De La Rue affected by disruption to deliveries within its foreign exchange activities
- De La Rue said sales fell to £145 million in the six months to September 28
- The group has agreed to sell its authentication business to Crane NXT for £300 million
Banknote printing company De La Rue reported lower turnover in the first half of the year after its currency activities were affected by the timing of deliveries.
The Hampshire-based group, whose clients include the Bank of England, said turnover fell 10.2 per cent to £145.1 million in the six months ended September 28.
Sales rose 4.4 percent to £50.2 million in its authentication business, which De La Rue has agreed to sell to industrial technology company Crane NXT for £300 million.
However, the foreign exchange division saw sales fall 16.3 per cent to £194.9 million as some deliveries shifted into the second half of the financial year.
Adjusted operating profit nevertheless beat expectations, falling 7.6 percent to £7.3 million, while lower exceptional charges more than helped halve pre-tax losses to £6.5 million.
Since then, De La Rue’s foreign exchange division has expanded its order book to a five-year high of £338m on the back of multiple contracts, including some polymer-based banknote transactions.
Weaker performance: Banknote printer De La Rue has reported lower turnover in the first half of the year
As a result, the company has reiterated its expectation that adjusted operating profit will reach the ‘mid to high £20m’ range this financial year.
Clive Vacher, CEO of De La Rue, said: “The material new orders we have secured in recent months will start to translate into higher sales as we move into the next financial year and will strongly support our growth expectations.
“With these solid foundations, our ongoing foreign exchange business is now well positioned to take full advantage of an improving market, with a substantial upward step change in activity in 2025 and beyond.”
De Le Rue plans to become a sole banknote design and printing company once it formalizes the sale of its authentication business, which is expected to happen in the first half of 2025.
The group plans to use the money from the sale to repay a large loan and reduce its pension plan liabilities.
Last year, De La Rue was allowed to defer payment of around £20 million in contributions to the pension deficit after warning that lower global demand for banknotes was creating serious uncertainty.
The company was founded just over 200 years ago and prints banknotes for more than half of the world’s central banks, such as the Bank of England.
Dan Coatsworth, investment analyst at AJ Bell, said: ‘There is significant pressure on the current management team to demonstrate that the business still has life in it, despite the structural headwinds it faces.
“At the very least, the authentication sale will provide the company with a useful cash injection and some breathing space.”
De La Rue shares fell 5 per cent to 104p on Thursday morning, although they are still up around 42 per cent in the past year.
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