Solution Dynamics Limited (‘SDL'), on 10 March, finalised an agreement with Fuji Xerox New Zealand Limited (‘FXNZ') which sees SDL appointed as an accredited partner for the provision of all print and mailing services for FXNZ's Document Management Solutions (‘DMS') offering in New Zealand. Fuji Xerox has a well-developed Document Management Solutions (DMS) business internationally and has chosen SDL to act as its preferred provider of key portions of its DMS business in New Zealand including print imaging, mailing and certain print-related data services. Under the agreement SDL will install the latest Fuji Xerox high-speed, continuous digital imaging equipment and associated document handling equipment. SDL will extend its specialised print clean room to accommodate the larger equipment and an initial estimate suggests this will require capital expenditure of around $300,000. This cost is only an indication as the print room specification has yet to be finalised. Initial indications suggest SDL should see revenue growth of at least 5-10% in the first full 12 months of operation although this is a very preliminary view and it is unclear how quickly the revenue ramp will occur. While ongoing print costs are largely variable, some upfront costs will be incurred in the setup and it is not certain whether SDL will begin operations late in the second half of fiscal year 2015 or, more likely, in early fiscal year 2016.

The company provided earnings guidance for the fiscal year 2015. Until the finalization of contract is clarified, the company cautions that while it is maintaining current fiscal year 2015 pre-tax earnings guidance of over $700,000 there is now a higher degree of uncertainty around this forecast.