Brother abandons Roland Acquisition

Brother has released its full year figures for the last financial year ending 31 March, showing a large ¥28.2 billion impairment loss for its British Domino subsidiary alongside an announcement that the company has given up on its earlier hostile bid for Roland DG.

Brother has been working with Roland DG to develop a range of wide format latex printers as part of its planned expansion of its inkjet line-up. So when Roland DG announced that it was planning a management buyout via a private equity company called XYZ, Brother stepped in with an offer of ¥5200 per share to acquire the company in order to have complete control over this aspect of its inkjet portfolio. XYZ responded by raising its offer to ¥5370 per share but Brother has declined to increase its bid. 

Brother went on to accuse Roland DG of “insincere conduct” and of going against the spirit of the Guidelines for Corporate Takeovers published by the Ministry of Economy, Trade and Industry. This requires the management to consider the corporate value as well as the price offered. However, Roland has denied the accusations and stated that it disagrees with Brother over the synergies that could be achieved between the two companies together, claiming instead there would be dis-synergies because of friction with Roland’s main printhead supplier, which it refers to as Major Supplier A, but which is presumably Epson (which is a direct competitor to Brother in the DtG market). 

Brother refutes this, arguing that there is “a gap in logic in the argument for dis-synergies occurring” and pointed out that other companies it has acquired have continued to work with their suppliers. Brother concluded that in its judgement “the establishment of a relationship of trust with the management of [Roland DG] cannot be expected, which would be indispensable to the maximum enhancement of the corporate value of [Roland DG]”.

It’s not clear where this leaves Brother’s W-series latex wide format printers, which were developed with Roland DG. But it is hard to imagine the two companies continuing to work together when both have so publicly accused the other of being less than transparent in their dealings together. 

This WF1-L640 latex printer is Brother’s first entry into the wide format market.

Meanwhile, Brother has also released the figures for the last financial year, which show a very slight 0.9 percent rise in revenues, from ¥815,269 million in 2022 to ¥822,930 million, just above the ¥820,000 million the company had forecast. The business segment profit, which is essentially revenue minus the cost of sales, general and administrative expenses, improved by 25 percent, from ¥60,404 million to ¥75,579 million. Brother says this is due to lower logistics costs, higher consumables sales and price adjustments in the P&S Printing and Solutions business, which mainly covers small label printers.

However, the operating profit fell 10.1 percent from ¥55,378 million to ¥49,792 million, while the profit for the year, after taxes, fell a whopping 19 percent from ¥39,086 million to ¥31,662 million. Not surprisingly the basic earnings per share dropped from ¥152.67 to ¥123.81.

Brother attributes this huge disparity to an impairment loss of ¥28.2 billion in Q4 for its Domino inkjet business, headquartered in Cambridge, UK. This follows Brother running an impairment test for goodwill in the Domino business in accordance with International Financial Reporting Standards. Brother says that this has been caused by differences in the currency rates between the British Pound and Japanese Yen coupled with rising interest rates compounded by slower-than-expected growth in the digital printing equipment market. 

However, it’s worth noting that Brother also recorded an impairment loss of ¥10.6 billion for goodwill in the Domino business in the fourth quarter of the previous year. 

Looking at the breakdown in the figures by business segment shows that Domino recorded a slight increase in sales revenue, from ¥1008 million to ¥1096 million, coupled with a slight drop in business profit (revenue minus selling and general admin expenses, or SG&A), down from ¥56 million to ¥51 million. But the operating profit for 2022 was a loss of ¥58 million which has deepened to a ¥241 million loss for 2023. Brother reports that hardware sales declined due to softening demand for capital investment but that consumables sales held firm. The report states: “Business segment profit decreased due to increased SG&A costs, etc. resulting from reinforcement of sales activities and updating of backbone business systems.”

Domino’s N730i label press uses Brother printheads.

In contrast, the Printing and Solutions business saw sales revenue rise year on year from ¥4967 million to ¥5149 million with operating profit up from ¥365 million to ¥610 million. Brother notes that sales of hardware decreased due to sluggish market conditions mainly in China, the U.S. and Europe, but sales of consumables were firm. The report adds: “Profit increased substantially due to lower logistics costs, an increase in gross profit resulting from sales of consumables for communications and printing equipment, and positive price adjustment effects, despite higher sales promotion and SG&A costs.”

However, the Machinery business, which covers machine tools, industrial sewing machines and garment printers, also had a disappointing year, with revenues falling from ¥964 million to ¥774 million, and operating profit dropping from ¥98 million to ¥23 million. Here Brother says that it has seen a sharp drop in capital investment in China and Asia for machine tools, as well as falling demand for sewing machines in Asia but with rising demand for garment printers in the Americas. 

Looking ahead to this current year, which will end 31 March 2025, Brother is forecasting a 6.9 percent growth in revenue to ¥880 billion with profit before tax of ¥88 billion with an enormous jump in the earnings per share to ¥246.48. Brother is mainly counting on improvements to its Machinery business as the negative impact of the pandemic and the supply chain crisis start to recede. Brother states that both logistics costs, particularly around sea freight, and the costs of parts and materials are starting to fall. However, labour costs are rising due to inflation, and that sales promotion costs are also going up. The company is also betting on improved sales revenue and operating profit from Domino which would presumably require a considerable change in the exchange rates between the £GBP and ¥JPN. In any case, we should get some indication in Brother’s Q1 figures later this summer.

Brother also included an update on its Vision 2030 project to expand its portfolio into new areas including industrial inkjet. This involves a considerable investment in new factory buildings, including a new inkjet manufacturing plant in Hoshizaki in Japan and a new machine tool factory in India. This is part of a restructuring of manufacturing capability of its inkjet production base to concentrate its efforts in Japan on advanced systems, producing core inkjet parts for both consumer and industrial products as well as integrating prototyping and production systems for industrial printing products. It’s not clear where that would leave Domino in the UK. This plan envisages its European and US factories concentrating on recycling both consumables and hardware to produce items for local use, while Brother plans to transform its Asian factories into multi-function cost-efficient production centres for inkjet, laser and labelling products.

Brother also plans a considerable expansion of its inkjet portfolio though there’s no new information on what this involves or if its rethinking how to approach the large format print market. However, it has set aside ¥30 billion for strategic investments, including mergers and acquisitions.

You can find further information from



, , ,


Syndicate content

You can license the articles from Printing and Manufacturing Journal to reproduce in other publications. I generally charge around £150 per article but I’m open to discussing this for each title, particularly for publishers that want to use multiple stories. I can provide high res versions of images for print publications.

I’m used to working with overseas publishers and am registered for VAT with the UK’s HMRC tax authority but obviously won’t charge VAT to companies outside the UK. You can find further details and a licensing form from this page, or just contact me directly here.

Support this site

If you find the stories here useful then please consider making a donation to help fund Printing and Manufacturing Journal, either as a one-off or a repeat payment. Journalism is only really useful if it’s truly independent and this is the only such news source serving the print/ manufacturing sectors.

However, there are costs involved in travelling to cover events, as well as maintaining this site, not to mention the time that it takes to carry out research, check facts and interview people. So if you value this work, then please help to maintain it and keep it free to read.


Never miss a story – subscribe to Printing and Manufacturing Journal to receive an email notification every time an article is published here. It’s completely free of charge and you can cancel the subscription at any point without any hassle. There’s no need to provide any information other than an email address and subscribers details are not for sale so there’s no risk of any further marketing spam.

Related stories


Leave a Reply

Your email address will not be published. Required fields are marked *