Shares in Cambridge ink jet printing giant, Domino Printing Sciences, took a hammering on early trading as investors took fright in an interim management statement that flagged up slowing sales and a clampdown on incremental costs.

Even Domino’s outstanding run of profitability over more than three decades didn’t save the share price from jittery marketmakers.

In many areas, Domino is doing very well. After 10 months results are in line with expectations for the year. An acquisition taking Domino into a lucrative new market is bedding in well and set to deliver revenues and sales of new equipment in Asia, Middle East, South America and parts of Europe remains good.

But the statement cautioned: “It is not yet clear whether the recent slowing in activity levels is a short term effect caused by current general negative economic sentiment, or is signalling a longer term slowdown in capital spend.

“We are restricting incremental costs until the situation becomes clearer.  The board remains confident about our competitive position and in the long term prospects for the group.”

The update relates to the period from May 1 to September 15. The group operates a financial year from November 1 to October 31.

Domino said that sales for the 10 months to the end of August were four per cent ahead of the corresponding period last year. At the half year sales growth was eight per cent; in the subsequent four months sales were one per cent below those of the corresponding months in the prior year. The impact of foreign currency movements was negligible, Domino said.

The company said that sales activity for new equipment in Asia, Middle East, South America and parts of Europe “remains good, with our overall strength in these regions positioning us well for continued development and growth.

“However, demand levels for new equipment in Western Europe and North America have been subdued, especially since the beginning of August, and are expected to remain so for the balance of the year.

“Sales of consumables and spares across the whole of the group continue to grow in line with the increase in size of the global installed base of equipment.

“Overall, we continue to be pleased with the progress and performance of our new and existing product ranges. Group headcount has grown by three per cent in the year to date, principally enhancing our selling capacity in Asia where we continue to see increasing activity levels and sales.”

Following the payment of a dividend, the group had net cash at the end of August of £17.3 million.

Domino said that the $50 million April deal securing a 15 per cent interest in TEN Media, a business set up to provide solutions to the egg industry, had progressed positively. “We expect the first financial returns from this business to start in the second quarter of our next financial year,” the company said.