i'm buying on the blips

StockMarketWire.com
De La Rue reports a solid first half performance underpinned by strong order book and good strategic progress.

Group revenue was flat at £189.5m (H1 2015/16: £188.7m) in the first half. Underlying operating profit was up 2% at £24.0m (H1 2015/16: £23.6m).

Underlying profit before tax increased by 3% to £18.2m (H1 2015/16: £17.6m) and underlying earnings per share was 4% lower at 14.0p (H1 2015/16: 14.6p). Exceptional net charges in the period were £1.0m (H1 2015/16: exceptional net gains of £7.5m), consisting of £1.6m site relocation and restructuring costs which were offset by £0.5m income relating to release of warranty provisions and a £0.1m gain from a land sale.

This resulted in profit before tax of £17.2m (H1 2015/16: £25.1m), down 31% year-on-year.

Underlying operating cash flow, comprising underlying operating profit adjusted for depreciation and the movement in working capital, was £25.0m (H1 2015/16: £61.1m). Net debt at 24 September 2016 was £115.5m up £9.4m since the year end mainly due to an adverse working capital movement. Inventory increased in preparation for sales in the second half of the year.

An interim dividend of 8.3p has been declared for the half year ended 24 September 2016 (H1 2015/16: 8.3p), payable on 11 January 2017 to shareholders on the register on 9 December 2016.

Chief executive Martin Sutherland said: "De La Rue's half year results are in line with our expectations. The Currency business has shown strength and resilience despite the impact from the conclusion of a material contract last year. Both Banknote Print and Banknote Paper have performed well with increased volumes.

"De La Rue continues to make good progress against our 2020 strategic plan. We have further strengthened our position in the fast growing East Africa region through the agreement to form a joint venture with the Government of Kenya. I am also pleased with the progress in Polymer where we have secured a second volume customer. We now supply polymer substrate to 15 issuing authorities, representing c40% of total polymer customers. Although the contribution to the Group from Polymer is still small, we are optimistic about its potential growth in the coming years.

"In non Currency businesses, we have secured two multi-year Identity Solutions contracts and gained early traction in the enterprise market for Product Authentication and Traceability.

"While we expect little impact in the current financial year, as a major UK-based exporter with more than 80% of our revenue from outside the UK, we believe that we would benefit from a sustained weakness of Sterling. We are also encouraged by our 12 month closing order book of £409m and the early strategic momentum in the key future growth areas. We remain confident of the business' outlook for the rest of the year and beyond."

Ex-divi today (8.3p)

StockMarketWire.com
Banknote printer De La Rue expects full year underlying operating profit to be above the top end of the market consensus.

The group said this outperformance had been driven by good growth in Identity Systems and Product Authentication & Traceability product lines.

It said the currency business had performed in line with market expectations.

It also said that full year revenue for the group was in line with market forecasts.

JP Morgan Cazenove today reaffirms its neutral investment rating on De La Rue PLC (LON:DLAR) and raised its price target to 700p (from 670p)

StockMarketWire.com
De La Rue has been awarded a 10-year contract by the Bank of England to supply the base material for its new polymer £20 notes.

De La Rue already has the contract to design and print the notes, which will be issued in 2020.

Under the terms of the contract, De La Rue will supply the Bank of England its Safeguard polymer substrate for 25% of the first call-off volume.

De La Rue said that based on estimated timings, production for this contract was expected to commence in the financial year of FY18-19.

StockMarketWire.com
De La Rue's revenues rose by 29% to £244.7m in the six months to the end of September.

Adjusted operating profits rose by 11% to £26.6m and reported operating profits were up 7% at £24.6m.

The dividend of 8.3p per sharee is unchanged from last time.

Chief executive Martin Sutherland said: 'De La Rue has performed well in the first half, driven by strong growth in the Currency business and we have continued to make good progress against our strategic plan.

'Polymer has reached a significant milestone with the award of a 10 year contract to supply our polymer substrate Safeguard for the Bank of England's new £20 note.

'DLR Analytics, our cash cycle management software launched in May this year, has gained more traction.

'More than 60 central banks have now signed up to the pilot programme, further strengthening De La Rue's position in the industry.

'R&D investment has increased by 33% in the first half as we continue to invest in new products and capabilities. Product Authentication grew by 20%, driven by De La Rue Authentication Solutions which is performing to plan.

'The strong revenue growth in the first half, driven by high volumes of lower margin Banknote Paper and Print orders, reflects the lumpy nature of contracts.

'Performance in the second half is expected to be broadly in line with the same period last year.

'Overall, our outlook for the year remains unchanged.'

The group also announced that the pension trustee had decided to change indexation of future increases from RPI to CPI for its UK defined benefit pension scheme, effective from April 2018. The group said this change was expected to reduce the scheme's liabilities and corresponding deficit by c£70m on an accounting basis, which would be reflected in the 2017/18 full year financial accounts. The scheme has been closed to new members since 2010 and to future accrual since 2013.

De La Rue secures strategic relationship for its paper business
1 February 2018
· Significant milestone in delivering our strategy to transform De La Rue into a less capital intensive, technology-led product and service provider

· Strengthens De La Rue's balance sheet and enables further investment in innovative technology solutions for the currency, identity and brand protection markets

· Secures long term paper supply for De La Rue's print requirements with a ten year supply contract

· Limits De La Rue's exposure to the external paper market

De La Rue plc ("De La Rue" or the "Group"), the world's leading security and anti-counterfeiting provider for banknotes and personal identity, today announces that it has entered into a strategic agreement with Epiris Fund II ("Epiris") for the Group's paper business, comprising the Overton paper mill and the Bathford paper mill, and to be named Portals De La Rue Limited ("Portals De La Rue").

Under the terms of the agreement, Epiris, together with management, will acquire a 90% shareholding in Portals De La Rue through a newly formed company WhickerCo Limited, for a cash consideration of c£61m payable upon completion. This equates to an enterprise value of £68m and a multiple of 12.8x average adjusted EBIT 2015-18. De La Rue will retain the remaining 10% interest.

StockMarketWire.com
De La Rue said Thursday it missed out on the contract to print the UK's new post-Brexit blue passports but insisted that this would not have an impact on the performance of the current and next financial year.

The current 10-year contract with Her Majesty's Passport Office (HMPO) - due to expire in July 2019 - had a total value of roughly £400m.

'The company is disappointed with the outcome of the tender process and will now consider its options including an appeal,' De la Rue said.

That was not the desired result, so do as the EU do and resubmit the tender process stipulating that all persons involved in the passport printing, storage and transport must be UK citizens with full security clearance. I was going to add must also read and speak english fluently but that might disbar many at D L R, so we'll skip that bit.

you'll find nearly all dutch speak fluent english, and why should we get protectionist while complaining about trump?

A fluent english requirement would give an unfair advantage to the dutch, after all who outside Holland bothers learning dutch? My comment was intended to be tongue in cheek. I am less worried about who is printing the passports than who is dishing them out.

StockMarketWire.com
De La Rue said Wednesday adjusted operating profit fell 11% in the year to the end of March as the loss of revenue from its exited paper business, increased investment spend and costs associated with its failure to win the contract to print out the new blue UK passports weighed.

Adjusted operating profit fell 11% to £62.8m, while group revenue rose 7% to £493.9m. Excluding the exited paper business, group revenue was up 4% to £426.4m and adjusted operating profit was up 7% to £56.9m.

'Solid growth in all segments has been offset by strategically focused increases in investment in R&D and sales, which will drive long term sustainable growth,' the company said.

Higher volumes in both banknote print and paper were the main drivers for a growth of currency revenue of 2%, excluding the exited paper business.

The identity solution segment generated 4% revenue, while product authentication & traceability revenue jumped 31%.

Adjusted earnings per share fell 9% to 42.9p, while reported earnings per share rose 99% to 93.7p.

The cash proceeds from the sale of its paper business of £60.3m reduced net debt to £49.9m from £120.9m the previous year.

The group 12 month order book at March 2018 excluding paper orders rose 6% to £363m, compared to the previous year.

A final dividend of 16.7p per share was recommended, unchanged from the previous year.

'The sale of the paper business and the associated long term paper supply agreement have reduced our exposure to the volatility of the oversupplied paper market, while securing the surety of supply for our print business,' said Martin Sutherland, Chief Executive Officer of De La Rue.

'Through this, and good cash generation from the business, we have significantly strengthened our balance sheet with net debt now at its lowest in five years. The stronger balance sheet provides the Group with greater flexibility to allocate capital to deliver long term shareholder value.'

StockMarketWire.com
De La Rue said Tuesday it was confident of meeting its expectation for the full year despite reporting first-half profits fell sharply, as the loss of revenue from its exited paper business continued to stifle performance.

For the six months ended 30 September, reported operating profit fell 59% to £10.1m and revenue rose 5% to £257.6m.

Excluding the impact of the exited paper business, group revenue was up 9% to £242m and adjusted operating profit was down 31% to £17m.

Net debt of £94.3m was above expectations, which the company blamed on timing of deliveries in the half year.

Following a strategic revenue review, the company said it would 'refocus our identity business on the supply of higher margin security features and components.'

The company proposed to leave the dividend unchanged, recommending an interim dividend of 8.3p a share. 'We continue to make progress in delivering against our strategic plan to transform the Group into a less capital intensive, more technology led business,' said Martin Sutherland, Chief Executive Officer of De La Rue.

'Over the last six months we have conducted a thorough review of our strategy and market positions. In the light of the UK passport decision, we have concluded that we will refocus our identity business on the supply of higher margin security features and components.' 'We believe we can continue to drive cost efficiencies across the Group and achieve growth in Security Features, Polymer and PA&T. We expect our PA&T business to double in size within the next three years.' 'We maintain a strong order book and pipeline which provides good visibility for the second half of this year and into next year. With good revenue coverage from the Group's 12 month order book of £365m and based on the orders planned for production and shipment in the second half, we are confident that we will meet our expectations for the full year.'