Xaar plc

CHINA BUSINESS UPDATE: RECENT EARTHQUAKE

Xaar plc ("Xaar"), the inkjet printing technology group headquartered in Cambridge, is providing a short update on the likely effect on its business of the recent earthquake in the Sichuan area of China.  China is Xaar's largest sales territory.

As a consequence of the earthquake, Xaar's customers in China (OEM manufacturers of mainly wide/grand format printing machinery) believe that there will be a temporary reduction in activity by end-users within China as a whole. This is expected to result in a short term reduction in sales of Xaar Platform 1 products.  While this is expected to affect Xaar's revenues in the first half year to 30 June 2008, profits for the first half year and 2008 as a whole are expected to remain in line with market consensus.

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