De La Rue could benefit from September's terrorist attacks as countries step up their security.

"Even before 11 September we were seeing the US and others putting pressure on certain countries to improve their ID documents," explained chief executive Ian Much.

"It's going to mean an upgrade of the whole market, and there are not many companies that can do it - low-tech passport book suppliers will be squeezed."

De La Rue has supplied ID systems to 50 countries, and Much cited Mexico as an example of the level of sophistication now required.

De La Rue has produced passports for the state that combine a digitally printed digital photograph, two fingerprints and encapsulation with a two-dimensional barcode.

Workers at the Gateshead print plant were praised for a "terrific job" on the production of euro notes for the European Central Bank.

"It's a very difficult note with a lot of features and very tight tolerances. It's taken some European print works nine months to get it right, we did it in four," said Much. "We have demonstrated our qualities as a supplier and enhanced our reputation within Europe."

The cash systems division was the star of the group's interim results, and was described as "really motoring", with sales up 23% and margins increasing from 3.2% to 9.5%. Group sales on continuing operations (and including 20.9m from acquisitions) rose 20.3% to 294.4m, while operating profits before goodwill and reorganisation costs increased by 7% to 29.8m.

However, the Global Services division formed earlier this year to focus on brand protection, identity and payment systems has yet to deliver and posted a 2.7m loss, partly due to a disappointing performance by De La Rue Holographics.

Story by Jo Francis