Posting its half-year interim results, De La Rue achieved an operating profit £39.1m (2012: 33.2m), excluding exceptional charges of £4.4m relating to its cost reduction programme and a “legacy indirect tax issue”. 

Meanwhile, the global banknote printer restated its expectation to hit revised full-year operating profits of £90m. Last month, citing tough pricing competition in its Currency division, De La Rue issued a profit warning for its full year operating results, revising down expectations from the £100m set out in its Three-year Improvement Plan, to £90m, although this still represents a 40% increase on the previous year and 125% up on 2010/2011. 

Announcing the results this morning, De La Rue chief executive Tim Cobbold said: “As previously announced, the current overcapacity in the banknote paper market has led to a more difficult pricing environment in the printed banknote market. 

“Accordingly the board still expects operating profit for the current financial year to be around £90m.”

Revenues for the Hampshire-based security printer were down 5% in H1 to £234m (2012: 245.4m), which was partially attributed to a significant reduction in sales of large money sorters.

Pre-tax profits were boosted by the impact of the cost reduction programme, which Cobbold said was on track to meet targets, increasing 19% on the same period last year to £28.4m (£23.8m). 

In its Currency division, which has been hit by overcapacity in the banknote paper market, particularly in Europe, banknote printing volumes fell 10% in the first half to 2.6bn notes, reflecting shipment timings between the first and second half of the current year, while paper volumes increased by 4% to 4,700 tonnes. 

Revenues increased by 4% to £145.4m due to increased sales of low contribution banknote paper, while operating profit rose 6% as a result of cost reduction, though this was marginally offset by reduced print volumes.

The Cash Process Solutions business suffered with an operating loss of £3.2m compared to a £1.1m profit in the same period last year. Cost reductions have been implemented with a target of achieving break-even in 2014/15.

Security products achieved a 30% uplift in operating profit to £5.2m while Identity Systems achieved growth of 135% to £13.4m, attributed to strong performance in international business. 

Continuing its battle against ongoing pricing pressures, the business is investing heavily in new technologies, focusing particularly in the Currency division on security features for printed banknotes and polymer substrates. 

Earnings per share were up 24% to 25.7p, while an interim dividend of 14.1p was maintained. 

Share price was up 10.2% to 922p at the time of writing.