Israeli printing control firm AVT sees profit up 20 pct annually

Wed Jan 30, 2013 6:59am EST

* Earnings up 10-20 pct annually in next few years

* Sees 20 pct of business from digital printing in 5 years

* Integrating its technology on HP digital presses

By Tova Cohen

HOD HASHARON, Israel, Jan 30 (Reuters) - Israel's Advanced Vision Technology (AVT) sees earnings rising up to 20 percent annually in the coming years as label and packaging printers increasingly turn to its quality control systems to cut waste and production costs.

AVT, whose optical inspection systems replace the human eye in inspecting packaging and labels, said sales are expected to grow up to 15 percent in the next few years, excluding any acquisitions. AVT is the industry leader, with a 40 percent share of the labels and packaging inspection market.

Its competitors in packaging include Isra Vision, BST and Eltromat, of Germany, while in labels it competes with BST and PC Industries of the United States, among others.

"We dramatically decrease or void completely waste that would have been created, or worse, that wouldn't have been noticed and gone to the customer," its chief executive, Shlomo Amir, told Reuters in an interview. "This dramatically decreases production costs."

Before these systems were available, a typical printing press would waste 15 percent of its production. AVT's systems can cut this to below 5 percent.

The majority of its customers are printers in the label and packaging industry, although 10-15 percent of its clients are printing press manufacturers, a business that is growing slowly but steadily for AVT.

A small but growing market for AVT is digital printing. It is a partner of HP's Indigo division and is integrating its technology on HP Indigo's presses.

HP Indigo has 70 percent of the digital press market for labels and Amir expects the U.S. printing company to retain its market leadership.

"The ability to provide real time feedback and correction on a digital press is greater than on a conventional one," Amir said, noting digital presses have recently started to enter the labels market and will soon penetrate packaging.

While digital printing accounts for only a fraction of AVT's business, Amir expects it to reach 20 percent in five years.

AVT, whose shares trade in Frankfurt, had revenue of $35.4 million and net profit of $2.9 million in the first nine months of 2012. It has forecast full year revenue of $49-$50 million and earnings of $4-$4.5 million.