing and discontinued operations, particularly in relation to operating profit and margin.
Management believes the use of a revenue-based allocation approach is appropriate in the context of the restructuring of the Digital Imaging business and provides users of the financial statements with the most reliable and comparable information.
b) Key sources of estimation uncertainty
The accounting estimates included in the consolidated financial statements which have a material impact on amounts reported are as detailed below.
Fair value measurement of contingent consideration
An element of the consideration receivable for the Group\u2019s divestment in November 2021 of its remaining interest in the share capital of Xaar 3D Limited remains contingent on achievement of certain revenue milestones and performance targets. Contingent consideration, resulting from business combinations, is valued at fair value at the acquisition date as part of the business combination. When the contingent consideration meets the definition of a financial asset, it is subsequently remeasured to fair value at each reporting date with any fair value gains or losses being recognised in the Consolidated Income Statement.
Fair value is estimated using the Monte Carlo simulation. Certain inputs into this statistical model involve estimation; namely, the risk adjusted discount rate and revenue volatility. These estimates are subject to rapid changes in market conditions that cannot always be fully anticipated. In light of the materiality of contingent consideration held in the Consolidated Statement of Financial Position, this uncertainty is considered to represent a key source of estimation uncertainty. Full sensitivity to changes in these estimates is provided in Note 28.
Impairment of goodwill and other intangible assets
The cost and carrying amount of goodwill at 31 December 2025 was \u00a36,959,000 (2024: \u00a36,959,000). Goodwill is deemed to have an indefinite useful economic life and is, therefore, not amortised. As a result, the Group reviews goodwill for impairment on at least an annual basis and more frequently where there are indicators of potential impairment. The impairment review requires the value-in-use of each CGU to be determined; and these calculations are based on a number of assumptions. Areas of significant judgement include:
the estimation of future cash flows;
the selection of risk and the estimation of risk adjustment factors to be applied to cash flows;
the selection of an appropriate discount rate to calculate present value; and
the selection of an appropriate terminal growth rate.
The assumptions used in the impairment test are detailed in Note 15.\u00a0The assumptions relating to future cash flows, estimated useful economic lives and discount rates are based on forecasts and are, therefore, inherently judgemental. Future events could result in the assumptions used needing to be revised, changing the outcome of the impairment test and resulting in impairment charges being recognised in the Consolidated Income Statement.
Revenue recognition \u2013 estimating stage of completion of contracts
Revenue receivable under contracts with customers for the manufacture of bespoke machinery and equipment as well as for the provision of research and development consultancy services is generally required to be recognised over a period of time in line with the stage of completion of each contract with the customer. Such contractual arrangements are isolated to the EPS and FFEI segments.
During the year, the Group changed the method used to measure progress for the long term revenue contracts in its EPS segment from an input method to an output method. The output method has been adopted because management concluded that it provides a more faithful depiction of stage of completion of the contract and the revenue which can be irrevocably recognised. The output method reflects performance based on objectively verifiable milestones and deliverables such as design completion, assembly completion and factory acceptance testing.
The aggregate transaction price allocated to partially satisfied and unsatisfied performance obligations under open contracts with customers as at the balance sheet date is set out in Note 6.
Xaar plc Annual Report and Financial Statements 2025
114
Notes to the consolidated financial statements continued
for the year ended 31 December 2025
4. Key sources of estimation uncertainty and critical accounting judgements continued
Inventory write down
The Group is required to write inventory down to the lower of cost and net realisable value. To determine the write down of inventory the Group estimates the future sales volumes, sales prices, costs to sell inventory and shrinkage. The gross value and write down of inventories, as well as cost of inventory write downs in the period, are disclosed in Note 20. The Group uses a range of different techniques to write down inventory to the lower of cost and net realisable value including a formulaic methodology based on the age of inventory. The aged inventory methodology writes down inventory by a specific percentage based on time elapsed from purchase date and these specific percentages are based on historical data. The uncertainty associated with estimating the write down of inventory is whether the realisable value on sale or disposal of inventory approximates the value of inventory after write downs have been applied. The ultimate sale or disposal of inventory results in a reversal of the write down against the cost of inventory disposed with a potential gain or loss depending upon the accuracy of the estimation.
Tax provision
During the year, the Group recognised a provision relating to indirect tax liabilities in our overseas jurisdictions. The determination of the provision required significant management judgement due to the inherent uncertainty associated with the tax position and the range of potential outcomes.The provision has been calculated with support from external third-party advisors, who assisted in assessing the technical merits of the position and the potential exposure. In estimating the amount to be provided, management considered a range of factors, including but not limited to: (i) eligibility for exemptions on products; (ii) applicable tax rates and interest rates in the relevant jurisdictions; and (iii) the look-back period under assessment.
Because the final resolution of this matter may differ from the amount recognised, the provision represents a key source of estimation uncertainty. Changes in assumptions, future tax authority correspondence, or the outcome of any disclosure process could result in a materially different liability being recognised in future periods.
Capitalisation of development costs
The Group capitalises costs for product development projects. At 31 December 2025, the carrying amount of capitalised development costs was \u00a33,372,000 (2024: \u00a32,411,000). Development costs can be capitalised when they relate to a project that is technically feasible, there is the intention and are adequate resources to be able to complete the project, there are secure future economic benefits in excess of the development costs incurred and all such costs can be reliably measured.
Fair value measurement of contingent consideration
An element of the consideration receivable for the Group\u2019s divestment in November 2021 of its remaining interest in the share capital of Xaar 3D Limited remains contingent on achievement of certain revenue milestones and performance targets. Contingent consideration, resulting from business combinations, is valued at fair value at the acquisition date as part of the business combination. When the contingent consideration meets the definition of a financial asset, it is subsequently remeasured to fair value at each reporting date with any fair value gains or losses being recognised in the Consolidated Income Statement.
Fair value is estimated using the Monte Carlo simulation. Certain inputs into this statistical model involve estimation; namely, the risk adjusted discount rate and revenue volatility. These estimates are subject to rapid changes in market conditions that cannot always be fully anticipated. In light of the materiality of contingent consideration held in the Consolidated Statement of Financial Position, this uncertainty is considered to represent a key source of estimation uncertainty. Full sensitivity to changes in these estimates is provided in Note 28.
Impairment of goodwill and other intangible assets
The cost and carrying amount of goodwill at 31 December 2025 was \u00a36,959,000 (2024: \u00a36,959,000). Goodwill is deemed to have an indefinite useful economic life and is, therefore, not amortised. As a result, the Group reviews goodwill for impairment on at least an annual basis and more frequently where there are indicators of potential impairment. The impairment review requires the value-in-use of each CGU to be determined; and these calculations are based on a number of assumptions. Areas of significant judgement include:
the estimation of future cash flows;
the selection of risk and the estimation of risk adjustment factors to be applied to cash flows;
the selection of an appropriate discount rate to calculate present value; and
the selection of an appropriate terminal growth rate.
The assumptions used in the impairment test are detailed in Note 15.\u00a0The assumptions relating to future cash flows, estimated useful economic lives and discount rates are based on forecasts and are, therefore, inherently judgemental. Future events could result in the assumptions used needing to be revised, changing the outcome of the impairment test and resulting in impairment charges being recognised in the Consolidated Income Statement.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAssetsAndLiabilitiesWithSignificantRiskOfMaterialAdjustmentExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396888": { "value": "Contingent consideration, resulting from business combinations, is valued at fair value at the acquisition date as part of the business combination. When the contingent consideration meets the definition of a financial asset, it is subsequently remeasured to fair value at each reporting date with any fair value gains or losses being recognised in the Consolidated Income Statement.Fair value is estimated using the Monte Carlo simulation. Certain inputs into this statistical model involve estimation; namely, the risk adjusted discount rate and revenue volatility. These estimates are subject to rapid changes in market conditions that cannot always be fully anticipated. In light of the materiality of contingent consideration held in the Consolidated Statement of Financial Position, this uncertainty is considered to represent a key source of estimation uncertainty. Full sensitivity to changes in these estimates is provided in Note 28.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7397544": { "value": "5. Operating segments
The Group\u2019s operating segments are determined based on the internal reporting to the Chief Operating Decision Maker (CODM). The CODM has been determined to be the Chief Executive Officer, with support from the other members of the Board of Directors, being the individual who is primarily responsible for the allocation of resources to segments and the assessment of performance of the segments.
The principal activities of the Group are presented in the following segments: \u2018Printhead\u2019, \u2018EPS\u2019, \u2018Megnajet\u2019 and the discontinued 'FFEI'. This presentation reflects how the Group\u2019s operating performance is reviewed internally by management.
In 2024 the 'FFEI' business unit was reorganised into two separate major lines of business, Life Sciences and Printbar. The Printbar part of FFEI was gradually integrated with Printhead, and Life Sciences part of the business was gradually reduced until finally being abandoned in Q1 2025. The FFEI segment has been restated to include only the discontinued operations. Refer discontinued operations note 11.
Income Statement
Year ended 31 December 2025
Printhead\u00a3\u2019000
EPS\u00a3\u2019000
Megnajet\u00a3\u2019000
Head Office Entities\u00a3\u2019000
Total Continuing\u00a3\u2019000
Discontinued\u2013 FFEI\u00a3\u2019000
Total\u00a3\u2019000
Revenue \u2013 total
\u00a044,420
\u00a014,460
\u00a03,779
\u00a0\u2013
\u00a062,659
\u00a0314
\u00a062,973
Revenue \u2013 intra segment
(1,390)
\u00a0\u2013
(1,214)
\u00a0\u2013
(2,604)
\u00a0\u2013
(2,604)
Revenue \u2013 external
\u00a043,030
\u00a014,460
\u00a02,565
\u00a0\u2013
\u00a060,055
\u00a0314
\u00a060,369
Adjusted operating (loss) / profit
\u00a05,712
\u00a01,341
\u00a0799
(6,704)
\u00a01,148
(60)
\u00a01,088
Adjusting items (Note 8)
(200)
(1,129)
(355)
(2,331)
(4,015)
(360)
(4,375)
Operating (loss) / profit
\u00a05,512
\u00a0212
\u00a0444
(9,035)
(2,867)
(420)
(3,287)
Year ended 31 December 2024
Printhead*
\u00a3\u2019000
Product
Print Systems (EPS)
\u00a3\u2019000
Ink Supply Systems (Megnajet)
\u00a3\u2019000
Head Office Entities
\u00a3\u2019000
Total Continuing\u00a3\u2019000
Discontinued \u2013 Digital Imaging\u00a0(FFEI)*
\u00a3\u2019000
Total \u00a3\u2019000
Revenue \u2013 total
\u00a037,075
\u00a016,807
\u00a03,417
\u2013
\u00a057,299
\u00a07,654
\u00a064,953
Revenue \u2013 intra segment
(1,908)
(731)
(906)
\u00a0\u2013
(3,545)
\u00a0\u2013
(3,545)
Revenue \u2013 external
\u00a035,167
\u00a016,076
\u00a02,511
\u00a0\u2013
\u00a053,754
\u00a07,654
\u00a061,408
Adjusted operating (loss) / profit
\u00a03,045
\u00a01,211
\u00a01,093
(5,955)
(606)
\u00a01,273
\u00a0667
Adjusting items\u00a0(Note 8)**
(772)
(867)
(363)
(6,410)
(8,412)
(3,481)
(11,893)
Operating (loss) / profit**
\u00a02,273
\u00a0344
\u00a0730
(12,365)
(9,018)
(2,208)
(11,226)
*Restated Printhead to include the Printbar part of the continuing operations migrated from FFEI.
**Restated as per note 31.
Xaar plc Annual Report and Financial Statements 2025
116
Notes to the consolidated financial statements continued
for the year ended 31 December 2025
5. Operating segments continued
Statement of financial position
Assets are allocated to the segment which has responsibility for their control. No information is provided for segment liabilities as this measure is not provided to the CODM.
As at 31 December 2025
Printhead \u00a3'000
EPS
\u00a0\u00a3'000
Megnajet \u00a3'000
Head Office Entities \u00a3'000
Discontinued
FFEI \u00a3'000
Total \u00a3'000
Non-current assets
\u00a018,038
\u00a010,490
\u00a01,221
\u00a03,824
\u00a03
\u00a033,576
Current assets
\u00a033,138
\u00a06,797
\u00a02,024
\u00a02,422
\u00a0304
\u00a044,685
Total segment assets
\u00a051,176
\u00a017,287
\u00a03,245
\u00a06,246
\u00a0307
\u00a078,261
As at 31 December 2024
Printhead
\u00a3\u2019000
Product Print Systems (EPS)
\u00a3\u2019000
Ink Supply Systems (Megnajet)
\u00a3\u2019000
Head Office Entities
\u00a3\u2019000
Digital Imaging (FFEI)\u00a3\u2019000
Total
\u00a3\u2019000
Non-current assets**
\u00a017,294
\u00a09,458
\u00a01,347
\u00a05,236
\u00a0698
\u00a034,033
Current assets
\u00a029,884
\u00a07,247
\u00a02,529
\u00a02,295
\u00a05,295
\u00a047,250
Total segment assets**
\u00a047,178
\u00a016,705
\u00a03,876
\u00a07,531
\u00a05,993
\u00a081,283
Other segment information
Year ended 31 December 2025
Printhead
\u00a3\u2019000
EPS
\u00a3\u2019000
Megnajet
\u00a3\u2019000
Head Office Entities
\u00a3\u2019000
Discontinued FFEI
\u00a3\u2019000
Total
\u00a3\u2019000
Depreciation and amortisation
\u00a02,931
\u00a0266
\u00a063
\u00a0117
\u00a0\u2013
\u00a03,377
Share-based payment charge
\u00a0276
\u00a0\u2013
\u00a09
\u00a0546
\u00a0\u2013
\u00a0831
Capital expenditure
\u00a01,568
\u00a0392
\u00a0\u2013
\u00a0\u2013
\u00a0\u2013
\u00a01,960
Year ended 31 December 2024
Printhead
\u00a3\u2019000
Product Print Systems (EPS)
\u00a3\u2019000
Ink Supply Systems (Megnajet)\u00a3\u2019000
Head Office Entities\u00a3\u2019000
Digital Imaging (FFEI)\u00a3\u2019000
Total
\u00a3\u2019000
Depreciation and amortisation
\u00a02,941
\u00a0284
\u00a0377
\u00a0117
\u00a01,901
\u00a05,620
Share-based payment charge
\u00a0623
\u00a0\u2013
\u00a033
\u00a0286
\u00a0154
\u00a01,096
Capital expenditure
\u00a0586
\u00a0350
\u00a0\u2013
\u00a0\u2013
\u2013
\u00a0936
*\tThe Digital Imaging/FFEI segment has been restated to include only the discontinued operations.
**Restated for Deferred tax asset as per note 31.
6. Revenue
The Group derives its revenue from the provision of goods and services both at a point in time and over time:
2025
2024*
\u00a3\u2019000
\u00a3\u2019000
Revenue recognised at point in time
57,545
49,621
Revenue recognised over time
2,510
4,133
60,055
53,754
* 2024 restated to be from continuing operations as per note 11.
Revenues from the top five customers represent 28% of revenues (2024: 27%). The Group\u2019s largest customer represents 12% of its revenues (2024:13%).
Geographical information
Revenues are attributed to regions based primarily on customers' location. The Group's revenue from external customers and information about its non-current segment assets (excluding deferred tax and financial assets) is set out below:
Revenue
Non-current assets
2025
\u00a3\u2019000
2024*
\u00a3\u2019000
2025
\u00a3\u2019000
2024*
\u00a3\u2019000
The Americas
25,729
26,265
7,759
8,090
EMEA
15,688
17,859
19,481
\u00a021,081
China
16,650
7,533
480
\u00a0149
Rest of Asia Pacific
1,988
2,097
\u2013
\u2013
60,055
53,754
27,720
\u00a029,320
* 2024 restated to be from continuing operations. For discontinued operations refer to note 11.
Revenue by operating segment and type
The following table shows the disaggregation of revenue by major product/service lines for continuing operations.
Product sales
Commissions & services
Total
2025
\u00a3\u2019000
2024*
\u00a3\u2019000
2025
\u00a3\u2019000
2024*
\u00a3\u2019000
2025
\u00a3\u2019000
2024*
\u00a3\u2019000
Printhead**
40,811
\u00a032,969
2,219
\u00a02,198
43,030
\u00a035,167
EPS/Product Print Systems
13,681
\u00a015,409
779
\u00a0667
14,460
\u00a016,076
Megnajet/Ink Supply Systems
2,565
\u00a02,511
\u2013
2,565
\u00a02,511
57,057
\u00a050,889
2,998
\u00a02,865
60,055
\u00a053,754
*2024 restated to be from continuing operations as per note 11.
**Printhead 2024 figures restated to include the transferred business from the Digital Imaging (FFEI) CGU.
Partially completed contracts
The operating segments Product Print Systems and Digital Imaging (2024 only) have contracts with customers where the performance obligations are partially unsatisfied at 31 December 2025. The transaction price is allocated between the proportionately satisfied and unsatisfied performance obligations. The satisfied portion has been recognised whilst the transaction price allocated to the unsatisfied portion has not been recognised.
2025
\u00a3\u2019000
2024
\u00a3\u2019000
Partially satisfied performance conditions
2,553
\u00a03,493
Partially unsatisfied performance conditions
1,587
70
4,140
\u00a03,563
\u00a31,587,000 of partially unsatisfied performance conditions will be recognised in the year ending 31 December 2026 (2024: \u00a3935,000 in 2025, \u00a313,000 in future periods).
Partially completed contracts
The operating segments Product Print Systems and Digital Imaging (2024 only) have contracts with customers where the performance obligations are partially unsatisfied at 31 December 2025. The transaction price is allocated between the proportionately satisfied and unsatisfied performance obligations. The satisfied portion has been recognised whilst the transaction price allocated to the unsatisfied portion has not been recognised.
2025
\u00a3\u2019000
2024
\u00a3\u2019000
Partially satisfied performance conditions
2,553
\u00a03,493
Partially unsatisfied performance conditions
1,587
70
4,140
\u00a03,563
\u00a31,587,000 of partially unsatisfied performance conditions will be recognised in the year ending 31 December 2026 (2024: \u00a3935,000 in 2025, \u00a313,000 in future periods).
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredIncomeExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396898": { "value": "Operating (loss) / profit for the year is stated after charging / (crediting):
Notes
Year ended
31 December 2025
\u00a3\u2019000
Year ended
31 December 2024
\u00a3\u2019000
Research and development expenses
4,676
\u00a05,256
UK research and development tax credits
(549)
\u00a0(228)
Depreciation of property, plant and equipment
2,471
\u00a02,751
Impairment losses on property, plant and equipment
8
\u00a0112
Loss on disposal of property, plant and equipment
111
\u00a0126
Depreciation of right-of-use assets
774
\u00a01,050
Impairment losses on right-of-use assets
\u2013
\u00a0272
Amortisation of other intangible assets
443
\u00a01,819
Impairment of other intangible assets
\u2013
502
Loss on disposal of intangible assets
14
\u2013
Profit on disposal of right-of-use assets
(8)
\u2013
Costs of inventories recognised as an expense
20,697
\u00a035,230
Write down of inventories as an expense
525
\u00a02,741
Impairment losses on financial assets
(176)
(78)
Impairment of contract assets
\u2013
514
Exceptional legal matters
488
354
Net gain / (loss) on foreign exchange
754
(48)
Net gain / (loss) on foreign exchange
754
(48)
Auditor\u2019s remuneration comprised the following:
Year ended
31 December 2025
\u00a3\u2019000
Year ended
31 December 2024
\u00a3\u2019000
Audit Services \u2013 Group and Company audit
550
508
Audit Services \u2013 related to prior year
40
\u2013
Total audit fees
590
508
Audit related assurance services
\u2013
\u2013
\u2013 Interim review
\u2013
72
Total assurance-related fees
\u2013
72
Total auditor remuneration
590
580
The Group\u2019s policy on the use of the auditor for non-audit services is set out in the Audit Committee Report on Pages 64\u00a0to 67.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396902": { "value": "9. Employees and Directors
The average monthly number of employees including Executive Directors was:
Year ended
31 December 2025
Number
Year ended
31 December 2024
Number
Research and development
48
52
Sales and marketing
44
46
Manufacturing and engineering
182
198
Administration
59
63
333
\u00a0359
Their aggregate remuneration comprised:
Year ended
31 December 2025
\u00a3\u2019000
Year ended
31 December 2024
\u00a3\u2019000
Wages and salaries
21,139
20,557
Social security costs
2,332
2,307
Post retirement benefits
894
1,159
Share-based payments charge
855
1,097
Less: capitalised as development costs
(806)
\u2013
Total staff costs
24,414
\u00a025,120
Directors\u2019 Remuneration
The remuneration of the Directors, including rewards under share schemes and other contractual benefits, is included in the Directors\u2019 Remuneration report on\u00a0pages 70\u00a0to 92.
Key Management Personnel
Key management personnel consist of the Group\u2019s Board of Directors.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396901": { "value": "9. Employees and Directors
The average monthly number of employees including Executive Directors was:
Year ended
31 December 2025
Number
Year ended
31 December 2024
Number
Research and development
48
52
Sales and marketing
44
46
Manufacturing and engineering
182
198
Administration
59
63
333
\u00a0359
Their aggregate remuneration comprised:
Year ended
31 December 2025
\u00a3\u2019000
Year ended
31 December 2024
\u00a3\u2019000
Wages and salaries
21,139
20,557
Social security costs
2,332
2,307
Post retirement benefits
894
1,159
Share-based payments charge
855
1,097
Less: capitalised as development costs
(806)
\u2013
Total staff costs
24,414
\u00a025,120
Directors\u2019 Remuneration
The remuneration of the Directors, including rewards under share schemes and other contractual benefits, is included in the Directors\u2019 Remuneration report on\u00a0pages 70\u00a0to 92.
Key Management Personnel
Key management personnel consist of the Group\u2019s Board of Directors.
30. Retirement benefit schemes
The UK based employees of the Group\u2019s UK companies have the option to be members of a defined contribution pension scheme managed by a third party pension provider. For each employee who is a member of the scheme, the Group contributes a fixed percentage of each employee\u2019s salary to\u00a0the scheme. The only obligation of the Group with respect to this scheme is to make the specified contributions.
In addition to the above, the Group complies with all retirement benefit scheme requirements in all other jurisdictions in which it has employees.
The total cost charged to the Consolidated Income Statement in respect of all of the Group's retirement benefit schemes during the year was \u00a3894,000 (2024: \u00a31,159,000). As at 31 December 2025 contributions of \u00a3150,000 (2024: \u00a3198,000) due in respect of the current reporting period had not been paid over to the schemes.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396942": { "value": "Key Management Personnel
Key management personnel consist of the Group\u2019s Board of Directors.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7397546": { "value": "10. Finance income and costs
Year ended
31 December 2025
\u00a3\u2019000
Year ended
31 December 2024*
\u00a3\u2019000
Interest receivable
67
\u00a085
Finance income from continuing operations
67
85
Interest expense on lease liabilities
(302)
(189)
Interest payable on bank borrowings
(82)
(137)
Interest expense on invoice securitisation / discounting
(52)
(95)
Other interest costs
(25)
(18)
Finance costs from continuing operations
(461)
(439)
* 2024 restated to be from continuing operations as per\u00a0note 11.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7397545": { "value": "10. Finance income and costs
Year ended
31 December 2025
\u00a3\u2019000
Year ended
31 December 2024*
\u00a3\u2019000
Interest receivable
67
\u00a085
Finance income from continuing operations
67
85
Interest expense on lease liabilities
(302)
(189)
Interest payable on bank borrowings
(82)
(137)
Interest expense on invoice securitisation / discounting
(52)
(95)
Other interest costs
(25)
(18)
Finance costs from continuing operations
(461)
(439)
* 2024 restated to be from continuing operations as per\u00a0note 11.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396949": { "value": "10. Finance income and costs
Year ended
31 December 2025
\u00a3\u2019000
Year ended
31 December 2024*
\u00a3\u2019000
Interest receivable
67
\u00a085
Finance income from continuing operations
67
85
Interest expense on lease liabilities
(302)
(189)
Interest payable on bank borrowings
(82)
(137)
Interest expense on invoice securitisation / discounting
(52)
(95)
Other interest costs
(25)
(18)
Finance costs from continuing operations
(461)
(439)
* 2024 restated to be from continuing operations as per\u00a0note 11.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingCostsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396947": { "value": "10. Finance income and costs
Year ended
31 December 2025
\u00a3\u2019000
Year ended
31 December 2024*
\u00a3\u2019000
Interest receivable
67
\u00a085
Finance income from continuing operations
67
85
Interest expense on lease liabilities
(302)
(189)
Interest payable on bank borrowings
(82)
(137)
Interest expense on invoice securitisation / discounting
(52)
(95)
Other interest costs
(25)
(18)
Finance costs from continuing operations
(461)
(439)
* 2024 restated to be from continuing operations as per\u00a0note 11.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396946": { "value": "10. Finance income and costs
Year ended
31 December 2025
\u00a3\u2019000
Year ended
31 December 2024*
\u00a3\u2019000
Interest receivable
67
\u00a085
Finance income from continuing operations
67
85
Interest expense on lease liabilities
(302)
(189)
Interest payable on bank borrowings
(82)
(137)
Interest expense on invoice securitisation / discounting
(52)
(95)
Other interest costs
(25)
(18)
Finance costs from continuing operations
(461)
(439)
* 2024 restated to be from continuing operations as per\u00a0note 11.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396944": { "value": "10. Finance income and costs
Year ended
31 December 2025
\u00a3\u2019000
Year ended
31 December 2024*
\u00a3\u2019000
Interest receivable
67
\u00a085
Finance income from continuing operations
67
85
Interest expense on lease liabilities
(302)
(189)
Interest payable on bank borrowings
(82)
(137)
Interest expense on invoice securitisation / discounting
(52)
(95)
Other interest costs
(25)
(18)
Finance costs from continuing operations
(461)
(439)
* 2024 restated to be from continuing operations as per\u00a0note 11.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396943": { "value": "10. Finance income and costs
Year ended
31 December 2025
\u00a3\u2019000
Year ended
31 December 2024*
\u00a3\u2019000
Interest receivable
67
\u00a085
Finance income from continuing operations
67
85
Interest expense on lease liabilities
(302)
(189)
Interest payable on bank borrowings
(82)
(137)
Interest expense on invoice securitisation / discounting
(52)
(95)
Other interest costs
(25)
(18)
Finance costs from continuing operations
(461)
(439)
* 2024 restated to be from continuing operations as per\u00a0note 11.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396922": { "value": "12. Tax
Year ended
31 December
Year ended
31 December
2025
2024 restated*
\u00a3\u2019000
\u00a3\u2019000
Current tax
Current income tax charge / (credit) \u2013 UK
132
(259)
Current income tax charge \u2013 overseas
4
238
Adjustment in respect of prior years
(83)
(400)
53
(421)
Deferred tax
Origination and reversal of temporary differences
(295)
(376)
Adjustment in respect of prior years
\u2013
(18)
Deferred tax from continuing operations
(295)
(394)
Total tax credit
(242)
(815)
Reconciliation of tax credit
The tax credit for the year differs from the standard rate of corporation tax in the UK of 25%. The differences are explained below:
Year ended
31 December
Year ended
31 December
Year ended
31 December
Year ended
31 December
2025
2025
2024 restated*
2024 restated*
\u00a3\u2019000
%
\u00a3\u2019000
%
Loss before tax from continuing operations
(3,261)
\u2013
(9,372)
\u2013
loss before tax from discontinued operations
(358)
\u2013
(2,215)
\u2013
Loss before tax
(3,619)
\u2013
(11,587)
\u2013
Notional tax charge at the UK corporation tax rate of 25.0% (2024: 25.0%)
(905)
25.0%
(2,897)
25.0%
Effects of:
Tax effect of non-deductible expenses**
406
(11.2)%
1,829
(15.8%)
Tax effect of non-taxable income
(20)
0.6%
(30)
0.3%
R&D SME tax credit
131
(3.6)%
91
(0.8%)
Adjustments in respect of overseas tax rates
(15)
0.4%
20
(0.2%)
Utilisation of brought forward losses previously unrecognised
605
(16.7)%
650
(5.6%)
Adjustments in respect of prior years
(88)
2.4%
(396)
3.4%
Foreign exchange on translation of balances
12
(0.3)%
(34)
0.3%
Movement in share options***
(354)
9.8%
\u2013
\u2013
Total tax credit and effective tax rate
(228)
6.3%
(767)
6.6%
Tax credit from continuing operations
(242)
(815)
Tax charge from discontinued operations
14
48
* Refer to notes 11\u00a0and\u00a031\u00a0for prior year restatement.
** Expenses not deductible for tax purposes predominantly consist of valuation and exchange rate movements on capital items.
*** Non-deductible and disclosed within non-deductible expenses in prior year.
Financial Statements
Strategic Report
Governance
Xaar plc Annual Report and Financial Statements 2025
123
12. Tax continued
Effective tax rate
The analysis of the Group\u2019s effective tax rate between adjusted and total reported activities is as follows:
Year ended 31 December 2025
Year ended 31 December 2024 restated*
Adjusted
\u00a3\u2019000
Adjusting items
\u00a3\u2019000
Total reported
\u00a3\u2019000
Adjusted
\u00a3\u2019000
Adjusting items
\u00a3\u2019000
Total reported
\u00a3\u2019000
Profit/(loss) before tax from continued operations
754
(4,015)
(3,261)
(960)
(8,412)
(9,372)
Profit/(loss) before tax from discontinued operations
2
(360)
(358)
1,266
(3,481)
(2,216)
Profit/(loss) before tax
756
(4,375)
(3,619)
306
(11,893)
(11,588)
Tax credit from continuing operations
109
133
242
277
538
815
Tax credit/(charge) from discontinued operations
(20)
6
(14)
(41)
(7)
(48)
Total tax credit to Income Statement
89
139
228
236
531
767
Effective tax rate \u2013 continued operations
(14)%
3%
7%
29%
6%
9%
Effective tax rate \u2013 total
(12)%
3%
6%
(77)%
4%
7%
* Refer to notes 11\u00a0and\u00a031\u00a0for prior year restatement.
Factors affecting the tax charge of future years
Future tax charges, therefore the Group\u2019s effective tax rate, may be affected by factors such as acquisitions, disposals, restructuring and tax regime reforms.
The effective tax rate of the Group changes depending on the relative before tax results of our UK and US businesses.
No planned UK corporation tax rate changes have been announced by the UK Government. The corporation tax rate is currently 25%.
No planned US corporation tax rate changes have been announced by the US Government. The federal tax rate is currently 21%.
Reconciliation of tax receivable/(payable)
The below is an enhanced disclosure to aid the user to follow the movement in the current tax asset. This will be disclosed on a prospective basis.
\u00a3\u2019000
Current Tax receivable at 31 December 2024
346
Current Tax (Charge)/credit to income statement
(53)
Current Tax (Charge)/credit for discontinued operations
(14)
RDEC credit through P&L
586
Deferred Income RDEC on capitalised R&D
184
Tax received
23
FX movement on translation
8
Current Tax receivable at 31 December 2025
1,080
13. Earnings per share
Basic earnings per share and adjusted basic earnings per share are calculated by dividing the earnings attributable to the equity shareholders of the Company by the weighted average number of shares outstanding during the year. Diluted earnings per share and adjusted diluted earnings per share are calculated on the same basis as basic earnings per share but with a further adjustment to the weighted average number of shares outstanding to assume conversion of all potentially dilutive ordinary shares. Such potentially dilutive ordinary shares comprise share options and awards granted to employees where the exercise price is less than the average market price of the Company\u2019s ordinary shares during the year and any unvested shares which have met, or are expected to meet, the performance conditions at the end of the year.
Year ended
31 December 2025
\u00a3\u2019000
Year ended
31 December 2024 restated*
\u00a3\u2019000
Earnings
Profit / (loss) attributable to equity shareholders of the parent \u2013 adjusted
863
(683)
Adjusting items \u2013 continuing operations
(3,882)
(7,874)
(Loss) from attributable to equity shareholders of the parent \u2013 reported
(3,019)
(8,557)
(Loss) / profit from discontinued operations \u2013 adjusted
(18)
1,225
Adjusting items \u2013 discontinued operations
(354)
(3,488)
(Loss) from discontinued operations \u2013 reported
(372)
(2,263)
(Loss) attributable to equity shareholders of the parent \u2013 reported
(3,390)
(10,820)
* Restated due to discontinued operations \u2013 refer to note 11.
\u00a0Number
\u00a0Number
Number of shares
Weighted average number of ordinary shares in issue
79,530,296
\u00a079,377,941
Less: ordinary shares held by Xaar Trustee Limited and the Xaar Plc ESOP Trust
(516,739)
(313,201)
Weighted average number of ordinary shares for the purposes of basic EPS
79,013,557
\u00a079,064,740
Effect of potentially dilutive ordinary shares \u2013 share options and awards
1,058,996
\u00a02,581,021
Weighted average number of ordinary shares for the purposes of diluted EPS
80,072,553
\u00a081,645,761
Year ended
31 December 2025
Pence per share
Year ended
31 December 2024 restated*
Pence per share
Basic loss per share \u2013 continuing operations
(3.8)
(10.8)
Basic loss per share \u2013 discontinued operations
(0.5)
(2.9)
Basic loss per share
(4.3)
(13.7)
Diluted loss per share \u2013 continuing operations
(3.8)
(10.8)
Diluted loss per share \u2013 discontinued operations
(0.5)
(2.9)
Diluted loss per share**
(4.3)
(13.7)
Adjusted basic earnings / (loss) per share \u2013 continuing operations
1.1
(0.9)
Adjusted basic earnings / (loss) per share \u2013 discontinued operations
(0.0)
1.5
Adjusted basic earnings per share
1.1
0.7
Adjusted diluted earnings / (loss) per share \u2013 continuing operations
1.1
(0.9)
Adjusted diluted earnings / (loss) per share \u2013 discontinued operations
(0.0)
1.5
Adjusted diluted earnings per share
1.1
0.6
* Restated due to discontinued operations \u2013 refer to note 11.
** Where the undiluted earnings per share is a loss, potentially dilutive shares are not included as including them would be anti-dilutive. Hence in this situation diluted earnings per share equals basic earnings per share.
Basic earnings per share and adjusted basic earnings per share are calculated by dividing the earnings attributable to the equity shareholders of the Company by the weighted average number of shares outstanding during the year. Diluted earnings per share and adjusted diluted earnings per share are calculated on the same basis as basic earnings per share but with a further adjustment to the weighted average number of shares outstanding to assume conversion of all potentially dilutive ordinary shares. Such potentially dilutive ordinary shares comprise share options and awards granted to employees where the exercise price is less than the average market price of the Company\u2019s ordinary shares during the year and any unvested shares which have met, or are expected to meet, the performance conditions at the end of the year.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396923": { "value": "14. Dividends
No interim or final dividend was proposed or paid during either the current or preceding year.
The Board of Directors are mindful of the importance of dividends to its shareholders and intends to resume the payment of dividends as soon as conditions allow.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7397548": { "value": "15. Goodwill
31 December 2025
\u00a3\u2019000
31 December 2024
\u00a3\u2019000
Cost and carrying amount
Balance at 1 January
6,959
\u00a06,873
Exchange differences
(383)
\u00a086
Balance at 31 December
6,576
\u00a06,959
Allocated to Printhead CGU
1,350
\u00a0\u2013
Allocated to Product Print Systems (EPS) CGU
5,226
\u00a05,609
Allocated to Digital Imaging (FFEI) CGU
\u2013
\u00a0689
Allocated to Ink Supply Systems (Megnajet) CGU
\u2013
\u00a0661
Total
6,576
\u00a06,959
The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired. Having performed impairment testing, no impairment has been identified and therefore no impairment loss has been recognised during the current year.
Goodwill balances have been tested for impairment on the following basis:
The outcome of the impairment assessments conducted are dependent on estimates which have been subject to sensitivity analyses before a conclusion on impairment was made. It is management's view that the key assumptions are revenue growth, gross margin % and discount rate. Any reasonable possible change to these sensitivities that could result in an impairment charge have been disclosed below:
EPS impairment review
Using a discount rate of 14.3% (2024: 15.0%) the recoverable amount calculated exceeds the carrying value of the CGU by $8.3 million (2024: $11.8 million). The carrying amount of goodwill would exceed its recoverable amount, when compared to the risk adjusted cash flows, if:
The recoverable amount of the CGU has been assessed by reference to its value-in-use, which has been estimated using discounted cash flow forecasts and use of terminal values to perpetuity. The basis of these forecasts is the Board approved budget for the next year and management reviewed three-year plans, which have been extrapolated to a five-year view for the CGU, taking into consideration any expected inflationary pressures. Margins are broadly consistent with historic performance and revenues assumed take into account past experience and are reflective of a conservative view of the Group's core strategy;
Discount rates used reflect specialist, third party advice and are calculated taking into account geographies, size of businesses and industry risk factors;
Long-term growth rates used are 2% (2024: 2%) for all UK based CGUs and 2% (2024: 2%) for those operating in the US (being EPS only). These rates are based on long term target inflation rates.
Forecast compound annual revenue growth over the five-year period were to decline from a forecast of 5.7% to 3.2%, representing a movement in revenue from $19.1 million in 2025 to $27.5 million in 2030, assuming no mitigating actions were taken; and
There was a reduction in assumed direct gross margin from 34% to 32%.
FFEI impairment review
As part of a planned reorganisation resulting in the transfer of the Printbar segment of the FFEI CGU to Printhead, and the abandonment of the residual business (see Note 11) in the year, there is an indicator of impairment as at the reporting date. As it is no longer possible for management to identify and track the FFEI CGU in isolation, in line with IAS 36: Impairment of Assets, goodwill must be tested at the level of the CGU expected to benefit from the business combination.
The FFEI goodwill has consequently been allocated to the Printhead CGU following the reorganisation, which is in line with IAS 36, which now receives all economic benefits associated with the acquisition. A value-in-use assessment was performed for the Printhead CGU, which demonstrated significant headroom, comfortably exceeding the carrying amount of the CGU including the allocated Digital Imaging goodwill.
Xaar plc Annual Report and Financial Statements 2025
126
Notes to the consolidated financial statements continued
for the year ended 31 December 2025
15. Goodwill continued
Megnajet impairment review
During the year, the Group reviewed the strategic direction and future operating model for its ink supply activities. As part of this review, it became clear that the structure and future operation of the business will differ materially from the assumptions that supported the original goodwill. These changes mean that the CGU will not continue in its previous standalone form and that its future financial performance will no longer be separable for impairment testing purposes.
In accordance with IAS 36: Impairment of Assets, a pre-reorganisation impairment assessment was performed for the Megnajet CGU, at the date that the restructuring/reorganisation decision was made. Actual financial performance in 2025 exceeded the assumptions used in the prior impairment model, with stronger revenue, margins and cash generation. No indicators of impairment were identified prior to the commencement of the planned reorganisation, and no impairment was required at the standalone Megnajet CGU level.
Following the planned reorganisation, Megnajet activities, cash inflows and economic benefits will arise entirely within the Printhead CGU. The Megnajet goodwill has therefore been reallocated to the Printhead CGU for impairment testing going forward.
A value-in-use assessment of the Printhead CGU, inclusive of the reallocated Megnajet goodwill, demonstrated substantial headroom over the carrying value. Accordingly, no impairment has been recognised.
No reasonably possible change in assumptions would result in an impairment.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7397547": { "value": "15. Goodwill
31 December 2025
\u00a3\u2019000
31 December 2024
\u00a3\u2019000
Cost and carrying amount
Balance at 1 January
6,959
\u00a06,873
Exchange differences
(383)
\u00a086
Balance at 31 December
6,576
\u00a06,959
Allocated to Printhead CGU
1,350
\u00a0\u2013
Allocated to Product Print Systems (EPS) CGU
5,226
\u00a05,609
Allocated to Digital Imaging (FFEI) CGU
\u2013
\u00a0689
Allocated to Ink Supply Systems (Megnajet) CGU
\u2013
\u00a0661
Total
6,576
\u00a06,959
The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired. Having performed impairment testing, no impairment has been identified and therefore no impairment loss has been recognised during the current year.
Goodwill balances have been tested for impairment on the following basis:
The outcome of the impairment assessments conducted are dependent on estimates which have been subject to sensitivity analyses before a conclusion on impairment was made. It is management's view that the key assumptions are revenue growth, gross margin % and discount rate. Any reasonable possible change to these sensitivities that could result in an impairment charge have been disclosed below:
EPS impairment review
Using a discount rate of 14.3% (2024: 15.0%) the recoverable amount calculated exceeds the carrying value of the CGU by $8.3 million (2024: $11.8 million). The carrying amount of goodwill would exceed its recoverable amount, when compared to the risk adjusted cash flows, if:
The recoverable amount of the CGU has been assessed by reference to its value-in-use, which has been estimated using discounted cash flow forecasts and use of terminal values to perpetuity. The basis of these forecasts is the Board approved budget for the next year and management reviewed three-year plans, which have been extrapolated to a five-year view for the CGU, taking into consideration any expected inflationary pressures. Margins are broadly consistent with historic performance and revenues assumed take into account past experience and are reflective of a conservative view of the Group's core strategy;
Discount rates used reflect specialist, third party advice and are calculated taking into account geographies, size of businesses and industry risk factors;
Long-term growth rates used are 2% (2024: 2%) for all UK based CGUs and 2% (2024: 2%) for those operating in the US (being EPS only). These rates are based on long term target inflation rates.
Forecast compound annual revenue growth over the five-year period were to decline from a forecast of 5.7% to 3.2%, representing a movement in revenue from $19.1 million in 2025 to $27.5 million in 2030, assuming no mitigating actions were taken; and
There was a reduction in assumed direct gross margin from 34% to 32%.
FFEI impairment review
As part of a planned reorganisation resulting in the transfer of the Printbar segment of the FFEI CGU to Printhead, and the abandonment of the residual business (see Note 11) in the year, there is an indicator of impairment as at the reporting date. As it is no longer possible for management to identify and track the FFEI CGU in isolation, in line with IAS 36: Impairment of Assets, goodwill must be tested at the level of the CGU expected to benefit from the business combination.
The FFEI goodwill has consequently been allocated to the Printhead CGU following the reorganisation, which is in line with IAS 36, which now receives all economic benefits associated with the acquisition. A value-in-use assessment was performed for the Printhead CGU, which demonstrated significant headroom, comfortably exceeding the carrying amount of the CGU including the allocated Digital Imaging goodwill.
Xaar plc Annual Report and Financial Statements 2025
126
Notes to the consolidated financial statements continued
for the year ended 31 December 2025
15. Goodwill continued
Megnajet impairment review
During the year, the Group reviewed the strategic direction and future operating model for its ink supply activities. As part of this review, it became clear that the structure and future operation of the business will differ materially from the assumptions that supported the original goodwill. These changes mean that the CGU will not continue in its previous standalone form and that its future financial performance will no longer be separable for impairment testing purposes.
In accordance with IAS 36: Impairment of Assets, a pre-reorganisation impairment assessment was performed for the Megnajet CGU, at the date that the restructuring/reorganisation decision was made. Actual financial performance in 2025 exceeded the assumptions used in the prior impairment model, with stronger revenue, margins and cash generation. No indicators of impairment were identified prior to the commencement of the planned reorganisation, and no impairment was required at the standalone Megnajet CGU level.
Following the planned reorganisation, Megnajet activities, cash inflows and economic benefits will arise entirely within the Printhead CGU. The Megnajet goodwill has therefore been reallocated to the Printhead CGU for impairment testing going forward.
A value-in-use assessment of the Printhead CGU, inclusive of the reallocated Megnajet goodwill, demonstrated substantial headroom over the carrying value. Accordingly, no impairment has been recognised.
No reasonably possible change in assumptions would result in an impairment.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7397550": { "value": "16. Other intangible assets
Acquisition based
Technology based
\u00a3\u2019000
Brands
\u00a3\u2019000
Customer relationships
\u00a3\u2019000
Sub-total
\u00a3\u2019000
Development costs
\u00a3\u2019000
Licence
fees
\u00a3\u2019000
Software
\u00a3\u2019000
Total
\u00a3\u2019000
Cost
At 1 January 2024
4,620
281
1,626
6,527
41,098
1,632
3,508
52,765
Additions
\u2013
\u2013
\u2013
\u2013
86
\u2013
\u2013
86
At 31 December 2024
4,620
281
1,626
6,527
41,098
1,632
3,508
52,765
Additions
\u2013
\u2013
\u2013
\u2013
985
\u2013
13
998
Disposals
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(68)
(68)
Transfers
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
5
5
Exchange differences
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(7)
(7)
At 31 December 2025
4,620
281
1,626
6,527
42,083
1,632
3,451
53,693
Accumulated amortisation
At 1 January 2024
1,918
51
598
2,567
38,687
647
3,412
45,313
Charge in the year
1,417
28
253
1,699
\u2013
77
44
1,819
Impairment
\u2013
\u2013
502
502
\u2013
\u2013
\u2013
502
Exchange differences
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(5)
(5)
At 31 December 2024
3,335
79
1,353
4,767
38,687
724
3,451
47,629
Charge in the year
249
28
53
330
24
76
13
443
Disposals
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(54)
(54)
Exchange differences
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(2)
(2)
At 31 December 2025
3,584
107
1,406
5,097
38,711
800
3,408
48,016
At 31 December 2024
1,285
202
273
1,760
2,411
908
57
5,136
At 31 December 2025
1,036
174
220
1,430
3,372
832
43
5,677
Amortisation is recorded in selling, general and administrative expenses. The amortisation periods are in line with the accounting policy in Note 2.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7397549": { "value": "16. Other intangible assets
Acquisition based
Technology based
\u00a3\u2019000
Brands
\u00a3\u2019000
Customer relationships
\u00a3\u2019000
Sub-total
\u00a3\u2019000
Development costs
\u00a3\u2019000
Licence
fees
\u00a3\u2019000
Software
\u00a3\u2019000
Total
\u00a3\u2019000
Cost
At 1 January 2024
4,620
281
1,626
6,527
41,098
1,632
3,508
52,765
Additions
\u2013
\u2013
\u2013
\u2013
86
\u2013
\u2013
86
At 31 December 2024
4,620
281
1,626
6,527
41,098
1,632
3,508
52,765
Additions
\u2013
\u2013
\u2013
\u2013
985
\u2013
13
998
Disposals
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(68)
(68)
Transfers
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
5
5
Exchange differences
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(7)
(7)
At 31 December 2025
4,620
281
1,626
6,527
42,083
1,632
3,451
53,693
Accumulated amortisation
At 1 January 2024
1,918
51
598
2,567
38,687
647
3,412
45,313
Charge in the year
1,417
28
253
1,699
\u2013
77
44
1,819
Impairment
\u2013
\u2013
502
502
\u2013
\u2013
\u2013
502
Exchange differences
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(5)
(5)
At 31 December 2024
3,335
79
1,353
4,767
38,687
724
3,451
47,629
Charge in the year
249
28
53
330
24
76
13
443
Disposals
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(54)
(54)
Exchange differences
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(2)
(2)
At 31 December 2025
3,584
107
1,406
5,097
38,711
800
3,408
48,016
At 31 December 2024
1,285
202
273
1,760
2,411
908
57
5,136
At 31 December 2025
1,036
174
220
1,430
3,372
832
43
5,677
Amortisation is recorded in selling, general and administrative expenses. The amortisation periods are in line with the accounting policy in Note 2.
Financial Statements
Strategic Report
Governance
Xaar plc Annual Report and Financial Statements 2025
127
17. Property, plant and equipment
Land &
buildings
\u00a3\u2019000
Leasehold improvements
\u00a3\u2019000
Plant and machinery
\u00a3\u2019000
Furniture, fittings and equipment
\u00a3\u2019000
Total
\u00a3\u2019000
Cost
At 1 January 2024
2,055
14,202
66,838
5,226
88,321
Additions in the year
\u2013
112
801
24
937
Disposals in the year
\u2013
(7)
(493)
(742)
(1,242)
Exchange differences
29
\u2013
36
(7)
58
At 31 December 2024
2,084
14,307
67,182
4,501
88,074
Additions in the year
\u2013
127
1,789
45
1,961
Transfers in the year
\u2013
\u2013
932
\u2013
932
Disposals in the year
\u2013
\u2013
(906)
(13)
(919)
Exchange differences
(156)
(2)
(137)
(1)
(296)
At 31 December 2025
1,928
14,432
68,860
4,532
89,752
Accumulated depreciation and impairment
At 1 January 2024
561
10,193
58,762
4,276
73,792
Charge in the year
26
671
1,605
449
2,751
Impairment
\u2013
2
11
99
112
Disposals in the year
\u2013
(12)
(360)
(745)
(1,117)
Exchange differences
12
\u2013
179
(145)
46
At 31 December 2024
599
10,854
60,197
3,934
75,584
Charge in the year
25
684
1,602
160
2,471
Impairment
\u2013
\u2013
8
\u2013
8
Disposals in the year
\u2013
\u2013
(795)
(13)
(808)
Exchange differences
(46)
(1)
(99)
18
(127)
At 31 December 2025
578
11,537
60,913
4,099
77,128
At 31 December 2024
1,485
3,453
6,985
567
12,490
At 31 December 2025
1,350
2,895
7,947
433
12,625
Included within Plant and Machinery is \u00a32,028,000 (2024: \u00a3586,000) of assets under construction.
The transfer in 2025 was from FFEI Limited inventory to Xaar Jet Limited Plant and Machinery.
Capital commitments at 31 December 2025 amounted to \u00a3nil (2024: \u00a3nil).
17. Property, plant and equipment
Land &
buildings
\u00a3\u2019000
Leasehold improvements
\u00a3\u2019000
Plant and machinery
\u00a3\u2019000
Furniture, fittings and equipment
\u00a3\u2019000
Total
\u00a3\u2019000
Cost
At 1 January 2024
2,055
14,202
66,838
5,226
88,321
Additions in the year
\u2013
112
801
24
937
Disposals in the year
\u2013
(7)
(493)
(742)
(1,242)
Exchange differences
29
\u2013
36
(7)
58
At 31 December 2024
2,084
14,307
67,182
4,501
88,074
Additions in the year
\u2013
127
1,789
45
1,961
Transfers in the year
\u2013
\u2013
932
\u2013
932
Disposals in the year
\u2013
\u2013
(906)
(13)
(919)
Exchange differences
(156)
(2)
(137)
(1)
(296)
At 31 December 2025
1,928
14,432
68,860
4,532
89,752
Accumulated depreciation and impairment
At 1 January 2024
561
10,193
58,762
4,276
73,792
Charge in the year
26
671
1,605
449
2,751
Impairment
\u2013
2
11
99
112
Disposals in the year
\u2013
(12)
(360)
(745)
(1,117)
Exchange differences
12
\u2013
179
(145)
46
At 31 December 2024
599
10,854
60,197
3,934
75,584
Charge in the year
25
684
1,602
160
2,471
Impairment
\u2013
\u2013
8
\u2013
8
Disposals in the year
\u2013
\u2013
(795)
(13)
(808)
Exchange differences
(46)
(1)
(99)
18
(127)
At 31 December 2025
578
11,537
60,913
4,099
77,128
At 31 December 2024
1,485
3,453
6,985
567
12,490
At 31 December 2025
1,350
2,895
7,947
433
12,625
Included within Plant and Machinery is \u00a32,028,000 (2024: \u00a3586,000) of assets under construction.
The transfer in 2025 was from FFEI Limited inventory to Xaar Jet Limited Plant and Machinery.
Capital commitments at 31 December 2025 amounted to \u00a3nil (2024: \u00a3nil).
Xaar plc Annual Report and Financial Statements 2025
128
Notes to the consolidated financial statements continued
for the year ended 31 December 2025
18. Leases
The Group has lease contracts for various items of buildings, equipment and vehicles used in its operations. The Group\u2019s obligations under its leases are secured by the lessor\u2019s title to the leased assets.
Generally, the Group is restricted from assigning and subleasing the leased assets. The Group also has certain leases of machinery with lease terms of 12 months or less and leases of office equipment with low value. The Group applies the \u2018short-term lease\u2019 and \u2018lease of low-value assets\u2019 recognition exemptions for these leases.
Right-of-use assets
\u00a0Buildings
\u00a3\u2019000
Equipment
\u00a3\u2019000
Vehicles
\u00a3\u2019000
Total
\u00a3\u2019000
Cost
At 1 January 2024
13,470
125
24
13,619
Rental modification
(263)
\u2013
\u2013
(263)
Additions
283
\u2013
\u2013
283
Disposals
(2,611)
(71)
\u2013
(2,682)
Exchange differences
2
\u2013
\u2013
2
At 31 December 2024
10,881
54
24
10,959
Additions
246
26
30
302
Disposals
(75)
(21)
(24)
(120)
Exchange differences
(1)
\u2013
\u2013
(1)
At 31 December 2025
11,051
59
30
11,140
Depreciation
At 1 January 2024
5,687
94
12
5,793
Charge in the year
1,029
13
8
1,050
Impairment
272
\u2013
\u2013
272
Disposals
(818)
(71)
\u2013
(889)
Exchange differences
(1)
\u2013
\u2013
(1)
At 31 December 2024
6,169
36
20
6,225
Charge in the year
754
13
7
774
Disposals
(11)
(17)
(24)
(52)
Exchange differences
\u2013
\u2013
\u2013
\u2013
At 31 December 2025
6,912
32
3
6,947
At 31 December 2024
4,712
18
4
4,734
At 31 December 2025
4,139
27
27
4,193
Lease deposits
A refundable deposit of SEK 1,237,500 (\u00a3100,000) is held on the lease for office premises in Sweden. This deposit would be due for repayment on expiry of the lease, currently due to expire in 2026. This receivable is presented within non-current financial assets on the Consolidated Statement of Financial ", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396924": { "value": "Impairment
\u2013
2
11
99
112
Capital commitments at 31 December 2025 amounted to \u00a3nil (2024: \u00a3nil).
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396925": { "value": "18. Leases
The Group has lease contracts for various items of buildings, equipment and vehicles used in its operations. The Group\u2019s obligations under its leases are secured by the lessor\u2019s title to the leased assets.
Generally, the Group is restricted from assigning and subleasing the leased assets. The Group also has certain leases of machinery with lease terms of 12 months or less and leases of office equipment with low value. The Group applies the \u2018short-term lease\u2019 and \u2018lease of low-value assets\u2019 recognition exemptions for these leases.
Right-of-use assets
\u00a0Buildings
\u00a3\u2019000
Equipment
\u00a3\u2019000
Vehicles
\u00a3\u2019000
Total
\u00a3\u2019000
Cost
At 1 January 2024
13,470
125
24
13,619
Rental modification
(263)
\u2013
\u2013
(263)
Additions
283
\u2013
\u2013
283
Disposals
(2,611)
(71)
\u2013
(2,682)
Exchange differences
2
\u2013
\u2013
2
At 31 December 2024
10,881
54
24
10,959
Additions
246
26
30
302
Disposals
(75)
(21)
(24)
(120)
Exchange differences
(1)
\u2013
\u2013
(1)
At 31 December 2025
11,051
59
30
11,140
Depreciation
At 1 January 2024
5,687
94
12
5,793
Charge in the year
1,029
13
8
1,050
Impairment
272
\u2013
\u2013
272
Disposals
(818)
(71)
\u2013
(889)
Exchange differences
(1)
\u2013
\u2013
(1)
At 31 December 2024
6,169
36
20
6,225
Charge in the year
754
13
7
774
Disposals
(11)
(17)
(24)
(52)
Exchange differences
\u2013
\u2013
\u2013
\u2013
At 31 December 2025
6,912
32
3
6,947
At 31 December 2024
4,712
18
4
4,734
At 31 December 2025
4,139
27
27
4,193
Lease deposits
A refundable deposit of SEK 1,237,500 (\u00a3100,000) is held on the lease for office premises in Sweden. This deposit would be due for repayment on expiry of the lease, currently due to expire in 2026. This receivable is presented within non-current financial assets on the Consolidated Statement of Financial Position.
Lease liabilities
Lease liabilities are analysed as follows:
31 December 2025
\u00a3\u2019000
31 December 2024
\u00a3\u2019000
Current
701
1,218
Non-current
4,195
4,710
4,896
\u00a05,928
Financial Statements
Strategic Report
Governance
Xaar plc Annual Report and Financial Statements 2025
129
18. Leases continued
Lease liabilities continued
The movement in lease liabilities is shown below:
31 December 2025
\u00a3\u2019000
31 December 2024
\u00a3\u2019000
At 1 January
5,928
8,698
Additions
307
490
Disposals
(76)
(2,289)
Interest charge
318
244
Lease payments
(1,603)
(1,197)
Exchange differences
22
(18)
At 31 December
4,896
5,928
Maturity analysis of lease liabilities:
31 December 2025
\u00a3'000
31 December 2024
\u00a3'000
Amounts falling due within
Less than one year
1,034
1,442
Between one and five years
3,116
3,985
Later than five years
2,058
2,058
6,208
\u00a07,485
Amounts recognised in the Consolidated Income Statement:
\u00a0
31 December 2025
\u00a3'000
31 December 2024
\u00a3'000
Depreciation
774
\u00a01,050
Interest charge
318
244
Short-term lease expenses
13
38
1,105
\u00a01,332
19. Deferred tax assets
Accelerated capital allowances
\u00a3'000
Share-based payments
\u00a3'000
Acquired intangible assets
\u00a3'000
Losses
\u00a3'000
Other temporary differences
\u00a3'000
Total
\u00a3'000
At 1 January 2024 reported
(527)
\u2013
(606)
1,139
574
580
Restatement*
\u2013
\u2013
\u2013
\u2013
554
554
At 1 January 2024 restated*
(527)
\u2013
(606)
1,139
1,128
1,134
(Charge) / credit to income statement restated
(25)
\u2013
488
(404)
335
394
Foreign exchange movement on translation
\u2013
\u2013
\u2013
\u2013
20
20
At 31 December 2024 restated
(552)
\u2013
(118)
735
1,483
1,548
(Charge) / credit to income statement
(692)
(38)
20
1,087
(82)
295
Foreign exchange movement on opening balance
9
1
\u2013
(25)
(94)
(109)
At 31 December 2025
(1,235)
(37)
(98)
1,797
1,307
1,734
* Refer to Note 31 for prior year restatement details.
Unrecognised deferred tax assets
The Group has unrecognised deferred tax assets totalling \u00a329,572,000 (2024: \u00a329,546,000). These consist of the following:
Xaar plc Annual Report and Financial Statements 2025
130
Notes to the consolidated financial statements continued
for the year ended 31 December 2025
19. Deferred tax assets continued
Trading losses
Deferred tax assets are recognised for tax loss carry forwards to the extent that the realisation of the related tax benefit through future taxable profits is probable.
As at 31 December 2025, the Group had unused UK trading losses of \u00a3117,801,000 (2024: \u00a3113,917,000) available to offset against future UK taxable profits of the same trade. These losses may be carried forward indefinitely.
Whilst the Board believes in the long-term potential and profitability of the Printhead business unit, forecast taxable losses over the immediately foreseeable period mean that the UK trading losses will not be utilised in the short term. The impact of climate change has been considered in the forecast and valuation of future taxable profits and no impacts were noted. Therefore, no deferred tax asset has been recognised in respect of these.
As at 31 December 2025, the Group has an unrecognised deferred tax asset in respect of carried forward UK trading losses of \u00a328,399,000 (2024: \u00a328,078,000).
Capital losses
As at 31 December 2025, the Group has unused capital losses of \u00a31,285,000 (2024: \u00a31,131,000) available for offset against future chargeable gains. No deferred tax asset has been recognised in respect of these capital losses as it is not considered probable that there will be future chargeable gains available. As a result, the Group has an unrecognised deferred tax asset in respect of carried forward UK capital losses of \u00a3321,000 (2024: \u00a3283,000).
These losses may be carried forward indefinitely.
Other temporary differences
As at 31 December 2025, the Group has \u00a31,173,000 (2024: \u00a31,185,000) of unrecognised deferred tax assets relating to other temporary differences. Within this balance, \u00a3603,000 relates to decelerated capital allowances (2024: \u00a3731,000), \u00a3532,882 relates to unexercised share options (2024: \u00a383,000) and \u00a337,000 relates to other trading items (2024: \u00a3371,000). Deferred tax assets arising in these areas have only been recognised to the extent that they offset deferred tax liabilities held by the Group.
Unremitted earnings and withholding tax
No deferred tax liability has been recognised in respect of potential withholding taxes on the distribution of profits from subsidiaries, as the Group does not expect these profits to be distributed in the foreseeable future.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396927": { "value": "20. Inventories
31 December 2025
\u00a3'000
31 December 2024
\u00a3'000
Raw materials
9,746
\u00a08,054
Work in progress
5,828
\u00a05,436
Finished goods
10,985
\u00a013,746
26,559
\u00a027,236
Cost of inventories recognised as an expense and write down of inventories recognised as an expense (and which are included as part of Cost of Sales) are set out in Note 7.
Gross inventory costs are \u00a331,462,000 (2024: \u00a333,020,000) partially offset by provisions of \u00a34,903,000 (2024: \u00a35,784,000).
There is no specific impact on the valuation of the Group\u2019s inventories arising from climate related matters. Estimates are based upon the most reliable evidence available at the time the estimates are made.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInventoriesExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396905": { "value": "21. Trade and other receivables
31 December 2025
\u00a3'000
31 December 2024
\u00a3'000
Amounts receivable for the sale of goods and services
7,535
6,089
Less: provision for bad and doubtful debts
(273)
(188)
7,262
5,901
Other receivables
732
698
Prepayments
1,326
1,485
9,320
8,084
Financial Statements
Strategic Report
Governance
Xaar plc Annual Report and Financial Statements 2025
131
21. Trade and other receivables continued
Ageing of trade receivables
31 December 2025
31 December 2024
Gross
\u00a3'000
Provision
\u00a3'000
Net
\u00a3'000
Gross
\u00a3'000
Provision
\u00a3'000
Net
\u00a3'000
Not past due
3,953
(10)
3,943
4,746
(5)
4,741
Past due
0 to 30 days
1,276
(9)
1,267
409
(5)
404
30 to 60 days
889
(6)
883
294
(7)
285
60 to 90 days
497
(17)
480
51
(6)
45
More than 90 days
920
(231)
689
589
(165)
424
3,582
(263)
3,319
1,343
(183)
1,160
Total receivables
7,535
(273)
7,262
6,089
(188)
5,901
Movement in provision for bad and doubtful debts
31 December 2025
\u00a3'000
31 December 2024
\u00a3'000
Balance at beginning of year
(188)
(115)
Impairment losses recognised in the income statement
(176)
(73)
Amounts written off
89
1
Exchange differences
2
(1)
(273)
(188)
The average credit period taken on sales of goods is 44 days (2024: 35 days). No interest is charged on the receivables for the period agreed in the Requirements Contract or, if not specified or applicable, the first 30 days from the date of the invoice. Thereafter, the Group reserves the right to charge interest at a daily rate from 1.5% to the greater of 4.0% per annum above the base rate of the Bank of England from time to time, or the maximum rate of interest allowable under the Late Payment of Commercial Debts (Interest) Act 1998, on all sums outstanding until payment in full is received. Trade receivables over 120 days are provided for based on estimated irrecoverable amounts from the sale of goods, determined by reference to past default experience. The maximum exposure to credit risk is the carrying amount of the financial assets as disclosed in the liquidity section of note 28. Before accepting any new customer, the Group uses an external credit scoring system to assess the potential customer\u2019s credit quality and defines credit limits by customer. Credit limits are reviewed at least once per year. Of the trade receivables balance at the end of the year, one (2024: six) customer represented greater than 5% (2024: 5%) of the total receivables balance, totalling \u00a31,495,000 (2024: \u00a32,236,000). The total due from these customers represents 2% (2024: 4%) of the Group\u2019s revenue.
The Group has recognised a loss allowance of 1% for receivables aged 60 days or less, 5% for receivables aged between 61 and 90 days and 15% for 91 and 120 days. A loss allowance of 25% is applied for receivables aged over 120 days. The loss allowance calculation excludes receivables with a specific provision as well as those debtors which are fully insured. Most of the debt over 120 days has been provided in full and relates to a small number of customers where none of the debt is expected to be recovered through normal trading. A provision is made against trade receivables until such time as the Group believes the amount to be irrecoverable (such as the bankruptcy of a customer or emerging market risks, which would render the receivable irrecoverable), after which the trade receivable balance is written off.
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
", "dimensions": { "concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396904": { "value": "21. Trade and other receivables
31 December 2025
\u00a3'000
31 December 2024
\u00a3'000
Amounts receivable for the sale of goods and services
7,535
6,089
Less: provision for bad and doubtful debts
(273)
(188)
7,262
5,901
Other receivables
732
698
Prepayments
1,326
1,485
9,320
8,084
Financial Statements
Strategic Report
Governance
Xaar plc Annual Report and Financial Statements 2025
131
21. Trade and other receivables continued
Ageing of trade receivables
31 December 2025
31 December 2024
Gross
\u00a3'000
Provision
\u00a3'000
Net
\u00a3'000
Gross
\u00a3'000
Provision
\u00a3'000
Net
\u00a3'000
Not past due
3,953
(10)
3,943
4,746
(5)
4,741
Past due
0 to 30 days
1,276
(9)
1,267
409
(5)
404
30 to 60 days
889
(6)
883
294
(7)
285
60 to 90 days
497
(17)
480
51
(6)
45
More than 90 days
920
(231)
689
589
(165)
424
3,582
(263)
3,319
1,343
(183)
1,160
Total receivables
7,535
(273)
7,262
6,089
(188)
5,901
Movement in provision for bad and doubtful debts
31 December 2025
\u00a3'000
31 December 2024
\u00a3'000
Balance at beginning of year
(188)
(115)
Impairment losses recognised in the income statement
(176)
(73)
Amounts written off
89
1
Exchange differences
2
(1)
(273)
(188)
The average credit period taken on sales of goods is 44 days (2024: 35 days). No interest is charged on the receivables for the period agreed in the Requirements Contract or, if not specified or applicable, the first 30 days from the date of the invoice. Thereafter, the Group reserves the right to charge interest at a daily rate from 1.5% to the greater of 4.0% per annum above the base rate of the Bank of England from time to time, or the maximum rate of interest allowable under the Late Payment of Commercial Debts (Interest) Act 1998, on all sums outstanding until payment in full is received. Trade receivables over 120 days are provided for based on estimated irrecoverable amounts from the sale of goods, determined by reference to past default experience. The maximum exposure to credit risk is the carrying amount of the financial assets as disclosed in the liquidity section of note 28. Before accepting any new customer, the Group uses an external credit scoring system to assess the potential customer\u2019s credit quality and defines credit limits by customer. Credit limits are reviewed at least once per year. Of the trade receivables balance at the end of the year, one (2024: six) customer represented greater than 5% (2024: 5%) of the total receivables balance, totalling \u00a31,495,000 (2024: \u00a32,236,000). The total due from these customers represents 2% (2024: 4%) of the Group\u2019s revenue.
The Group has recognised a loss allowance of 1% for receivables aged 60 days or less, 5% for receivables aged between 61 and 90 days and 15% for 91 and 120 days. A loss allowance of 25% is applied for receivables aged over 120 days. The loss allowance calculation excludes receivables with a specific provision as well as those debtors which are fully insured. Most of the debt over 120 days has been provided in full and relates to a small number of customers where none of the debt is expected to be recovered through normal trading. A provision is made against trade receivables until such time as the Group believes the amount to be irrecoverable (such as the bankruptcy of a customer or emerging market risks, which would render the receivable irrecoverable), after which the trade receivable balance is written off.
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396859": { "value": "21. Trade and other receivables
31 December 2025
\u00a3'000
31 December 2024
\u00a3'000
Amounts receivable for the sale of goods and services
7,535
6,089
Less: provision for bad and doubtful debts
(273)
(188)
7,262
5,901
Other receivables
732
698
Prepayments
1,326
1,485
9,320
8,084
Financial Statements
Strategic Report
Governance
Xaar plc Annual Report and Financial Statements 2025
131
21. Trade and other receivables continued
Ageing of trade receivables
31 December 2025
31 December 2024
Gross
\u00a3'000
Provision
\u00a3'000
Net
\u00a3'000
Gross
\u00a3'000
Provision
\u00a3'000
Net
\u00a3'000
Not past due
3,953
(10)
3,943
4,746
(5)
4,741
Past due
0 to 30 days
1,276
(9)
1,267
409
(5)
404
30 to 60 days
889
(6)
883
294
(7)
285
60 to 90 days
497
(17)
480
51
(6)
45
More than 90 days
920
(231)
689
589
(165)
424
3,582
(263)
3,319
1,343
(183)
1,160
Total receivables
7,535
(273)
7,262
6,089
(188)
5,901
Movement in provision for bad and doubtful debts
31 December 2025
\u00a3'000
31 December 2024
\u00a3'000
Balance at beginning of year
(188)
(115)
Impairment losses recognised in the income statement
(176)
(73)
Amounts written off
89
1
Exchange differences
2
(1)
(273)
(188)
The average credit period taken on sales of goods is 44 days (2024: 35 days). No interest is charged on the receivables for the period agreed in the Requirements Contract or, if not specified or applicable, the first 30 days from the date of the invoice. Thereafter, the Group reserves the right to charge interest at a daily rate from 1.5% to the greater of 4.0% per annum above the base rate of the Bank of England from time to time, or the maximum rate of interest allowable under the Late Payment of Commercial Debts (Interest) Act 1998, on all sums outstanding until payment in full is received. Trade receivables over 120 days are provided for based on estimated irrecoverable amounts from the sale of goods, determined by reference to past default experience. The maximum exposure to credit risk is the carrying amount of the financial assets as disclosed in the liquidity section of note 28. Before accepting any new customer, the Group uses an external credit scoring system to assess the potential customer\u2019s credit quality and defines credit limits by customer. Credit limits are reviewed at least once per year. Of the trade receivables balance at the end of the year, one (2024: six) customer represented greater than 5% (2024: 5%) of the total receivables balance, totalling \u00a31,495,000 (2024: \u00a32,236,000). The total due from these customers represents 2% (2024: 4%) of the Group\u2019s revenue.
The Group has recognised a loss allowance of 1% for receivables aged 60 days or less, 5% for receivables aged between 61 and 90 days and 15% for 91 and 120 days. A loss allowance of 25% is applied for receivables aged over 120 days. The loss allowance calculation excludes receivables with a specific provision as well as those debtors which are fully insured. Most of the debt over 120 days has been provided in full and relates to a small number of customers where none of the debt is expected to be recovered through normal trading. A provision is made against trade receivables until such time as the Group believes the amount to be irrecoverable (such as the bankruptcy of a customer or emerging market risks, which would render the receivable irrecoverable), after which the trade receivable balance is written off.
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396860": { "value": "Trade and other receivables continuedAgeing of trade receivables
31 December 2025
31 December 2024
Gross
\u00a3'000
Provision
\u00a3'000
Net
\u00a3'000
Gross
\u00a3'000
Provision
\u00a3'000
Net
\u00a3'000
Not past due
3,953
(10)
3,943
4,746
(5)
4,741
Past due
0 to 30 days
1,276
(9)
1,267
409
(5)
404
30 to 60 days
889
(6)
883
294
(7)
285
60 to 90 days
497
(17)
480
51
(6)
45
More than 90 days
920
(231)
689
589
(165)
424
3,582
(263)
3,319
1,343
(183)
1,160
Total receivables
7,535
(273)
7,262
6,089
(188)
5,901
Movement in provision for bad and doubtful debts
31 December 2025
\u00a3'000
31 December 2024
\u00a3'000
Balance at beginning of year
(188)
(115)
Impairment losses recognised in the income statement
(176)
(73)
Amounts written off
89
1
Exchange differences
2
(1)
(273)
(188)
The average credit period taken on sales of goods is 44 days (2024: 35 days). No interest is charged on the receivables for the period agreed in the Requirements Contract or, if not specified or applicable, the first 30 days from the date of the invoice. Thereafter, the Group reserves the right to charge interest at a daily rate from 1.5% to the greater of 4.0% per annum above the base rate of the Bank of England from time to time, or the maximum rate of interest allowable under the Late Payment of Commercial Debts (Interest) Act 1998, on all sums outstanding until payment in full is received. Trade receivables over 120 days are provided for based on estimated irrecoverable amounts from the sale of goods, determined by reference to past default experience. The maximum exposure to credit risk is the carrying amount of the financial assets as disclosed in the liquidity section of note 28. Before accepting any new customer, the Group uses an external credit scoring system to assess the potential customer\u2019s credit quality and defines credit limits by customer. Credit limits are reviewed at least once per year. Of the trade receivables balance at the end of the year, one (2024: six) customer represented greater than 5% (2024: 5%) of the total receivables balance, totalling \u00a31,495,000 (2024: \u00a32,236,000). The total due from these customers represents 2% (2024: 4%) of the Group\u2019s revenue.
The Group has recognised a loss allowance of 1% for receivables aged 60 days or less, 5% for receivables aged between 61 and 90 days and 15% for 91 and 120 days. A loss allowance of 25% is applied for receivables aged over 120 days. The loss allowance calculation excludes receivables with a specific provision as well as those debtors which are fully insured. Most of the debt over 120 days has been provided in full and relates to a small number of customers where none of the debt is expected to be recovered through normal trading. A provision is made against trade receivables until such time as the Group believes the amount to be irrecoverable (such as the bankruptcy of a customer or emerging market risks, which would render the receivable irrecoverable), after which the trade receivable balance is written off.
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396914": { "value": "22. Contract assets and contract liabilities
31 December 2025
\u00a3'000
31 December 2024
\u00a3'000
Contract assets
\u2013 Accrued income
514
1,018
Total current contract assets
514
1,018
Contract assets consist of a small number of contracts relating to the design and production of bespoke machinery or research and development services. Since there is regular contact with all such customers for project management purposes, with robust milestone payments, there is no generic risk in relation to the recoverability of contract assets. The only time when an expected credit loss provision would be recognised is where the Group became aware of a customer being at risk of bankruptcy. The Directors are not aware of any such cases at 31 December 2025 (31 December 2024: none), therefore, no such provision is in place.
Xaar plc Annual Report and Financial Statements 2025
132
Notes to the consolidated financial statements continued
for the year ended 31 December 2025
22. Contract assets and contract liabilities continued
31 December 2025
\u00a3'000
31 December 2024
\u00a3'000
Contract liabilities
\u2013 Deferred income
(229)
(241)
\u2013 Customer deposits
(1,304)
(1,745)
Total current contract liabilities
(1,533)
(1,986)
Both deferred income and customer deposits represent consideration received for performance obligations not yet satisfied under contracts to deliver products or services to customers. All deferred income and customer deposits are anticipated to be recognised in revenue within the next financial year.
Of the \u00a31,986,000 recognised as contract liabilities as at 31 December 2024, \u00a31,982,000 was recognised in revenue during the year ended 31 December 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396948": { "value": "22. Contract assets and contract liabilities continued
31 December 2025
\u00a3'000
31 December 2024
\u00a3'000
Contract liabilities
\u2013 Deferred income
(229)
(241)
\u2013 Customer deposits
(1,304)
(1,745)
Total current contract liabilities
(1,533)
(1,986)
Both deferred income and customer deposits represent consideration received for performance obligations not yet satisfied under contracts to deliver products or services to customers. All deferred income and customer deposits are anticipated to be recognised in revenue within the next financial year.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepositsFromCustomersExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396928": { "value": "23. Trade and other payables
31 December 2025
\u00a3'000
31 December 2024
\u00a3'000
Amounts falling due within one year
Trade payables
(3,924)
(2,787)
Accruals and other payables
(7,234)
(5,995)
(11,158)
(8,782)
At 31\u00a0December 2025, the Group had an average of 34 days of purchases (31\u00a0December 2024: 23 days) outstanding in trade payables and accruals.The Group has financial risk management policies in place to ensure that all payables are paid within the credit timetable.
The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396930": { "value": "23. Trade and other payables
31 December 2025
\u00a3'000
31 December 2024
\u00a3'000
Amounts falling due within one year
Trade payables
(3,924)
(2,787)
Accruals and other payables
(7,234)
(5,995)
(11,158)
(8,782)
At 31\u00a0December 2025, the Group had an average of 34 days of purchases (31\u00a0December 2024: 23 days) outstanding in trade payables and accruals.The Group has financial risk management policies in place to ensure that all payables are paid within the credit timetable.
The Directors consider that the carrying amount of trade and other payables approximates to their fair value", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396929": { "value": "23. Trade and other payables
31 December 2025
\u00a3'000
31 December 2024
\u00a3'000
Amounts falling due within one year
Trade payables
(3,924)
(2,787)
Accruals and other payables
(7,234)
(5,995)
(11,158)
(8,782)
At 31\u00a0December 2025, the Group had an average of 34 days of purchases (31\u00a0December 2024: 23 days) outstanding in trade payables and accruals.The Group has financial risk management policies in place to ensure that all payables are paid within the credit timetable.
The Directors consider that the carrying amount of trade and other payables approximates to their fair value", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396954": { "value": "24. Provisions
31 December 2025
\u00a3'000
31 December 2024 restated*\u00a3'000
Current
Tax provision (i)
(2,713)
(2,843)
Legal provision (ii)
(315)
(613)
Warranty provisions (iii)
(180)
(338)
Restructuring provisions (iv)
(447)
\u2013
(3,655)
(3,794)
Non-current
Dilapidations (v)
(250)
(300)
(250)
(300)
Movement in provisions during the year
Tax provision
\u00a3'000
Legal provision \u00a3'000
Warranty provision
\u00a3'000
Restructuring provision
\u00a3'000
Dilapidations
\u00a3'000
Total
\u00a3'000
At 1 January 2024 (restated*)
(2,637)
(413)
(476)
(496)
(300)
(4,322)
Provided for during the year
(164)
(200)
(41)
\u2013
\u2013
(405)
Provisions utilised
\u2013
\u2013
\u00a0135
\u00a0492
\u2013
\u00a0627
Provision released
\u2013
\u2013
44
4
\u2013
48
Foreign exchange differences
(42)
\u2013
\u2013
\u2013
\u2013
(42)
At 31 December 2024
(2,843)
(613)
(338)
\u2013
(300)
(4,094)
Provided for during the year
(65)
(19)
(215)
(447)
\u2013
(746)
Provisions utilised
\u2013
295
167
\u2013
50
512
Provisions released
\u2013
\u2013
203
\u2013
\u2013
203
Foreign exchange differences
195
22
3
\u2013
\u2013
220
At 31 December 2025
(2,713)
(315)
(180)
(447)
(250)
(3,905)
(i)
(ii)
(iii)
(iv)
(v)
* Refer to Note 31\u00a0for prior year restatement details.
Financial Statements
Strategic Report
Governance
Xaar plc Annual Report and Financial Statements 2025
133
24. Provisions continued
During 2025, the Directors identified certain primarily indirect tax liabilities to settle in an overseas jurisdiction. Following a detailed review with the support of external advisors, we have assessed the present obligation associated with this matter to be approximately \u00a32,714,000 including interest and excluding penalties. The provision comprised of the tax liability calculated and imputed interest. Potential penalties in respect of this matter have been disclosed as a contingent liability in note 32, in line with the requirements of IAS 37.
Historical breach of regulations within one of our operations dating back to 2021. This was provided for in the 2024 annual report and repayments made in August 2025. The remaining provision is for potential damages.
The warranty and commercial agreements provision represents management\u2019s best estimate of the Group\u2019s liability related to claims against product warranties or commercial sales agreements. The timing of the utilisation of this provision is uncertain.
Restructuring provisions in both the current and prior years consist of redundancy costs arising in the context of the Group\u2019s streamlining of operations.The 2025 provision is to be settled in 2026.
The Group operates from a number of leasehold premises under full repairing leases. The dilapidation provision recognised reflects the estimated costs of repairs that would be required to put these premises back into the state of repair required under these leases.
", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396908": { "value": "25. Borrowings
31 December 2025
\u00a3'000
31 December 2024
\u00a3'000
Amounts failing due within one year
Invoice discounting facility
(475)
(557)
Invoice discounting facility
The facility limit is \u00a33 million (2024: \u00a33 million) and operates on a rolling basis from the original inception date of September 2022. The facility can be cancelled with a three-month notice period. There are no covenants attached to the invoice discounting facility.
Interest on the invoice discounting facility is charged daily when the facility is in an overdrawn position at a rate equivalent to the appropriate base rate +1.75% pa. There is an annual service fee of \u00a325,000 charged monthly, and there was a one-off arrangement fee to open the facility of \u00a310,000. No interest is payable on the unutilised element on the facility.
Eligible debts in GBP and USD denominations are legally assigned to the facility provider as, or soon after, they are raised. The facility makes available 90% of the debts to XaarJet Limited, subject to certain monetary funding limits and concentration percentages by customer. XaarJet Limited remain responsible for collecting the debts as the collection agent for the finance provider and the remittances are made into an account held for the benefit of the finance provider, the balance of which is held as a liability in XaarJet Limited.
No fair value adjustments are deemed necessary for these amounts; however, the receivables are subject to an allowance for doubtful debt. The invoice discounting facility is secured with fixed rate charges over purchased debts and a floating charge over the assets of XaarJet Limited.
It remains the Group\u2019s responsibility to appropriately insure, manage and recover the debts assigned under the arrangement, and the transferred assets are subject to recourse at any time. As a result, the Group retains substantially all the risks/rewards of ownership and control of these assets. Therefore, the Group continues to recognise the gross debts assigned under the facility as trade receivables.
Committed facilities
On 19 March 2026, Xaar Plc successfully extended a Revolving Credit Facility (RCF) agreement from \u00a35 million to \u00a310 million, maturing in June 2029, having been extended for an additional three years. The agreement includes an accordion option of a further \u00a35 million which can be requested at any time during the facility term, subject to lender approval and relevant fees. The facility as at 31 December 2025 remained undrawn (2024: undrawn).
The previous \u00a35 million facility beared a floating interest rate of the Sterling Overnight Indexed Average (SONIA) rate plus 2.35% margin. The revised facility bears interest at a floating rate of SONIA plus a margin of 2.25-3.00% depending on leverage ratios. A non-utilisation fee of 40% of the margin is chargeable on undrawn and uncancelled amounts.
The facility is secured by fixed and floating charges over the assets of the Group.
The Group is subject to financial covenants under the facility and has complied with these at all testing points.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396941": { "value": "26. Share capital and reserves
Share capital
31 December 2025
31 December 2024
\u00a3'000
Number
\u00a3'000
Number
Authorised, issued and fully paid:
At as 1 January
7,948
79,479,189
\u00a07,923
\u00a079,230,005
Shares issued during the year (ordinary shares of 10.0p each)
34
337,706
\u00a025
\u00a0249,184
As at 31 December
7,982
79,816,895
\u00a07,948
\u00a079,479,189
The Company has one class of ordinary shares which carries no right to fixed income.
Retained earnings
Comprises all net gains and losses as well as transactions with owners, such as dividend payments, that are not recognised elsewhere. Amounts are distributable by way of dividends.
The share-based payments reserve, which represents the cumulative charges recognised in relation to equity-settled share option awards, are presented in retained earnings.
Merger reserve
Comprises the premium on shares issued as consideration for Xaar Technology Limited where conditions for merger relief have been satisfied. This is not distributable by way of dividends. These are presented as part of other reserves in the Statement of Changes in Equity.
Non-distributable reserve
Comprises the non-distributable portion of the dividend received by Xaar Plc from Xaar Digital Limited. These are presented as part of other reserves in the Statement of Changes in Equity.
Own shares reserve
Represents shares in the Company held by Xaar Trustee Limited and Xaar Plc ESOP Trust. These shares are held in order to satisfy options granted under the Group's share option schemes.
31 December 2025
31 December 2024
Nominal
value
\u00a3'000
Number
Nominal
value
\u00a3'000
Number
Own shares
1,125
926,536
566
\u00a0313,201
Of the nominal value \u00a320,000 (2024: \u00a320,000) represents 91,250 ordinary shares held in trust by Xaar Trustee Limited. The remaining value \u00a31,104,447 (2024: \u00a3545,733) represents 835,286 (2024: 221,951) shares in the Company purchased in the market at market value and held by the Xaar plc ESOP Trust.
During the year the ESOP Trust sold 143,127 (2024: nil) shares to satisfy options exercised and purchased 756,462 (2024: nil) shares.
Translation reserve
Represents exchange differences on translation of overseas operations", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396909": { "value": "Share capital
31 December 2025
31 December 2024
\u00a3'000
Number
\u00a3'000
Number
Authorised, issued and fully paid:
At as 1 January
7,948
79,479,189
\u00a07,923
\u00a079,230,005
Shares issued during the year (ordinary shares of 10.0p each)
34
337,706
\u00a025
\u00a0249,184
As at 31 December
7,982
79,816,895
\u00a07,948
\u00a079,479,189
The Company has one class of ordinary shares which carries no right to fixed income.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396910": { "value": "Retained earnings
Comprises all net gains and losses as well as transactions with owners, such as dividend payments, that are not recognised elsewhere. Amounts are distributable by way of dividends.
The share-based payments reserve, which represents the cumulative charges recognised in relation to equity-settled share option awards, are presented in retained earnings.
Merger reserve
Comprises the premium on shares issued as consideration for Xaar Technology Limited where conditions for merger relief have been satisfied. This is not distributable by way of dividends. These are presented as part of other reserves in the Statement of Changes in Equity.
Non-distributable reserve
Comprises the non-distributable portion of the dividend received by Xaar Plc from Xaar Digital Limited. These are presented as part of other reserves in the Statement of Changes in Equity.
Own shares reserve
Represents shares in the Company held by Xaar Trustee Limited and Xaar Plc ESOP Trust. These shares are held in order to satisfy options granted under the Group's share option schemes.
31 December 2025
31 December 2024
Nominal
value
\u00a3'000
Number
Nominal
value
\u00a3'000
Number
Own shares
1,125
926,536
566
\u00a0313,201
Of the nominal value \u00a320,000 (2024: \u00a320,000) represents 91,250 ordinary shares held in trust by Xaar Trustee Limited. The remaining value \u00a31,104,447 (2024: \u00a3545,733) represents 835,286 (2024: 221,951) shares in the Company purchased in the market at market value and held by the Xaar plc ESOP Trust.
During the year the ESOP Trust sold 143,127 (2024: nil) shares to satisfy options exercised and purchased 756,462 (2024: nil) shares.
Translation reserve
Represents exchange differences on translation of overseas operations.
", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396868": { "value": "27. Notes to the cash flow statement
* Refer to Note 11 for discontinued operations restatement details and Note 31\u00a0for prior year restatement details.
Notes
31 December 2025
\u00a3'000
31 December 2024 restated*
\u00a3'000
Loss before tax from continuing operations
(3,261)
(9,372)
Loss before tax from discontinued operations
(358)
(2,216)
Total loss before taxation:
(3,619)
(11,588)
Adjustments for:
Depreciation and impairment of property, plant and equipment
2,479
\u00a02,863
Depreciation and impairment of right-of-use assets
774
\u00a01,322
Amortisation and impairment of intangible assets
443
\u00a02,321
Research and development expenditure credit
(549)
(228)
Net interest expense
331
\u00a0361
Unrealised currency translation losses / (gains)
389
(173)
Share-based payment charge
855
\u00a01,096
Fair value loss on financial assets at FVTPL
177
\u00a05,561
Loss on disposal of property, plant and equipment
111
\u00a0126
Gain on disposal of intangible assets
14
\u2013
Impairment of property, plant and equipment
(8)
\u2013
(Decrease) in provisions
(189)
(228)
Operating cash flows before movements in working capital
1,208
\u00a01,433
(Increase) / decrease in inventories
(467)
\u00a03,846
(Increase) / decrease in receivables
(1,079)
\u00a01,886
Increase / (decrease) in payables
2,142
(1,172)
Cash generated by operations
1,804
\u00a05,993
Exceptional cash outflows included above
2,654
803
Adjusted cash generated by operations
4,458
6,796
Analysis of changes in net debt
Cash and cash equivalents
\u00a3'000
Lease
liabilities*
\u00a3'000
Borrowings*
\u00a3'000
Deferred
consideration*
\u00a3'000
Net
cash/(debt)
\u00a3'000
Net debt as at 1 January 2024
7,135
(8,698)
(1,403)
(2,115)
(5,081)
Additions to leases
\u2013
(490)
\u2013
\u2013
(490)
Disposals
\u2013
\u00a02,289
\u2013
\u2013
\u00a02,289
Cash flow
\u00a01,539
\u00a01,197
\u00a0941
\u00a02,133
\u00a05,810
Finance charges
\u2013
(244)
\u2013
\u2013
(244)
Foreign exchange gain / (loss)
\u00a037
18
(95)
(18)
(58)
Net debt as at 31 December 2024
\u00a08,711
(5,928)
(557)
\u2013
\u00a02,226
Additions to leases
\u2013
(307)
\u2013
\u2013
(307)
Disposals
\u2013
76
\u2013
\u2013
76
Cash flow
(3,528)
1,603
82
\u2013
(1,843)
Finance charges
\u2013
(318)
\u2013
\u2013
(318)
Foreign exchange gain / (loss)
167
(22)
\u2013
\u2013
145
Net debt as at 31 December 2025
5,350
(4,896)
(475)
\u2013
(21)
Total financial liabilities included within net debt comprise of those items marked * and amount to \u00a35,371,000 (2024: \u00a36,485,000).
Liabilities arising from financing activities comprise the Group's RCF and invoice discounting facility (as set out in Note 25) and lease liabilities (as set out in Note 18).
28. Financial instruments
Carrying and fair value
31 December 2025
\u00a3\u2019000
31 December 2024
\u00a3\u2019000
Financial instruments held at amortised cost
Trade and other receivables
9,320
6,598
Contract assets
514
1,018
Cash and cash equivalents
5,349
8,711
Non-current financial assets
100
104
Trade and other payables
(11,158)
(8,782)
Borrowings and invoice discounting
(475)
(557)
Lease liabilities
(4,896)
(5,928)
Financial instruments held at fair value
Financial asset at FVTPL
4,534
4,918
The Directors consider there to be no material difference between the carrying value and the fair value of the financial instruments classified as held at amortised cost. For the items classified as held at fair value, the fair value is recognised in the Consolidated Statement of Financial Position as the carrying amount.
Financial instruments held at fair value
The Group has one financial instrument held at fair value through profit/loss (FVTPL), the contingent consideration that arose on the Group\u2019s divestment of its remaining interest in Xaar 3D Limited during the year ended 31 December 2021.
In 2021, Xaar 3D Holdings Limited completed the divestment of its remaining interest in the share capital of Xaar 3D Limited. The Group received net cash consideration of \u00a39,272,000 as well as a potential entitlement to additional cash consideration of up to \u00a310,863,000 calculated on an earn-out basis at 3% of revenue per annum, with additional amounts becoming receivable on meeting revenue milestones.
Financial instruments that are measured at fair value are classified using a fair value hierarchy that reflects the source of inputs used in deriving the fair value. The three classification levels are:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3: from valuation techniques that include inputs for the asset or liability that are not based on observable market data (i.e. unobservable market inputs).
The financial asset at FVTPL is deemed to be a Level 3 instrument. Fair value is determined using a Monte Carlo Simulation with significant unobservable inputs being the 20% (2024: 20%) revenue volatility, 8% (2024: 10%) risk-adjusted discount rate and 16% CAGR (2024:16%). The primary input into the model is the future revenue generation of the disposed 3D business. Management utilises forecasts received from this business and adjusts revenue based on the historical forecasting accuracy. Fair value movements are recognised in the Consolidated Income Statement in selling, general and administrative expenses.
Sensitivity observations on these three inputs show that a +/-1,000bps change in revenue volatility would result in \u00a35,000 decrease and \u00a32,000 decrease respectively, a +/ \u2013 100bps change in discount rate would result in \u00a3129,000 decrease and \u00a3131,000 increase in fair value respectively and a +/ \u2013 100bps on the CAGR would result in \u00a3118,000 increase and \u00a3101,000 decrease in fair value respectively.
Movements in the year are as follows:
31 December 2025
\u00a3\u2019000
31 December 2024
\u00a3\u2019000
Balance at 1 January
4,918
\u00a010,599
Earn out received
(207)
(120)
Milestone consideration received
\u2013
\u2013
Fair value loss on financial assets at FVTPL*
(177)
(5,561)
Balance at 31 December
4,534
\u00a04,918
Current
1,862
1,855
Non-current
2,672
3,063
Balance at 31 December
4,534
4,918
* Includes foreign exchange rate movements.
28. Financial instruments
Carrying and fair value
31 December 2025
\u00a3\u2019000
31 December 2024
\u00a3\u2019000
Financial instruments held at amortised cost
Trade and other receivables
9,320
6,598
Contract assets
514
1,018
Cash and cash equivalents
5,349
8,711
Non-current financial assets
100
104
Trade and other payables
(11,158)
(8,782)
Borrowings and invoice discounting
(475)
(557)
Lease liabilities
(4,896)
(5,928)
Financial instruments held at fair value
Financial asset at FVTPL
4,534
4,918
The Directors consider there to be no material difference between the carrying value and the fair value of the financial instruments classified as held at amortised cost. For the items classified as held at fair value, the fair value is recognised in the Consolidated Statement of Financial Position as the carrying amount.
Financial instruments held at fair value
The Group has one financial instrument held at fair value through profit/loss (FVTPL), the contingent consideration that arose on the Group\u2019s divestment of its remaining interest in Xaar 3D Limited during the year ended 31 December 2021.
In 2021, Xaar 3D Holdings Limited completed the divestment of its remaining interest in the share capital of Xaar 3D Limited. The Group received net cash consideration of \u00a39,272,000 as well as a potential entitlement to additional cash consideration of up to \u00a310,863,000 calculated on an earn-out basis at 3% of revenue per annum, with additional amounts becoming receivable on meeting revenue milestones.
Financial instruments that are measured at fair value are classified using a fair value hierarchy that reflects the source of inputs used in deriving the fair value. The three classification levels are:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3: from valuation techniques that include inputs for the asset or liability that are not based on observable market data (i.e. unobservable market inputs).
The financial asset at FVTPL is deemed to be a Level 3 instrument. Fair value is determined using a Monte Carlo Simulation with significant unobservable inputs being the 20% (2024: 20%) revenue volatility, 8% (2024: 10%) risk-adjusted discount rate and 16% CAGR (2024:16%). The primary input into the model is the future revenue generation of the disposed 3D business. Management utilises forecasts received from this business and adjusts revenue based on the historical forecasting accuracy. Fair value movements are recognised in the Consolidated Income Statement in selling, general and administrative expenses.
Sensitivity observations on these three inputs show that a +/-1,000bps change in revenue volatility would result in \u00a35,000 decrease and \u00a32,000 decrease respectively, a +/ \u2013 100bps change in discount rate would result in \u00a3129,000 decrease and \u00a3131,000 increase in fair value respectively and a +/ \u2013 100bps on the CAGR would result in \u00a3118,000 increase and \u00a3101,000 decrease in fair value respectively.
Movements in the year are as follows:
31 December 2025
\u00a3\u2019000
31 December 2024
\u00a3\u2019000
Balance at 1 January
4,918
\u00a010,599
Earn out received
(207)
(120)
Milestone consideration received
\u2013
\u2013
Fair value loss on financial assets at FVTPL*
(177)
(5,561)
Balance at 31 December
4,534
\u00a04,918
Current
1,862
1,855
Non-current
2,672
3,063
Balance at 31 December
4,534
4,918
* Includes foreign exchange rate movements.
Financial Statements
Strategic Report
Governance
Xaar plc Annual Report and Financial Statements 2025
137
28. Financial instruments continued
Capital risk management
The capital structure of the Group comprises of cash and cash equivalents, an Invoice Discounting Facility of \u00a33 million which operates for a minimum twelve months from its inception in September 2022, a Revolving Credit Facility of \u00a310 million (with a \u00a35 million additional accordion option) that has a maturity date of June 2029 and equity attributable to the owners of the Company.
The Group maintains a capital structure with the following objectives:
to protect the ability of the Group to continue as a going concern and maintain sufficient available resources as protection for unforeseen events;
to provide flexibility of resource for strategic growth and investment where opportunities arise; and
to provide reasonable returns to shareholders whilst maintaining a limited level of risk.
As part of achieving these objectives the Group identifies the principal financial risk exposures that are created by the Group\u2019s financial instruments and monitors them on a regular basis. These are considered to be foreign currency risk (a component of market risk), interest rate risk, credit risk and liquidity risk.
The Group monitors capital using a gearing ratio, which is determined as the proportion of debt to equity. Debt is defined as all long-term and short-term borrowings except for lease liabilities. Equity includes all capital and reserves of the Group attributable to the equity holders of the parent. The Group\u2019s policy for its existing business is to use debt where appropriate, whilst maintaining the gearing ratio at a level under 10%. The gearing ratio is as follows:
31 December 2025
\u00a3\u2019000
31 December 2024
\u00a3\u2019000
Borrowings (excluding lease liabilities)
475
557
Equity
56,631
62,182
Gearing ratio
1%
1%
Foreign currency risk
This is the risk that a change in currency rates causes an adverse impact on the Group\u2019s performance or financial position.
The Group receives approximately 43% (2024: 41%) of its revenues in US Dollars and 6% (2024: 7%) of its revenue in Euros, which are partially naturally hedged by supplies in these currencies; the remainder requires conversion into Sterling in order to fund the remaining costs of the Group's UK operations. The Group has R&D operations in Sweden, therefore, also incurs costs and holds cash balances in Swedish Krona. The Group the gearing up to increase production capacity in China and has entered into lease agreements, therefore incurrs costs and holds balances in Chinese Yuan.
The Group is mainly exposed to foreign currency risk resulting from transactions in US Dollars, Euros and Swedish Krona. The following table demonstrates the Group\u2019s sensitivity to a 10% increase and decrease in the Sterling exchange rate against the relevant foreign currencies on the Group\u2019s profit before tax and equity (due to changes in the fair value of monetary assets and liabilities). 10% represents management\u2019s assessment of the reasonably possible movement in exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. A positive number below indicates an increase in profit or equity.
Euro currency impact
US Dollar currency impact
Swedish Krona currency impact
Chinese Yuan currency impact
+10%
\u00a3\u2019000
\u201310%
\u00a3\u2019000
+10%
\u00a3\u2019000
\u201310%
\u00a3\u2019000
+10%
\u00a3\u2019000
\u201310%
\u00a3\u2019000
+10%
\u00a3\u2019000
\u201310%
\u00a3\u2019000
31 December 2025
Equity
(73)
89
(1,176)
1,437
13
(16)
(15)
(18)
31 December 2024
Equity
(41)
50
(1,713)
2,093
26
(31)
\u2013
\u2013
Interest rate risk
The Group\u2019s borrowing facilities, including its invoice discounting facilities, are linked to the Bank of England base rate for GBP values, and the Federal Bank base rate for USD values. An increase in these benchmarks would impact the Group\u2019s cost of borrowing which, in turn, would affect the Group\u2019s financial performance. Based on the invoice discounting facility balance at the year end, if interest rates had fluctuated +/ \u2013 100bps, and all other variables were held constant, the Group\u2019s profit for the year ended 31 December 2025 would decrease by \u00a35,000 or increase by \u00a35,000 respectively. There would be no effect on equity reserves.
Xaar plc Annual Report and Financial Statements 2025
138
Notes to the consolidated financial statements continued
for the year ended 31 December 2025
28. Financial instruments continued
2025
2024
Fixed rate financial liabilities
\u00a3\u2019000
Floating rate financial liabilities
\u00a3\u2019000
Interest free financial liabilities
\u00a3\u2019000
Total
\u00a3\u2019000
Fixed rate financial liabilities
\u00a3\u2019000
Floating rate financial liabilities
\u00a3\u2019000
Interest free financial liabilities
\u00a3\u2019000
Total
\u00a3\u2019000
Lease liabilities
(4,896)
\u2013
\u2013
(4,896)
(5,928)
\u2013
\u2013
(5,928)
Invoice discounting facility
\u2013
(475)
\u2013
(475)
\u2013
(557)
\u2013
(557)
Trade and other payables
\u2013
\u2013
(11,158)
(11,158)
\u2013
\u2013
(8,782)
(8,782)
Deferred consideration
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and insuring the suppliers, as a means of mitigating the risk of financial loss from defaults.
Trade receivables consist of a large number of customers, spread across different industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.
The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating\u00a0agencies. Additional credit insurance coverage is maintained where appropriate against agreed credit terms with customers.
Further information on the Group\u2019s trade receivable ageing and impairment can be found in Note 21.
Liquidity risk
This is the risk that the Group will have insufficient funds available in the right currency to settle its obligations as they fall due.
The Group aims to mitigate liquidity risk by managing cash generation by its operations and applying cash collection targets throughout the Group. Investment is carefully controlled, with authorisation limits operating up to Group Board level and cash payback periods applied as part of the investment appraisal process. In this way the Group aims to maintain a good credit rating to facilitate fund raising.
In order to mitigate the Group\u2019s liquidity risks, the Group can choose to fund significant fixed asset purchases by finance leases repayable over a period of three to five years dependent on the individual asset being financed and interest-bearing loans.
In its funding strategy, the Group\u2019s objective is to maintain a balance between continuity of funding and flexibility through the use of overdrafts, bank loans, finance leases and hire purchase contracts. The Group manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring cash flows and matching the maturity profiles of financial assets and liabilities.
On 19 March 2026, Xaar PLC successfully extended a \u00a35 million Revolving Credit Facility (RCF) agreement to\u00a0\u00a310 million, which matures in March 2029. The agreement includes an accordion option of a further\u00a0\u00a35 million\u00a0which can be requested at any time during the facility period, subject to lender approval and relevant fees. The facility as at 31 December 2025 remained undrawn (2024: undrawn).
The Group\u2019s policy is to invest any excess cash used in managing liquidity in financial instruments exposed to insignificant risk of changes in market value, being placed on interest-bearing deposit with maturities no more than 12 months.
The maturity profile of financial liabilities shown below represents the Group\u2019s gross expected contractual cash flows.
Less than
one year
\u00a3\u2019000
Between one and five years
\u00a3\u2019000
Over
five years
\u00a3\u2019000
Total
\u00a3\u2019000
31 December 2025
Trade and other payables
11,158
\u2013
\u2013
11,158
Invoice discounting facility
475
\u2013
\u2013
475
Lease rental payments
1,034
3,116
2,058
6,208
Less than
one year
\u00a3\u2019000
Between one
and five years
\u00a3\u2019000
Over
five years
\u00a3\u2019000
Total
\u00a3\u2019000
31 December 2024
Trade and other payables
8,782
\u2013
\u2013
8,782
Invoice discounting facility
557
\u2013
\u2013
557
Lease rental payments
1,442
3,985
2,058
7,485
28. Financial instruments
Carrying and fair value
31 December 2025
\u00a3\u2019000
31 December 2024
\u00a3\u2019000
Financial instruments held at amortised cost
Trade and other receivables
9,320
6,598
Contract assets
514
1,018
Cash and cash equivalents
5,349
8,711
Non-current financial assets
100
104
Trade and other payables
(11,158)
(8,782)
Borrowings and invoice discounting
(475)
(557)
Lease liabilities
(4,896)
(5,928)
Financial instruments held at fair value
Financial asset at FVTPL
4,534
4,918
The Directors consider there to be no material difference between the carrying value and the fair value of the financial instruments classified as held at amortised cost. For the items classified as held at fair value, the fair value is recognised in the Consolidated Statement of Financial Position as the carrying amount.
Financial instruments held at fair value
The Group has one financial instrument held at fair value through profit/loss (FVTPL), the contingent consideration that arose on the Group\u2019s divestment of its remaining interest in Xaar 3D Limited during the year ended 31 December 2021.
In 2021, Xaar 3D Holdings Limited completed the divestment of its remaining interest in the share capital of Xaar 3D Limited. The Group received net cash consideration of \u00a39,272,000 as well as a potential entitlement to additional cash consideration of up to \u00a310,863,000 calculated on an earn-out basis at 3% of revenue per annum, with additional amounts becoming receivable on meeting revenue milestones.
Financial instruments that are measured at fair value are classified using a fair value hierarchy that reflects the source of inputs used in deriving the fair value. The three classification levels are:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3: from valuation techniques that include inputs for the asset or liability that are not based on observable market data (i.e. unobservable market inputs).
The financial asset at FVTPL is deemed to be a Level 3 instrument. Fair value is determined using a Monte Carlo Simulation with significant unobservable inputs being the 20% (2024: 20%) revenue volatility, 8% (2024: 10%) risk-adjusted discount rate and 16% CAGR (2024:16%). The primary input into the model is the future revenue generation of the disposed 3D business. Management utilises forecasts received from this business and adjusts revenue based on the historical forecasting accuracy. Fair value movements are recognised in the Consolidated Income Statement in selling, general and administrative expenses.
Sensitivity observations on these three inputs show that a +/-1,000bps change in revenue volatility would result in \u00a35,000 decrease and \u00a32,000 decrease respectively, a +/ \u2013 100bps change in discount rate would result in \u00a3129,000 decrease and \u00a3131,000 increase in fair value respectively and a +/ \u2013 100bps on the CAGR would result in \u00a3118,000 increase and \u00a3101,000 decrease in fair value respectively.
Movements in the year are as follows:
31 December 2025
\u00a3\u2019000
31 December 2024
\u00a3\u2019000
Balance at 1 January
4,918
\u00a010,599
Earn out received
(207)
(120)
Milestone consideration received
\u2013
\u2013
Fair value loss on financial assets at FVTPL*
(177)
(5,561)
Balance at 31 December
4,534
\u00a04,918
Current
1,862
1,855
Non-current
2,672
3,063
Balance at 31 December
4,534
4,918
28. Financial instruments
Carrying and fair value
31 December 2025
\u00a3\u2019000
31 December 2024
\u00a3\u2019000
Financial instruments held at amortised cost
Trade and other receivables
9,320
6,598
Contract assets
514
1,018
Cash and cash equivalents
5,349
8,711
Non-current financial assets
100
104
Trade and other payables
(11,158)
(8,782)
Borrowings and invoice discounting
(475)
(557)
Lease liabilities
(4,896)
(5,928)
Financial instruments held at fair value
Financial asset at FVTPL
4,534
4,918
The Directors consider there to be no material difference between the carrying value and the fair value of the financial instruments classified as held at amortised cost. For the items classified as held at fair value, the fair value is recognised in the Consolidated Statement of Financial Position as the carrying amount.
Financial instruments held at fair value
The Group has one financial instrument held at fair value through profit/loss (FVTPL), the contingent consideration that arose on the Group\u2019s divestment of its remaining interest in Xaar 3D Limited during the year ended 31 December 2021.
In 2021, Xaar 3D Holdings Limited completed the divestment of its remaining interest in the share capital of Xaar 3D Limited. The Group received net cash consideration of \u00a39,272,000 as well as a potential entitlement to additional cash consideration of up to \u00a310,863,000 calculated on an earn-out basis at 3% of revenue per annum, with additional amounts becoming receivable on meeting revenue milestones.
Financial instruments that are measured at fair value are classified using a fair value hierarchy that reflects the source of inputs used in deriving the fair value. The three classification levels are:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3: from valuation techniques that include inputs for the asset or liability that are not based on observable market data (i.e. unobservable market inputs).
The financial asset at FVTPL is deemed to be a Level 3 instrument. Fair value is determined using a Monte Carlo Simulation with significant unobservable inputs being the 20% (2024: 20%) revenue volatility, 8% (2024: 10%) risk-adjusted discount rate and 16% CAGR (2024:16%). The primary input into the model is the future revenue generation of the disposed 3D business. Management utilises forecasts received from this business and adjusts revenue based on the historical forecasting accuracy. Fair value movements are recognised in the Consolidated Income Statement in selling, general and administrative expenses.
Sensitivity observations on these three inputs show that a +/-1,000bps change in revenue volatility would result in \u00a35,000 decrease and \u00a32,000 decrease respectively, a +/ \u2013 100bps change in discount rate would result in \u00a3129,000 decrease and \u00a3131,000 increase in fair value respectively and a +/ \u2013 100bps on the CAGR would result in \u00a3118,000 increase and \u00a3101,000 decrease in fair value respectively.
Movements in the year are as follows:
31 December 2025
\u00a3\u2019000
31 December 2024
\u00a3\u2019000
Balance at 1 January
4,918
\u00a010,599
Earn out received
(207)
(120)
Milestone consideration received
\u2013
\u2013
Fair value loss on financial assets at FVTPL*
(177)
(5,561)
Balance at 31 December
4,534
\u00a04,918
Current
1,862
1,855
Non-current
2,672
3,063
Balance at 31 December
4,534
4,918
Capital risk management
The capital structure of the Group comprises of cash and cash equivalents, an Invoice Discounting Facility of \u00a33 million which operates for a minimum twelve months from its inception in September 2022, a Revolving Credit Facility of \u00a310 million (with a \u00a35 million additional accordion option) that has a maturity date of June 2029 and equity attributable to the owners of the Company.
The Group maintains a capital structure with the following objectives:
to protect the ability of the Group to continue as a going concern and maintain sufficient available resources as protection for unforeseen events;
to provide flexibility of resource for strategic growth and investment where opportunities arise; and
to provide reasonable returns to shareholders whilst maintaining a limited level of risk.
As part of achieving these objectives the Group identifies the principal financial risk exposures that are created by the Group\u2019s financial instruments and monitors them on a regular basis. These are considered to be foreign currency risk (a component of market risk), interest rate risk, credit risk and liquidity risk.
The Group monitors capital using a gearing ratio, which is determined as the proportion of debt to equity. Debt is defined as all long-term and short-term borrowings except for lease liabilities. Equity includes all capital and reserves of the Group attributable to the equity holders of the parent. The Group\u2019s policy for its existing business is to use debt where appropriate, whilst maintaining the gearing ratio at a level under 10%. The gearing ratio is as follows:
31 December 2025
\u00a3\u2019000
31 December 2024
\u00a3\u2019000
Borrowings (excluding lease liabilities)
475
557
Equity
56,631
62,182
Gearing ratio
1%
1%
Capital risk management
The capital structure of the Group comprises of cash and cash equivalents, an Invoice Discounting Facility of \u00a33 million which operates for a minimum twelve months from its inception in September 2022, a Revolving Credit Facility of \u00a310 million (with a \u00a35 million additional accordion option) that has a maturity date of June 2029 and equity attributable to the owners of the Company.
The Group maintains a capital structure with the following objectives:
to protect the ability of the Group to continue as a going concern and maintain sufficient available resources as protection for unforeseen events;
to provide flexibility of resource for strategic growth and investment where opportunities arise; and
to provide reasonable returns to shareholders whilst maintaining a limited level of risk.
As part of achieving these objectives the Group identifies the principal financial risk exposures that are created by the Group\u2019s financial instruments and monitors them on a regular basis. These are considered to be foreign currency risk (a component of market risk), interest rate risk, credit risk and liquidity risk.
The Group monitors capital using a gearing ratio, which is determined as the proportion of debt to equity. Debt is defined as all long-term and short-term borrowings except for lease liabilities. Equity includes all capital and reserves of the Group attributable to the equity holders of the parent. The Group\u2019s policy for its existing business is to use debt where appropriate, whilst maintaining the gearing ratio at a level under 10%. The gearing ratio is as follows:
31 December 2025
\u00a3\u2019000
31 December 2024
\u00a3\u2019000
Borrowings (excluding lease liabilities)
475
557
Equity
56,631
62,182
Gearing ratio
1%
1%
The Group\u2019s policy is to invest any excess cash used in managing liquidity in financial instruments exposed to insignificant risk of changes in market value, being placed on interest-bearing deposit with maturities no more than 12 months.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396864": { "value": "Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and insuring the suppliers, as a means of mitigating the risk of financial loss from defaults.
Trade receivables consist of a large number of customers, spread across different industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.
The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating\u00a0agencies. Additional credit insurance coverage is maintained where appropriate against agreed credit terms with customers.
Further information on the Group\u2019s trade receivable ageing and impairment can be found in Note 21.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396865": { "value": "Liquidity risk
This is the risk that the Group will have insufficient funds available in the right currency to settle its obligations as they fall due.
The Group aims to mitigate liquidity risk by managing cash generation by its operations and applying cash collection targets throughout the Group. Investment is carefully controlled, with authorisation limits operating up to Group Board level and cash payback periods applied as part of the investment appraisal process. In this way the Group aims to maintain a good credit rating to facilitate fund raising.
In order to mitigate the Group\u2019s liquidity risks, the Group can choose to fund significant fixed asset purchases by finance leases repayable over a period of three to five years dependent on the individual asset being financed and interest-bearing loans.
In its funding strategy, the Group\u2019s objective is to maintain a balance between continuity of funding and flexibility through the use of overdrafts, bank loans, finance leases and hire purchase contracts. The Group manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring cash flows and matching the maturity profiles of financial assets and liabilities.
On 19 March 2026, Xaar PLC successfully extended a \u00a35 million Revolving Credit Facility (RCF) agreement to\u00a0\u00a310 million, which matures in March 2029. The agreement includes an accordion option of a further\u00a0\u00a35 million\u00a0which can be requested at any time during the facility period, subject to lender approval and relevant fees. The facility as at 31 December 2025 remained undrawn (2024: undrawn).
The Group\u2019s policy is to invest any excess cash used in managing liquidity in financial instruments exposed to insignificant risk of changes in market value, being placed on interest-bearing deposit with maturities no more than 12 months.
The maturity profile of financial liabilities shown below represents the Group\u2019s gross expected contractual cash flows.
Less than
one year
\u00a3\u2019000
Between one and five years
\u00a3\u2019000
Over
five years
\u00a3\u2019000
Total
\u00a3\u2019000
31 December 2025
Trade and other payables
11,158
\u2013
\u2013
11,158
Invoice discounting facility
475
\u2013
\u2013
475
Lease rental payments
1,034
3,116
2,058
6,208
Less than
one year
\u00a3\u2019000
Between one
and five years
\u00a3\u2019000
Over
five years
\u00a3\u2019000
Total
\u00a3\u2019000
31 December 2024
Trade and other payables
8,782
\u2013
\u2013
8,782
Invoice discounting facility
557
\u2013
\u2013
557
Lease rental payments
1,442
3,985
2,058
7,485
29. Share-based payments
Year ended
31 December 2025
\u00a3\u2019000
Year ended
31 December 2024
\u00a3\u2019000
Equity-settled share-based payments expense
872
\u00a01,182
Cash-settled share-based payments expense
14
\u2013
Social security contributions release
(31)
(85)
855
\u00a01,097
Included in the above is \u00a324,000 of Share-based payments expenses in the discontinued operations (2024: \u00a3117,000).
The Group operates a number of share schemes for certain employees of the Group as follows:
2017 Share save scheme (SAYE);
2017 Long term incentive plan (LTIP); and
2020 Deferred bonus plan (DBP).
Options or conditional share grants under each scheme have been aggregated.
Vesting periods range from one to four years. Where options remain unexercised after a period of ten years from the date of grant, or forty-two months in the case of the share save scheme, they expire and are no longer exercisable. Options are forfeited if the employee leaves the Group before they vest, save where the employee is deemed to be a \u2018good leaver\u2019, in which case options awarded are pro-rated to the leaving date.
Save as You Earn Scheme
Year ended 31 December 2025
Year ended 31 December 2024
Number
Weighted average
exercise price pence
Number
Weighted average
exercise price pence
Outstanding at beginning of year
1,138,548
113p
\u00a01,547,502
\u00a0134p
Granted
498,793
107p
\u00a0499,954
\u00a080p
Forfeited
(294,459)
126p
(841,090)
\u00a0133p
Exercised
0p
(67,818)
\u00a094p
Outstanding at end of year
1,342,882
108p
\u00a01,138,548
\u00a0113p
Number of options exercisable at end of year
175,862
140p
\u00a0112,033
\u00a0129p
Year ended
31 December 2025
Year ended
31 December 2024
Weighted average fair value of options granted
59p
\u00a038p
Weighted average share price at date of exercise
0p
\u00a0130p
Weighted average remaining contractual life
\u00a02 years
\u00a02 years
The inputs into the Black-Scholes model are as follows:
Year ended
31 December
2025
Year ended
31 December
2024
Date of grant
21 October 2025
1 November 2024
Share price at grant (pence)
\u00a0124.5p
\u00a088p
Exercise price
107p
\u00a080p
Expected volatility
55.6%
50.3%
Risk-free rate
3.7%
4.3%
Expected term
\u00a03.36 years
\u00a03.33 years
Expected volatility was determined by calculating the historical volatility of the Group\u2019s share price over periods ranging from the previous one to three years. The expected life used in the model has been adjusted, based on management\u2019s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
Xaar plc Annual Report and Financial Statements 2025
140
Notes to the consolidated financial statements continued
for the year ended 31 December 2025
29. Share-based payments continued
Long-Term Incentive Plans
Year ended
31 December 2025
Number
Year ended
31 December 2024
Number
Outstanding at beginning of year
4,075,629
\u00a03,582,275
Granted
1,707,422
\u00a01,462,281
Forfeited
(513,563)
(792,708)
Exercised
(463,295)
(176,219)
Outstanding at end of year
4,806,193
\u00a04,075,629
Number of options exercisable at end of year
1,236,333
\u00a01,410,759
Year ended
31 December 2025
Year ended
31 December 2024
Weighted average fair value of options granted
\u00a090p
\u00a088p
Weighted average share price at date of exercise
105p
\u00a0132p
Weighted average remaining contractual life
8 years
\u00a08 years
Fair values of the awards with a performance condition based on non-market conditions, for example earnings per share, are calculated using the Black-Scholes model. The inputs into the models for awards granted in the current and prior years were as follows:
Year ended
31 December
2025
Year ended
31 December
2024
Date of grant
6 May 2025
29 April 2024
Share price at grant (pence)
104.5p
\u00a0115p
Expected volatility
60.2%
51.5%
Risk-free rate
4.0%
4.2%
Contractual life (years)
3 years
\u00a03 years
Fair values of the awards with a performance condition based on market condition (total shareholder return) are calculated using the Monte Carlo model. The inputs into the models for awards granted in the current and prior years were as follows:
Year ended
31 December
2025
Year ended
31 December
2024
Date of grant
6 May 2025
29 April 2024
Share price at grant (pence)
104.5p
\u00a0115p
Expected volatility
59.7%
51.5%
Risk-free rate
3.7%
4.2%
Contractual life (years)
3 years
\u00a03 years
All LTIP awards are subject to achievement of the performance conditions and can be exercised up to ten years after the grant date. Save as permitted in the LTIP rules, awards lapse on an employee leaving the Group.
Long-Term Incentive Plans (Cash settled)
These LTIP awards mirror the criteria of our equity settled LTIPs but are specifically to be settled in cash on vesting date. They are revalued at each reporting date with the gain/loss taken through the profit/loss.
Year ended
31 December 2025
Number
Year ended
31 December 2024
Number
Outstanding at beginning of year
\u2013
\u2013
Granted
70,000
\u2013
Forfeited
\u2013
\u2013
Exercised
\u2013
\u2013
Outstanding at end of year
70,000
\u2013
Number of options exercisable at end of year
\u2013
\u2013
Financial Statements
Strategic Report
Governance
Xaar plc Annual Report and Financial Statements 2025
141
29. Share-based payments continued
Long-Term Incentive Plans (Cash settled) continued
Year ended
31 December 2025
Year ended
31 December 2024
Opening balance
\u2013
\u2013
Fair value movement taken to profit and loss
14
\u2013
Settled
\u2013
\u2013
Liability at end of year
14
\u2013
Deferred bonus plan
Under the Group\u2019s deferred bonus plan, the Executive Directors are awarded an annual bonus. 70% is achieved in cash and 30% is awarded in the form of shares for which there is a compulsory holding period of two years and a requirement for continued employment before these fully vest to the employees (deferred shares).
Year ended
31 December 2025
Number
Year ended
31 December 2024
Number
Outstanding at beginning of year
98,187
\u00a098,187
Granted
\u2013
\u2013
Forfeited
\u2013
\u2013
Exercised
(17,538)
\u2013
Outstanding at end of year
80,649
\u00a098,187
Number of options exercisable at end of year
23,249
\u00a034,098
Year ended
31 December 2025
Year ended
31 December 2024
Weighted average fair value of options granted
n/a
\u00a0n/a
Weighted average share price at date of exercise
77p
\u00a0n/a
Weighted average remaining contractual life
7 years
\u00a08 years
Fair values of the awards with a performance condition based on non-market conditions, for example earnings per share, are calculated using the Black-Scholes model. No awards were granted during the current year.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396912": { "value": "33. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
With the exception of transactions with Directors, there were no other transactions during either the current or preceding year with related parties who are not members of the Group. Details of the remuneration of the Directors is set out in the Directors\u2019 Remuneration Report on pages 70\u00a0to 92.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396913": { "value": "35. Subsequent events
On 19 March 2026, Xaar PLC successfully extended a \u00a35 million Revolving Credit Facility (RCF) agreement to \u00a310 million, which matures in March 2029.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:213800MXEC3KAOBBPO57", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "shtag_7396866": { "value": "C6. Investments in subsidiaries
31 December 2025
\u00a3\u2019000
31 December 2024
\u00a3\u2019000
At 1 January
97,041
99,909
Addition
400
\u2013
Impairment
(548)
(3,619)
Capital contributions arising from share-based payments
300
751
At 31 December
97,193
\u00a097,041
Addition
During the year the Company incorporated Xaar Inkjet Technology (Dongguan) Co Ltd, with a capital injection of \u00a3400,000.
Impairment
Impairment reviews are undertaken if events or changes in circumstances indicate that the carrying value may not be recoverable and a potential impairment may be required. Impairment reviews have been performed for the investments making up the Printhead cash generating unit, namely XaarJet Limited, Xaar Technology Limited, Xaar Jet (Overseas) Limited, Xaar Inkjet Technology (Shenzen) Limited and Xaar Inkjet (Dongguan) Limited. Additionally, reviews were carried out for FFEI Limited, Megnajet Limited, Technomation limited, Pad Print Machinery of Vermont Inc and Xaar US Holdings Inc.\t
The remaining revenue streams of the FFEI Limited business have migrated to Xaar Jet Limited. This represents a significant change in the extent or manner in which an asset is used or is expected to be used, which therefore meets the indicator laid out in IAS 36. As a result the investment was tested for impairment, the investment was impaired to the recoverable net asset value, resulting in an impairment of \u00a3426,000. The primary driver for the reduction in the net asset value was a dividend declared and paid to Xaar PLC of \u00a3600,000.
During the year, the Group reviewed the strategic direction and future operating model for its ink supply activities which relate to the Megnajet and Technomation investment. As part of this review, it became clear that the structure and future operation of the business will change. This change means that the future value of this investment will not continue in its previous standalone form and that its future financial performance will no longer be separable for impairment testing purposes. As a result of this assessment, the investment was impaired to the recoverable net asset value, resulting in an impairment of \u00a3122,000.
The Directors believe that the carrying values of investments in the remaining subsidiaries (not identified above) are at least equal to their recoverable amounts. Therefore, no further impairments have been recognised in either the current or previous years.
The investment in XaarJet Limited was tested using discounted future cash flow forecasts to compute the value in use. A discount rate of 13.3% has been used. Revenue growth of 4.2% compounded annual growth rate (CaGR) to 2030 and a terminal growth rate of 2%, would result in a value in use equal to the investment value. Management forecasts expect to exceed this and are supported by a strong pipeline \u2013 refer to the strategic opportunities outlined in the Strategic update on pages 5\u00a0to 6.
Capital contributions arising from share-based payments
These amounts represent the fair value of equity-settled share options awarded to employees of subsidiary undertakings.
Notes to the Company financial statements continued
Financial Statements
Strategic Report
Governance
Xaar plc Annual Report and Financial Statements 2025
149
C6. Investments in subsidiaries continued
Subsidiaries
The subsidiary undertakings of the Company are listed below. All subsidiaries are directly owned by the Company except where indicated otherwise\t
Name
Country of incorporation
Address of registered office
Principal activity
Issued and fully paid up share capital
Proportion of ordinary share capital held by\u00a0the Company
Xaar Technology Limited
England & Wales
Cambridge Research Park, Waterbeach, Cambridge, CB25 9PE
Research and development
4,445,322 ordinary \u00a31 shares
100%
XaarJet Limited
England & Wales
Cambridge Research Park, Waterbeach, Cambridge, CB25 9PE
Manufacturing, research and development and sales and marketing
2 ordinary \u00a31 shares
100%
XaarJet (Overseas) Limited
England & Wales
Cambridge Research Park, Waterbeach, Cambridge, CB25 9PE
Sales and marketing
1 ordinary \u00a31 share
100%
Xaar Trustee Limited1
England & Wales
Cambridge Research Park, Waterbeach, Cambridge, CB25 9PE
Trustee
2 ordinary \u00a31 shares
100%
Xaar Digital Limited
England & Wales
Cambridge Research Park, Waterbeach, Cambridge, CB25 9PE
Treasury
100 ordinary \u00a31 shares
100%
Xaar 3D Holdings Limited
England & Wales
Cambridge Research Park, Waterbeach, Cambridge, CB25 9PE
Holding company
1,100 ordinary shares of \u00a30.01 each
100%
Xaar US Holdings Inc.
USA
1000 Post and Paddock, Suite 405, Grand Prairie, Texas 75050, USA
Holding company
10,000 shares of common stock US$1 each
100%
Pad Print Machinery of Vermont Inc.2
USA
201 Tennis Way, East Dorset, VT 05253, USA
Manufacturing, sales and marketing
200 shares of common stock US$1 each
100%
Xaar Americas Inc.2
USA
1000 Post and Paddock, Suite 405, Grand Prairie, Texas 75050, USA
Sales and marketing
10,000 shares of common stock US$1 each
100%
Xaar Inkjet Technology (Shenzhen) Company Limited
China
Room 409, Floor 4, Building 13,Fuhai Industrial Zone, Fuzhou Avenue, Shenzhen, China
Sales and marketing
30 ordinary shares of \u00a310,000 each
100%
FFEI Limited
England & Wales
Cambridge Research Park, Waterbeach, Cambridge, CB25 9PE
Manufacturing, sales and marketing
100,000 ordinary \u00a31 shares
100%
Megnajet Limited
England & Wales
Cambridge Research Park, Waterbeach, Cambridge, CB25 9PE
Manufacturing, sales and marketing
1 ordinary \u00a31 share
100%
Technomation Limited
England & Wales
Cambridge Research Park, Waterbeach, Cambridge, CB25 9PE
Research and development
100 ordinary \u00a31 shares
100%
Xaar Inkjet Technology (Dongguan) Co Ltd
China
No. 1 Yile Road, Songshan Lake High-Tech Industrial Development Zone, Dongguan City, Guangdong Province, China.
Manufacturing, sales and marketing
40 ordinary shares of \u00a310,000 each
100%
1. Xaar Trustee Limited shares are held by Xaar Technology Limited.2. Xaar Americas Inc and Pad Print Machinery of Vermont Inc. shares are held by Xaar US Holdings Inc.