(Alliance News) - De La Rue PLC on Tuesday announced the details of its three-year turnaround plan and reiterated its annual guidance.
The stock was 18% higher in London in morning trade at 143.60 pence a share.
The Basingstoke-headquartered banknotes and passports printer said trading during the second half of its current financial year for both divisions - Currency and Authentication - has been "satisfactory".
Therefore, De La Rue reconfirmed its current guidance for adjusted operating profit of between GBP20 million and GBP25 million for the year to the end of March. In its financial 2019, De La Rue reported adjusted operating profit of GBP60.1 million.
Turning to the turnaround plan, De La Rue said it plans to return its Currency unit to "progressive" margin growth from financial 2021, helped by cost reductions, and investment in polymer and related features.
The company highlighted that demand for currency continues to grow worldwide and it aims to maintain its "number one" position in the commercial currency print marketplace, while taking advantage of shifts in the market.
Elsewhere, De La Rue said it is targeting continued strong year-on-year growth of its Authentication business, driven by further, largely project-related, investment.
"The plan drives extensive cost reduction and, in parallel, offers a substantial investment opportunity for growth," explained Chief Executive Clive Vacher.
"I am confident that this is the right plan for De La Rue," continued Vacher. "There is a considerable amount of work to be done, and the company has a single, focused plan, a fully aligned leadership team, and a greatly enhanced structure. We are ready to execute."
De La Rue is scheduled to report its annual results on May 27.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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De La Rue (DLAR)