De La Rue results improves in H1
Wednesday, November 24, 2021
De La Rue has reported a “substantial improvement” in first half trading, with polymer production almost doubled on last year, and banknote printing capacity full for the rest of the year.
In the six months to 25 September the security and brand protection group posted sales on continuing operations down nearly 2% at £179.2m. Operating profit on continuing operations doubled to £13.8m, while adjusted operating profit excluding exceptional items was up 13.7% at £17.4m.
Adjusted sales at its Authentication wing were up 28.3% at £44.4m, while at its Currency operation adjusted sales rose 5.3% to £132.7m.
The results were complicated by restructuring, disposals, the effects of the PLC’s Turnaround Plan and the loss of the UK Passport contract in the prior period.
CEO Clive Vacher said the first half had involved substantial improvement in the group's financial and operational performance.
“We continue to make progress in executing our Turnaround Plan, which is delivering both operating improvements and cost reductions. These, coupled with our increasing market competitiveness, have resulted in stronger adjusted operating profit and excellent cashflows generated from operating activities.
“The results from our two ongoing divisions, Authentication and Currency, have more than offset the cessation of the UK Passport contract last financial year,” he stated.
Authentication is set to end the year with an annualised run rate of around £100m.
The group said it continued to monitor and work to “mitigate headwinds in commodity and energy costs, and challenges in the supply chain”.
This year De La Rue has announced plans to expand polymer manufacturing at its Westhoughton site, along with more than doubling the size of its Malta banknote facility.
Vacher said this would be achieved without exceeding the original total turnaround investment of £79.8m.
De La Rue’s share price slipped by just over 2% to 157.10p following the announcement (52 week high: 214.94p, low: 140.64p).