News Column

Domino Printing Swings To Profit In Half Year But Cautious For FY15

June 23, 2014

Hana Stewart-Smith

LONDON (Alliance News) - Domino Printing Sciences PLC Tuesday expressed confidence it will meet its expectations for the current full year as it swung into a profit in the half year to end-April, although it cautioned that its results for fiscal 2015 could be broadly similar to 2014.

The printing equipment company upped its interim dividend to 7.98 pence from 7.60 pence.

Although the company remains optimistic about its longer-term prospects, it is cautious about its prospects for 2015, due to competitive pricing in Asia and other developing markets, and a need to make additional research and development investments.

Domino swung into a pretax profit of GBP25.9 million in the recent half from a pretax loss of GBP3.8 million in the same period a year earlier, as revenue rose to GBP173.8 million from GBP161.9 million, benefiting from lower exceptional costs.

In the previous year the company had posted exceptional costs of GBP27.1 million, as a result of writing down its investment in TEN Media.

Domino acquired a 15% stake in TEN Media, which produces technology for health checks on eggs, in 2011. The company was expected to generate positive returns during 2013. However it faced delays and a shortage of funds, and failed to produce revenue and profits.

The company said it had benefited from more stable economic conditions during the half year, which had led to improved customer confidence.

New products brought in during the year boosted equipment revenues by 15%. Domino invested GBP8.9 million in research and development during they year to introduce a range of new products. However, it noted that the rapidly changing digital print environment meant that it would have to make "significant additional" investment to maintain a competitive advantage.

Domino continued to make progress with its new N-Series colour digital label presses; it installed eight of the presses during the half year, and has orders for a further eight from which it expects to see revenue in the full year.

Gross margin narrowed to 47.2%, down from 48.7% in the previous year, as revenues from printers grew but the average selling price of printers in Asia and other developing markets were reduced.

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Source: Alliance News

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