Today (5 March) De La Rue provided a trading update for the financial year ending 29 March, and also for FY2026.
The group said that work to separate its Authentication division was “well advanced” and the £300m sale to Crane NXT was expected to complete in the first half of this calendar year.
De La Rue’s other business unit, Currency, “continues to see strong order intake”, with its order books swelled to £347m at the end of January.
The unit had sales of £207m in the 2023-24 financial year.
“We now expect growth for the Currency division in FY26 to be significantly higher than that guided at the time of announcement of our half year results,” the group stated.
Net debt is up, “as expected” as De La Rue builds up working capital to work through its order book and accrue cash costs of separating Authentication.
It said when the Authentication sale completes the group’s £235m revolving credit facility will be repaid in full, ahead of its maturity on 1 July.
De La Rue CEO Clive Vacher commented: “The Currency division is now benefitting from the success we have had in transforming the business over the last five years with a substantial upward increase in activity predicted by the growing order book.
“With sales for FY26 now largely contracted and the proposed sale of Authentication proceeding as planned, we will be able to focus on delivering finished banknotes, polymer and security features to our Currency customers efficiently and effectively.”
He said he expected a significant escalation in the performance of the Currency business in the coming financial year.
De La Rue continues to be in discussions that may or may not result in possible cash offers for the company and with “various potential counterparties” in relation to the Currency division.
De La Rue had sales of £310m and employed 1,600 at the March 2024 year end.
The Authentication business had sales of just under £103m and employed around 450 staff. The division made an adjusted operating profit of £14.6m and had gross assets of £83.3m.
De La Rue's Currency wing prints banknotes for half of all central banks worldwide, and also has a contract with the Bank of England to operate its printing facility in Debden. It took over the operation of the BoE printworks in April 2015. That arrangement was originally set to expire this year, but in 2020 an agreement was reached to extend the deal until 2028.
De La Rue’s share price has gone up by more than 20% since the new year. It was flat at 122.00p at the time of writing (52-week high: 125.49p, low: 77.40p).
Activist investor Richard Bernstein of Crystal Amber, De La Rue's biggest shareholder, commented on the announcment on X and said:
“A microcosm of the inertia within UK mid-caps with De La Rue's update. Since September, the order book has jumped from £252m to £347m, there's significantly higher growth than guided in November and there are ongoing discussions which may lead to cash offers- plural.
“The share price: unchanged at 121.5p! Unless we see capital reallocated to UK companies, many more bids for UK plc are inevitable. Our price target for De La Rue has been 150p but with today's update and the potential for a bidding war, that may prove to be conservative.”
