The two trading statements issued by Domino Printing Sciences Plc in September and November did the trick as the Cambridge- based company was hit hard by another technical problem in the half, which, when combined with one in the first half cost it almost #4m (CI No 2,801, 2,747). It also laid off 60 people and took a #1.5m restructuring hit. And despite all this, the inkjet and laser printing company’s shares actually rose slightly yesterday as it announced a 60% plunge in pre-tax profits for the year. The first half problems were behind the company when it last reported back in June (CI No 2,694), but these were fairly trivial compared with what came later. A problem with a raw material in one of the inks whereby submicron particles that were not normally present caused the ink to become unstable resulted in increased service costs, the replacement of the ink and manufacturing losses. The word is that the new ink is fine and things have been getting back to normal since the year-end last October. Turnover in the year was up 17% to #105.6m. After the problems, costs were cut at headquarters and PackTrack in the UK and Control Print in the US were scaled back. This resulted in the #1.5m restructuring charge. Europe continues to languish behind Domino’s other markets, with just a 7% rise in turnover outside the UK to #36.5m, with only Scandinavia winning a mention. At home sales were up 12% to #13.3m. But overall European operating profits were down 27% at #9.0m. The Americas has taken over as Domino’s largest market this time round, and sales here were up a healthy 33% to #41.5m. Operating profits fell 16% to #3.8m. In Latin America, problems with the Mexican economy were offset by good progress in Brazil, Chile and Argentina. Japanese turnover was up 20% and the rest of the Far East, as well as the Middle East performed well. Apart from Control Print, the new businesses were up to expectations. Net cash at the year-end was #6.6m, down from #16.3m last time, as working capital requirements were up predictably enough, as stock levels had to be increased to ensure immediate customer support. With the first quarter of the new year building up to near normal trading levels and costs reduced following the restructuring, chairman Gerald Dennis said there was now a solid base for an improvement in the company’s performance in 1996. The final dividend was maintained at 6.4 pence to make a total of 10.1 pence, up from 9.6 pence last time.
