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Last updated: June 22, 2010 4:43 am
Domino Printing Sciences said that demand for ink had risen to pre-recession levels as its industrial customers increased their capital expenditure budgets.
The group also said that demand for printing equipment had risen 30 per cent year-on-year.
Domino manufactures coding and labelling machinery that is used by manufacturers to print barcodes and best-before dates on consumer products such as foods and pharmaceuticals.
However, sales slowed in the final two months of the first half to April 30, as the rate at which customers restocked their inventories contracted.
Nigel Bond, group managing director, cautioned that the business had not fully recovered from the recession. For the half year, the group saw revenue rise 17 per cent to £144.8m ($214.7m). This compared with a 19 per cent rise in the first four months of the year to February.
“The underlying trend is still at pre-recession levels,” said Mr Bond. “We remain cautious about the European economic outlook but are seeing positive signs throughout the Americas and Asia.”
Pre-tax profits more than doubled to £23.9m. Diluted earnings per share jumped from 6.69p to 15.32p and the interim dividend rises 20 per cent to 5.48p.
The shares, which have more than doubled in the past year, eased 3.4p to 461.6p on Monday.
“Domino is now well into the recovery phase and it appears to be heading for full-year results ahead of consensus expectations,” said Michael Blogg, an analyst at Arbuthnot Securities.
“Even if the lower rate of growth is extrapolated into the second half, it would lead to a higher rate of sales growth than the 10 per cent assumed by the market,” he said.
The FTSE 250 group, which makes more than 90 per cent of its sales overseas, said like-for-like sales rose 17 per cent, while adverse foreign exchange movements hit earnings by 2 per cent.
Domino also increased research and development spending by 20 per cent and said that it expected to extend it further in the second half as it launched additional products.
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