By Samantha Schmidt
LONDON--Domino Printing Sciences PLC (DNO.LN) shares fell 14%
Tuesday, leading the FTSE 250 losers, after cautioning on its
outlook for fiscal 2015, citing competitive pricing in Asia and the
U.S., and the need for extra investment, despite saying the current
year ending in October will be in line with its expectations.
The company said it expects results for the year ended October
2015 to be "broadly similar" to the current fiscal year, without
giving any further detail. However, Managing Director Nigel Bond
told Dow Jones Newswires that Domino's product leadership has
spawned a new level of price intensity among small Chinese players
and American companies.
"They've reacted to what they're seeing with some fairly
aggressive price cuts," Mr. Bond said.
The ink jet printing firm, which makes bar codes and digital
labels, needs to invest in new products and research and
development, Mr. Bond said.
Domino's two largest competitors are still Danaher Corp. (DHR)
and Dover Corp. (DOV), both U.S. companies, Mr. Bond added.
Despite the recent price competition, the board said it is
confident it will meet expectations for the remainder of fiscal
2014 ending Oct. 31. Earlier Tuesday the company reported a swing
to pretax profit of 25.9 million pounds ($44.1 million) for the
half year ended April 30, compared with a loss of GBP3.8 million a
year earlier caused by high exceptional costs for organizational
changes. Revenue increased 7% to GBP173.8 million, from GBP161.9
million.
Domino posted strong growth in Asia and North America, driven by
a growing middle class with disposable income, Mr. Bond said. He
added that confidence is returning in its European market, which
comprises 43% of group revenue.
Shares at 0900 GMT down 103 pence, or 14%, at 635 pence, valuing
the company at GBP714 million.
Write to Samantha Schmidt at samantha.schmidt@dowjones.com