Domino commits to innovation despite market conditions

Coding and printing technology specialist Domino Printing Sciences has said it will maintain a focus on innovation, despite ongoing caution in the global economy.
 
In an interim management statement looking back on the first four months of its current financial year, which started in November 2011, the company said uncertainty around Europe's financial strength and stability has continued from the second half of its 2010-11 financial year into 2012, impacting business confidence levels around the world and slowing the rate of order conversion on capital equipment projects.
 
It said interest in its product range remains strong and sales project activity is at normal levels in most parts of the Group. However, external conditions have led to extended sales cycles and deferrals in decision making as customers remain cautious about investment commitments. 
 
Domino said this lack of confidence is most notable in Europe but has also been experienced in China where the level of larger projects, which have driven growth in the past, is running below that of last year. In addition, sales in the Middle East have been impacted adversely by the events across the region.
 
Order intake rates for new equipment have been below the prior year during this period also, although there is no indication at present that the manufacturing output of its customers is slowing and after-market revenues remain as expected, Domino said. Total sales revenues for the first four months of the 2011-12 year were six percent below the corresponding period last year. Sales in the first quarter of 2011 benefited from a strong opening order book and more buoyant market conditions, the company said.
 
In the interim management statement, Domino said: ‘We remain cautious about market conditions and we continue to manage the business accordingly including maintaining a very careful control over costs.
 
‘Group headcount has remained static over the period of this statement; however, we are maintaining our commitment to research and development and expect further new product releases over the course of the year.
 
‘In the short-term we do not expect that sales will continue at levels below last year, but given ongoing uncertainty in market conditions we consider it unlikely that we will see sales growth for the year as a whole.’
 
Recently developed products are already performing well, Domino said. ‘The strong growth trends reported in 2011 in the sale of thermal transfer and print and apply labeling printers have continued.
 
‘Our new digital press product has been well received by the market and sales in the first four months of the year of the monochrome version have met our expectations. Our full-color press is presently undergoing field trials and we expect to launch that product at the end of this year.’