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CAUTIOUS DOMINO SEES BENEFITS FROM US ACQUISITION IN SECOND HALF 1988

Nothing for shareholders to complain about in the figures from Domino Printing Sciences (see opposite page), although the figures look a bit cockeyed – pre-tax up 25%, earnings per share up 30%, net profits up 56% – but that all comes about as a result of acquisition of the Oxford company’s US partner, which now trades as Domino Amjet Inc. The figures include one quarter’s contribution from the acquisition, but its greatest immediate benefit to the group is a nil tax charge, which reduced the effective tax rate to just 28%, hence the sharp rise in net profits – tax at UKP1.27m this time was actually below last year’s UKP1.34m. Nevertheless, the acquisition has by no means been painless and the company says that the protracted negotiations caused a loss of sales momentum and that integration was taking longer than expected. Additional costs were incurred in reorganising the group and strengthening the management structure. It is investing UKP6m in a new 100,000 square foot facility in Bar Hill to bring together research and development, manufacturing and marketing activities presently spread over five sites. Domino also reports that sales for coding and marking applications have not grown as expected, and there have been manufacturing problems. Domino is now a thoroughly international company, selling even into the toughest major markets, Japan, over UKP1m, three times last year’s figure, and West Germany, 68% up at UKP2.8m. Research and development expenditure of UKP1.14m only 5.3% of turnover – is promised to result in two important new products from the printing technology company this spring. Further expenses will be incurred in moving to new facilities in the US in the summer, and Domino expects no profit from there for the first half, although it looks for a contribution in the second half. In the UK, the rest of Europe and the Far East, the company says it looks for continued profitable growth in 1988.

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CBR Staff Writer

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