Last checked at 23 Oct 2013 07:00
TRADING UPDATE
De La Rue plc (DLAR.L/DLAR.LN) is today updating the market on trading for the six months to 28 September 2013 and its outlook for the remainder of the current financial year.
The Group's performance in the first half of the current financial year was in line with expectations with Group operating profits estimated to be c£39m, up 18% on the six months to 29 September 2012, on marginally lower revenues. This improvement, despite more challenging trading conditions, reflects the good progress made on the ongoing cost reduction programme which is on track to meet the targets for the year.
Within the Currency division, banknote print volumes in the first half were down 10% at 2.6bn notes while banknote paper volumes increased by 4% to 4,700 tonnes notwithstanding the challenging market. The continuing overcapacity in the banknote paper market has led to a worsening pricing environment in the printed banknote market with recently confirmed orders, for delivery in the second half of 2013/14 and in the 2014/15 financial year, reflecting this pricing pressure.
The Solutions division overall has traded well with the Identity Systems business delivering a strong performance. In the Cash Processing Solutions (CPS) business the decline in the trading results seen in the second half of 2012/13 has continued into the first half of 2013/14 and as a result this business will report an operating loss in the first half. Management action to reduce costs further has commenced, but it is expected that CPS will report a loss for the full year, with a target of achieving break even in 2014/15.
The Group's 12 month order book at 28 September 2013 was £232m up £25m since the start of the year.
In light of the more difficult trading conditions in the Currency division and the CPS business, the Board considers it appropriate to guide that operating profits for the Group for 2013/14 (before IAS19 adjustments) will be c£90m. Although this is an increase of over 40% on the previous financial year it is below the three year Improvement Plan target which was to raise operating profit from £40m in 2010/11 to £100m by 2013/14.
The Board is pleased with the level of order intake in the Currency division but anticipates that the pricing environment in the second half of 2013/14 will continue throughout 2014/15.
De La Rue will announce its interim results on 26 November 2013.
-ends-
23 October 2013
For enquiries, please contact:
De La Rue plc | +44 (0)1256 605000 | |
Tim Cobbold | Chief Executive | |
Colin Child | Group Finance Director | |
Rob Hutchison | Group Director of Communications |
|
Brunswick | +44 (0)207 404 5959 | |
Jon Coles | ||
Oliver Hughes |
Notes to Editors
As the world's largest integrated commercial banknote printer, De La Rue is a trusted partner of governments, central banks, issuing authorities and commercial organisations around the world.
The Group has in recent years been involved in the design or production of over 150 national currencies. De La Rue also produces a wide range of security documents including passports, driving licences, authentication labels and tax stamps. In addition, the Group manufactures sophisticated, high speed cash sorting and inspection equipment.
De La Rue also offers a range of specialist services and software solutions including government identity schemes, product authentication systems and cash management processing solutions.
De La Rue employs approximately 4,000 people worldwide and is listed on the London Stock Exchange. For further information visit De La Rue's website at www.delarue.com