In a new report, CAP says the recent financial performance of Heidelbergs digital division has led to a wave of speculation over its future, resulting in "fear, uncertainty and doubt".

In the first quarter of this financial year, Heidelbergs digital division accounted for 7% of revenue, but its 7.7m (e11.74m) loss was 19% of the companys total loss.

However, CAP believes Heidelberg has no intention of pulling the plug on digital, and that its value would be damaged if it were to exit digital because of the predicted erosion of litho by the new technology.

The report says: "To discard digital solutions would strategically move Heidelberg away from a plan of being a complete solutions provider to the graphic arts industry. We see no evidence that the companys current management team would choose to take such actions."

CAP advises Heidelberg to provide additional sales channels for its joint venture with Kodak, NexPress, and for it to expand its colour product line. It also believes that Heidelberg should provide lower-cost versions of its digital products, mimicking its strategy with the Speedmaster and the lower-spec Printmaster range.

At Kodaks investor meeting last week it hinted that a lower-specification NexPress was being considered for development.

A Heidelberg spokesman said it had never wavered from its commitment to digital and that speculation about its future had been just that.

o The NexPress 2100 has become the first digital press to be approved and licensed by Pantone.

Story by John Davies