Profits climb at Domino Printing

DOMINO Printing, which makes machines that can print variable information such as sell-by dates, surprised the market yesterday with a 32 per cent rise in pre-tax profits to pounds 11.9m ( pounds 9.03m), writes Tom Stevenson. The company's shares rose 35p to 506p.

More than half the profits improvement came from interest receivable following a pounds 15m rights issue a year ago that left Domino with net cash at the year end of pounds 19m.

Sales also grew strongly, however, jumping 19 per cent to pounds 71.6m ( pounds 60.4m). Howard Whitesmith, managing director, attributed about half the increase to higher demand, especially in the US, and the rest to gains in market share.

Earnings per share rose 8 per cent to 30p from 27.7p. A final dividend of 4.8p made a total for the year of 7.2p, up from 6.25p.

Operating profits were up 45 per cent in the US, where Mr Whitesmith saw the biggest potential for growth. The return sales in the US of 13 per cent were well up on last year's 9 per cent but still behind Europe's 22 per cent return.

European sales outside the UK grew 12 per cent, reflecting slowing economies after a strong performance in the previous year. Profits were 11 per cent ahead.

Domino has 50 per cent of the market for non-contact, continuous ink-jet printing in Europe and about 18 per cent in the US. A target of more than 20 per cent has been set for this year.

With 25 per cent of sales made in the US, and 85 per cent overseas, current exchange rates will help comparisons this year. Jeremy Allen, an analyst at Kleinwort Benson, expects another 11 per cent rise in profits this year to pounds 13.25m.