Highlights
Double digit growth in USA
Strong growth in Germany but trading conditions across the rest of Europe remain difficult
Asian businesses continue to perform well; China returns to growth
Digital label press business is progressing strongly
R&D investment increased by 25 per cent
Difficulties continue in TEN Media. Investment written down.
Peter Byrom, Chairman, commented "Sales in the six months to 30 April 2013 were 7 per cent ahead of the comparable period last year. New equipment revenues were 7 per cent up with strong growth in Asia, USA and Germany compensating for ongoing difficult trading conditions across most of Europe. Particularly pleasing has been the demand for our new colour digital label press launched in October 2012; by the half year we had secured our targeted full year order intake. Demand for fluids, consumables and other after market products, which represent 57 per cent of sales, has been in line with expectations.
"We have invested in those areas of the business where we see growth opportunities. The acquisition of Graph-Tech in June last year added technical and integration skills for the development of our digital printing business and we have subsequently added sales and technical resources enhancing our digital print and colour management competencies. We have invested in additional sales and service resources in the USA and in Asia, markets where demand for our products has been strong. In January, as part of a programme to strengthen sales and product management and drive greater sales effectiveness across the Group, we added two experienced senior executives. Selling, distribution and administrative expenses before exceptional costs grew by 7 per cent and Research and Development expenditure increased by 25 per cent.
"TEN Media has not yet raised the new finance necessary to meet its anticipated capital needs. In light of this we have written down the carrying value of the investment held in TEN Media to 10 per cent of the original cost. Domino has successfully demonstrated it can meet the requirements of its exclusive supply agreement with TEN Media.
"There continues to be uncertainty in Europe and we remain cautious about markets in this region. Elsewhere there are signs of economic growth and our performance in America and Asia coupled with strong sales of digital press products provides confidence that we will maintain current growth levels for the year as a whole. We remain confident in the longer-term prospects for the Group."
