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(Alliance News) - De La Rue PLC on Wednesday said its full-year revenue fell but its profit was pushed higher by one-off gains.
The banknote printer added that it is after more cash of its own, unveiling plans for a GBP100 million placing, with a portion of the proceeds going towards doubling its production of plastic notes, famously fashioned by the Bank of England.
In the year ended March 28, De La Rue's revenue dropped 17% to GBP466.8 million from GBP564.8 million. Pretax profit, however, rallied 42% to GBP36.1 million from GBP25.5 million.
Profit was helped by De La Rue swinging to a GBP20.0 million exceptional gain from last year's GBP27.9 million loss.
In the recently-ended year, De La Rue booked a GBP25.3 million gain on the sale of its International Identity Solutions unit, but incurred restructuring costs of GBP9.3 million. Among the costs a year ago was GBP18.1 million in expenses related to an expected credit loss provision in respect of a customer in Venezuela.
It paid no dividend, after a 25.0 pence payout in the year prior. Back in November De La Rue suspended its dividend.
In financial 2020, its Currency division struggled, with revenue there falling by 30% to GBP315.1 million.
"Overall, we saw a decline in banknote and security feature volumes and price, with good growth in polymer volumes," De La Rue.
It's the polymer side of banknote printing that De La Rue has identified as a chance for growth. It said it will invest GBP15 million from proceeds of the planned placing to "double the Currency division's capacity for polymer production".
Elsewhere, it expects to invest GBP35 million in its Authentication division and GBP16 million into its restructuring, the company unveiled a three-year turnaround plan back in February.
De La Rue will place 90.9 million shares at 110p each. The stock was 2.1% higher at 156.04p each in London on Wednesday morning.
Chief Executive Officer Clive Vacher said: "We are now well underway with our plans to turnaround the company, with opportunities to grow our revenue and reduce our cost base. Our cost-cutting initiatives will enable us to compete harder in the currency market, while the development of security features and polymer will drive growth for this division.
"Authentication and polymer continue to show strong growth and we see an increasing pipeline of new opportunities."
De La Rue also announced a "consultation process" at its banknote printing site in Gateshead, north east England.
"We will start to engage in a collective consultation process with impacted employees. Under the proposal, the company will retain some core services and roles at the site," De La Rue explained.
"Subject to the consultation process, we would expect the banknote printing operations to cease at Gateshead by the end of this calendar year. In addition, the UK Passport operations, also in Gateshead, will cease operations during the first half of financial 2021 as the contract transfers to a new supplier."
De La Rue back in 2018 famously lost a contract to produce the UK's post-Brexit passports.
The company added that Non-Executive Director Sabri Challah will step down "due to his other commitments".
De La Rue added: "Sabri will remain on the board until such time as a successor independent non-executive director has been appointed, but in any event until no later than the date of the company's forthcoming annual general meeting."
The company's annual report came in the wake of the UK's Serious Fraud Office deciding to end its investigation into the firm.
The investigation, now discontinued, was announced in July 2019 with the SFO at the time looking into possible corruption in South Sudan.
Basingstoke-headquartered De La Rue said it was "pleased that the SFO has closed its investigation and that the SFO is taking no further action in respect of this matter."
By Eric Cunha; ericcunha@alliancenews.com
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