Domino falls as customers defer machinery purchases

Shares in Domino Printing, the food label printer, were looking past their sell-by date after the company revealed a slump in sales.

The group has continued to experience a slowdown in the rate of order conversion on capital equipment projects during the first four months of its new financial year, which started in November.

This resulted in extended sales cycles and deferrals in decision making as customers remain cautious about investment commitments.

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Total sales revenues for the first four months of the year were six per cent below the corresponding period last year.

In a statement the firm 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."

There is still strong interest in the firm's products but there is a notable lack of confidence in Europe and a slower start to the year was seen in China, where the level of larger projects, which have driven growth in the past, is running below that of last year.

The company's new product range is continuing to perform well, while its US partner Ten Media has made positive progress during the period. Net cash at the end of February 2012 was £25.3m.

The share price fell 13.64% to 573.00p.

NR