The Authentication division appears likely to be sold first, and a successful deal would allow the PLC to deal with a material uncertainty that hangs over its upcoming obligation to repay its £235m revolving credit facility on or before 1 July 2025 – with a forecast of insufficient liquidity to repay it otherwise.
Potential interest in the business came to light two months ago.
Alongside year-end results announced today (25 July), chairman Clive Whiley said: “Since we published our strategic update on 30 May, we have seen an increase in strategic interest with more entities involved and due diligence undertaken on both divisions. These workstreams continue and we will provide a further update ahead of our annual general meeting on 25 September.
“The board has made demonstrable progress in establishing a route to realising the underlying intrinsic value of the business for the benefit of all stakeholders and we look forward to completing this process during the current financial year,” he stated.
For the year to 30 March De La Rue posted overall sales down 11.3% at £310.3m.
Sales at its Currency division fell by 18.7% to £207.1m, while its Authentication business grew and passed the landmark £100m figure with sales up 12.5% at £103.2m.
Authentication filed adjusted operating profit slightly up at £14.6m (FY23: £14.3m).
Currency’s adjusted operating profit more than halved, at £6.4m (FY23: £13.6m).
Authentication also has expected future revenues in the bag of more than £350m “with most of this due within the next three years”, while the Currency market was now described as “returning to more normal levels”.
CEO Clive Vacher commented: “We move into FY25 with Currency now enjoying a prolonged and substantial growth in activity and with Authentication pursuing several potential new business opportunities, having already secured substantial revenue with its renewal of four significant multi-year contracts.
“As a result of the transformation of the company over the past four years, De La Rue's divisions occupy leadership positions in their respective industries and are well positioned to take advantage of the growth that is evident in their market segments.
Vacher thanked employees “for their perseverance and determination in reaching this point” and said he looked forward to taking full advantage of new opportunities across both divisions to create growth.
The bottom line pre-tax loss was £15.4m, compared with a £29.6m loss the prior year.
The group also flagged an error in its FY23 results, whereby deferred tax assets of £18.3m were overstated by £12.4m.
The restatement meant that the total comprehensive loss for that financial year increased by £12.4m, to £140.2m.
The group’s share price fell by 11.2% on the results, to 91p (52-week high: 107p, low: 45.15p).
Its market capitalisation is currently £182.2m.
