Domino's Full Year Results for 2012
Wednesday, December 12, 2012
Press release from the issuing company
- Strong performance in the USA and many developing economies
- Good volume growth from new products
- Robust after market sales
- Investment made in digital printing business; good progress with digital label press products
- Strong operational cash flows and robust balance sheet
- Dividend increased by 10 per cent
Peter Byrom, Chairman, commented "Against the backdrop of a continuing tough economic environment the Group has delivered sales of £312.1 million, underlying profits of £53.7 million and net cash inflow from operating activities before tax of £56.4 million. The Board has declared an increase in the annual dividend of 10 per cent.
"Our businesses in the USA, most of Asia, the Middle East and Africa have all made good progress but in parts of Europe and in China sales were below last year. Market conditions have been more difficult and we continue to see extended sales cycles for equipment. The after market business has continued to perform robustly and while capital spend among customers is reduced compared to last year, consumable sales grew by 6 per cent, in line with our expectations.
"We have been pleased with the performance of our newer product lines and have once again recorded good volume growth in Laser, Thermal Transfer Overprinters and Thermal Ink Jet. Our new digital label press, the K600i, exceeded our sales targets in the year and, following a successful beta trial, we were pleased to launch the N600i full colour label press at PackExpo in the USA during October. We already have first orders for this product.
"Investment in Research and Development was increased to £16.7 million. We have launched a number of new printer and fluids products over the course of the year and have made further progress towards the introduction of a new generation of printers based upon common technology architecture.
"In June, the Group acquired Graph-Tech and PostJet, adding to our core capability in digital printing and opening up new opportunities in this fast growing market.
"TEN Media has made progress with the development of the full supply chain compliance systems which will exclusively use Domino products for all coding requirements. Timing of the roll-out programme remains uncertain.
"We remain cautious about market conditions and their impact on the investment plans of our customers. Against this backdrop we are optimistic about prospects for the future. We continue to invest in new products which are driving growth, our after market business is robust and we expect our investments in new opportunities to contribute to growth in 2013 and beyond"
Against the backdrop of a continuing tough economic environment the Group has delivered sales of £312.1 million, underlying profits of £53.7 million and net cash inflow from operating activities before tax of £56.4 million.
The Group has invested a record amount in Research and Development in the year and continues to pursue a strategy of product leadership. We are very pleased with early sales of the new digital label press and our acquisitions of Graph-Tech and PostJet have added significant capability to our digital print business.
We continue to build a sustainable growth model for the business and despite the current weaker market conditions we have maintained investment in our global service and support organisation.
The Board is proposing a final dividend of 13.39 pence per share, which together with the interim dividend makes a total for the year of 20.63 pence, an increase of 10 per cent on last year. Our cash generation remains strong and dividend cover is 1.7 times.
This has been a busy year for the Board not only in guiding Group strategy but also reviewing and confirming our commitment to the highest standards of governance. The Board has worked with external consultants to undertake an evaluation of its activities and effectiveness, has reviewed its internal processes surrounding communication with the market and has reviewed remuneration policy. While concluding our processes are robust and that the Board is operating effectively, certain changes and improvements to policy and presentation have been made. The Corporate Governance section of the 2012 annual report will contain further details.
Domino is a global business with operations in all regions of the world. We understand the importance of diversity within our workforce. Our extended senior management team comprises a broad mix of gender and nationality and in particular one third of the members of the executive management committee, the senior team below the main Board, are women. Changes were made to the terms of reference of the Nomination Committee of the Board during the year to include diversity and specifically gender as a key consideration in all future Board appointments.
Domino has a strong value system and in our corporate social responsibility report this year we outline how those values are positively influencing our customers, the communities in which we operate and society at large. This year for the first time we have included metrics recording our progress against carbon reduction targets alongside employee KPI's.
We leave 2012 as we entered it with a combination of uncertainty and instability in world economies. We remain cautious about market conditions and their impact on the investment plans of our customers. Against this backdrop we are optimistic about prospects for the future. We continue to invest in new products which are driving growth, our after market business is robust and we expect the investments we made during 2012 to contribute to growth in 2013 and beyond.
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