- The Hampshire-based company's clients include the Bank of England
- De La Rue's currency order book has more than doubled since September
- Operating losses in the first half fell by almost three-quarters to £3.4 million
De La Rue's currency division is experiencing a strong recovery after several new contracts and huge demand for banknotes.
The Hampshire-based company, which counts the Bank of England among its clients, has struggled in recent years as demand for its paper money plummeted to the lowest level in two decades.
But since the group said its foreign exchange order book has more than doubled from £105.8m to £219.8m since the end of September, thanks to “several significant orders”, De La Rue said.
Order strength: Banknote printer De La Rue revealed its currency order book has more than doubled since September from £105.8 million to £219.8 million
Physical cash use among Brits has rebounded in 2023 after being hit by the Covid-19 pandemic, accelerating the transition to contactless payments.
De la Rue also said his authentication business has secured a three-year contract extension and is in the late stages of agreeing a new deal, bringing it closer to achieving £100 million in revenues this year, as forecast.
But the London-listed company saw total sales fall 1.7 percent to £161.5 million in the six months ended September.
Sales were affected by the closure of its Kenyan operations, the loss of an HM Revenue & Customs contract and weaker demand for polymer, which is now widely used to make banknotes.
Yet the group's adjusted operating profit was £7.9m, rather than breakeven as forecast.
Meanwhile, operating losses fell by almost three-quarters to £3.4 million due to costs incurred last year related to the end of a supply agreement with Portals Paper.
De La Rue bosses reiterated their annual forecast for adjusted operating profits to be in the 'low range of £20 million' and net debt in the 'mid range of £90 million'.
Meanwhile, De La Rue's lenders have agreed to extend bank facilities until July 2025 and reduce the limit on the company's revolving credit facility by £15m to £235m.
Clive Vacher, CEO of De La Rue, said the “robust performance in the first half reflects the important actions we have taken since 2020 to make the business resilient to changing market conditions.”
He added: “These actions have enabled us to weather a downturn over the past 18 months, especially in the currency space, and I am pleased that the market is now showing signs of continued recovery.”
De La Rue shares were down 6.2 per cent at 76p on Tuesday morning, making them one of the five worst performers on the FTSE All-Share Index.
The group's share price has fallen by around 80 percent over the past five years, amid a structural decline in the popularity of paper money.
Mark Crouch, analyst at eToro, warned: 'Looking further ahead, De La Rue must find alternative revenue sources to offset declining cash usage.
“Today, many people rarely use cash, a trend that is likely to become even more widespread in the future.”