Printing technology group Domino Printing's (DNO) hefty half-year loss reflected a £27m impairment charge on the group's 14.85 per cent stake in compliance and traceability systems specialist, TEN Media. Adjust for that and pre-tax profit fell by a less drastic 3 per cent to £25m.
The TEN Media investment has now been written down to just 10 per cent of the original cost, following TEN's failure to raise the finance necessary to meet its anticipated capital needs. Its supply chain systems were to use Domino's products exclusively for coding requirements and there's no certainty that TEN will be able to raise the finance needed to commercialise its systems.
That aside, sales in Domino's core business grew 4 per cent, while acquisitions Graph-Tech and PostJet contributed a further 3 per cent. Equipment sales, which generate 43 per cent of group revenue, grew 7 per cent, while revenue from spares and servicing rose 10 per cent. Sales and distribution costs increased by £4.1m, however, and investment in acquired businesses and additional print resources reached over £2m. But the gross margin held up reasonably well - it eased from 49.6 per cent to 48.7 per cent.
Broker Numis Securities expects adjusted full-year pre-tax profit of £55.1m, giving adjusted EPS of 36.5p (from £53.7m and 36p in 2012).
| DOMINO PRINTING SCIENCES (DNO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 579p | MARKET VALUE: | £648m | |
| TOUCH: | 575-582p | 12-MONTH HIGH: | 721p | LOW: 504p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 50 | |
| NET ASSET VALUE: | 173p* | NET CASH: | £13.6m | |
| Half-year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 151 | 24.7 | 16.5 | 7.24 |
| 2013 | 162 | -3.76 | -8.86 | 7.60 |
| % change | +7 | - | - | +5 |
Ex-div: 10 Jul Payment: 16 Aug *Including intangible assets of £111m, or 99p a share | ||||
