The security printing PLC issued its results for the six months ended 30 September 2023 today, which revealed that the company’s adjusted operating profit of £7.9m was ahead of previous guidance of breakeven.
Its IFRS operating loss narrowed to £3.4m from £12.6m in H1 23, but the company made a pre-tax loss of £16.8m, compared to a pre-tax loss of £15.9m at the same stage a year ago.
Its Authentication division revenue rose by 5.7% year-on-year to £48.1m but its Currency division revenue dropped by 2.6% to £113.4m. Overall revenue for H1 24 was £161.5m, down 1.7% on the £164.3m figure recorded a year ago.
The company’s net debt of £82m was in line with its October 2023 trading statement and ahead of its previous guidance of £100m.
Its banking facilities have been extended to July 2025, while its pension situation has improved and contributions have been reduced.
The deficit per actuarial valuation is now £78m (versus previous remaining contributions of £84.7m).
The deficit repair contributions moratorium continues for FY 24; thereafter contributions will be reduced to £8m annually from FY 25-FY 27, saving £28m over that period. FY 28-FY 31 contributions will then increase to clear the deficit by December 2030 (from March 2029).
De La Rue said its Currency order book increased by over 100% since its September 2023 period end, to £219.8m, with a very high win rate since the beginning of FY 24, in a recovering market.
Clive Vacher, CEO of De La Rue, said: “De La Rue’s robust performance in the first half reflects the important actions that we have taken since 2020 to make the company resilient to changing market conditions.
“These actions have allowed us to navigate a downturn over the past 18 months, particularly in Currency, and I am pleased that the market is now showing signs of continuing recovery.
“We have doubled the Currency order book since September 2023 and are exhibiting a high win rate, with more opportunities in the pipeline.
“Authentication continues on its path to £100m in revenue for the full financial year. We have secured a significant multi-year contract extension, and we are in the late stages of securing another contract extension in GRS.
“Our Australian passport programme continues apace and is a significant driver of growth this year.
“We continue to focus on the financial progress of the company. In the half year, we demonstrated improved operating cash flow versus H1 FY 23 and, as announced in our October trading statement, significantly improved net debt versus previous guidance. We have extended our banking facilities to July 2025 and are comfortable to reduce the size of facility.
“With a new pension deficit valuation of £78m, we have been able to work with the Pension Trustee on an amended schedule of contributions, that saves the company £28m cash contributions between FY 25 and FY 27. The schedule now runs to December 2030, a modest extension from March 2029, but still a number of years ahead of scheme maturity.”
He added: “The progress reported today underpins the board’s full year guidance of adjusted operating profit in the low £20m range, and net debt in the mid £90m range.”
Clive Whiley, chairman of De La Rue, praised the “demonstrable progress” shown in the interim results.
He said the board was determined to utilise this market update “as a springboard to optimise the underlying intrinsic value of the business, for the benefit of all stakeholders, on which the company will provide an update before 31 May 2024."
De La Rue’s share price was down by 6.27% on yesterday’s close at the time of writing just before lunchtime today, at 75.92p.
