Domino Printing Sciences Shares Fall 14% After Cautious FY15 Outlook

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.

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