"The company is in really good shape," Nigel Bond, managing director at Domino Printing Sciences (DNO), tells us. A quick glance at the specialist printer's half-year numbers suggests he's right, and analysts are talking about upgrading full-year forecasts. Read on, however, and a warning that a price war across developing markets will snuff out growth next year explains the 19 per cent slump in Domino's share price to a nine-month low.
Clearly, 2014 is not the problem. Revenue grew faster than the City expected, with Europe, the US and Asia all up sharply. New products sold well and adjusted pre-tax profit jumped 10 per cent to £27.5m. Now, however, rivals unable to compete with products are slashing prices instead. This is the case not only across South East Asia, China and India, but in South America and the Middle East, too. "It could go on for a while yet," admits Mr Bond. At the same time, Domino is ramping up research spending by about 20 per cent, or £4m, to keep ahead of the competition.
City consensus estimates for financial 2015 need to drop by 11 per cent to compensate, believes Numis Securities. The broker expects full-year adjusted pre-tax profit of £57.3m, with adjusted EPS of 38.3p (from £53m and 35.3p in 2013), rising to £58.7m and 39.5p next year.
CHEMRING (CHG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 596p | MARKET VALUE: | £670m | |
| TOUCH: | 596-599p | 12-MONTH HIGH: | 881p | Low: 562p |
| DIVIDEND YIELD: | 3.7% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 175p* | NET CASH: | £20.9m | |
| Half-year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 162 | -3.8 | -8.9 | 7.6 |
| 2014 | 174 | 25.9 | 17.3 | 7.98 |
| % change | +7 | - | - | +5 |
Ex-div: 9 Jul Payment: 15 Aug *Includes intangible assets of £103m, or 92p a share | ||||
