In a trading statement made alongside its preliminary year-end results to 26 March, the firm said the payout would be equivalent to 38p a share.

This will be accompanied by a share consolidation, which will reduce the number of shares in issue by 10%.

It predicted that results would be ahead of market forecasts in March, and pre-tax profits were up 13.3% on the previous year at 66.5m.

The strong improvements in profit came despite a 5.8% fall in sales to 643.2m.

Chairman Nicholas Brookes said the performance had been achieved despite a 9.1m adverse impact from currency exchanges, in particular the weakness of the US dollar throughout the year.

A strong operating result for its security paper and print division, where operating profits were up 7.5% to 45.6m, was helped by a delay in currency orders from the previous year, and the success of the Iraq contract, with some 2bn bank notes printed in 2003.

The sale of its loss-making Sequoia Voting Systems business to Smartmatic Corporation was also confirmed during the period, for a consideration of 8.7m.

Although Brookes said he remained confident of the outlook for the year, he did not expect a repeat of the improved conditions for currency seen in 2004-2005.

De La Rue's shares have been climbing all week, rising 26p since Monday and up 7p today at 392.75p.

Story by Andy Scott