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The Company expects full year adjusted operating profits to be in line with market expectations ( 1) . Net debt is expected to be slightly better than the market expectations of £75 million.
Up we go:
"Quickly reducing debt", Ant1986?
Thinking a bit about the takeover prospect here and it does stole me that it's possible. Not sure why ii's are stepping up their holdings at present and there was more big buying this week.
I wonder if it will happen before trading update or before full year results.
10x earnings is a very modest valuation at present and would expect 12-14 for any half decent listed company like this appears.
So I believe undervalued and ripe for a takeover, either of which should add 30-40% from 107p.
i think in two weeks time
Someone bought/sold nearly 3m shares on Tuesday - are we not overdue an update on holdings?
Given contract win, lower pension fund contribution and new holdings, I'd expect a better reaction this time. Back to 130-140p. Very beaten up last time for a profitable company with quickly reducing debt.
Even cheaper today. Bargain! Added.
PER = 8.1
PEG = 0.6
FORECAST EPS GROWTH = 16%
ROCE = 11%
The pension contributions are reducing.
Schroder's now holding 15%.; Wellcome Trust on 4%.
Recent (24 Jan) update disappointed, with operating profit failing to meet expectations by 15%, but the company remains profitable with limited debt.
You can now buy at less than the fundraising price of 110p of July 2020.
Seems cheap to me.
Was spot on and the pension fund contributions are reducing substantially .
Traditionally printers offered low initial prices to get in long term customers. That no longer works, I'm afraid. But we are still making a (reduced) profit here; and there are funds in the bank. We should chug along merrily for the next couple of years. A takeover looks a remote prospect to me, if the company is tied in to too much low margin work, and has as yet failed to make a great deal of headway in authentication.
Would someone tell the sp??
Good news this. Steady recovery to sp
Low balling price (Crystal Amber implication) is not a sustainable business model. I guess most of us are holding onto DLAR for a future company sale, rather than the leadership team leading us to great returns. Of course CA need to fan the flames of takeover expectations. The concern is DLAR sell way in advance of production (to fill capacity) so those low, low customer prices/margins are locked in for sometime. Time for folks to get a grip - earnings call should be interesting.
last week i predicted back to 120p and now DLAR is 122p ,not bad
totally agree this must be a sitting duck...happy to keep building position here before the main event!
...from an RNS published this morning.
"During the quarter, De La Rue published its unaudited interim results for the six months to 30 September 2021. Adjusted operating profits rose by 166 per cent. to £17 million. Positive operating cash flow was £25.8 million and the outlook for the full year was described as being in line with the board's expectations. Nevertheless, earlier this week, De La Rue released a trading update stating that as a result of headwinds relating to the Covid-19 pandemic, including employee absences at global manufacturing facilities and supply chain shortages, operating profits are now expected to be flat on the previous year at between £36 million and £40 million, as against previous market expectations of between £45 million and £47 million.
Prior to the trading update, the Fund had been in dialogue with De La Rue's Chief Executive and Chairman regarding gross margins. The Fund conveyed its view to De La Rue that its pricing has been wrongly focused on capacity utilisation rather than on gross profit and contribution to fixed overhead maximisation. Prior to the trading update, operating margins at De La Rue's Currency division were forecast at 8.4 per cent. Following the trading update, the operating margin is forecast at 6.2 per cent. In 2010, De La Rue achieved operating margins of 23.2 per cent. Currency demand from central banks has been buoyant and the Fund believes that De La Rue could have secured higher gross margins.
De La Rue is the global leader in currency with a market share of 30 per cent. Whilst De La Rue's supply chain headwinds are outside of its control, the Fund believes that much of the £36 million per annum of cost savings have effectively been utilised to subsidise customers. Had gross margins on its Currency division's revenues of close to £300 million, been three per cent higher, operating profits would have been £9 million higher.
In July 2020, De La Rue completed a £100 million fundraise which was priced at 110p a share. Over the last eighteen months, the business has been transformed, yet following the profit warning in this week's trading update, the share price has returned to 110p. Furthermore, businesses with similar pension profiles are now benefiting from rising interest rates expectations. The Fund believes that in the coming year, at De La Rue, this should result in a material reduction in future pension contributions and accordingly increase free cash flows.
Shares in De La Rue now trade on 9.7 times revised earnings per share to March 2022 and on 8 times to March 2023. The Fund believes that following the Covid-19 pandemic, the industry requires consolidation. Given its current rating, the Fund believes it is highly likely that in the coming months, De La Rue will be the subject of a takeover bid from one or more of its overseas competitors. The Fund believes that this will be the inevitable outcome of management prioritising 100 per cent capacity utilisation rather than cash gross margin maximisation."
Taverham - No selling from me today. So Dlar might have escaped me.
Consolidation overdue in this shrinking market. DLAR now very vulnerable
Always liked this but sold out some time ago when it went over 180p. Bought some back today at 108p and will add more on more weakness down to possible 90p lows
Indicates to me the mkts are overpriced. These issues....staff sickness and problems getting materials...must be everywhere.
I'd wait until the Crane currency 4th quarter earnings call tomorrow. They have banknote printing facilities in Malta just like De La Rue. So let's see if they are experiencing the same "macro" problems. Or if they have taken market share from De La Rue. Craneco.com.
Schwee, however on further review - I may have overlooked the capital raise which doubled the shares in issue - so could be out by a factor of 2 ! oops - now hoping for a takeover!
Schwee, y/e mar 20 , operating profit £42m eps 27 p - similar to this years final numbers I hope.
Taverham , DLAR could be 120p by end of the week, 10% a week not bad return,
i bet directors are lining up to buy as well, nice
Not sure where a p/e of 4 came from. Just doubling the half year eps of 4.9p would give a number nearer to 11.
Because of its name somebody might have a go for DLAR as its pension deficit is minimal, and cash will always be king, more so now that inflation is ripping through the world economy.