A Strong 1st Half and Good Outlook for De La Rue

Sales for De La Rue for the first half of 2021/22 increased by 0.9% to £179.2 million, compared with the first half of 2020/21, according to its recently published interim results. Adjusted operating profit increased by 13.4% to £17.4 million.

For the Currency Division, which contributes nearly three quarters of revenue, sales were up by 5.3% to £132.7 million. Operating profit more than doubled to £5.7 million.

Increasing and ongoing global demand for cash as central banks seek to increase stock levels during the pandemic has benefited the company, which has stated that it expects banknote capacity utilisation to be at 100% for the second half of the year.

The growth in polymer banknotes was 90% in the first half. For the full year, the company is projecting polymer production volumes to grow by 70%, with further increases in 2022/23.

The company’s cost out programme, first announced as part of its Turnaround Plan in February 2020, has been substantially completed, and will result in an additional £7 million in savings in 2021/22.

De La Rue’s goals for the Currency Division include converting the world to polymer and being the market leader, investing R&D in polymer (a second line is under construction and will be operational in the second half) and continuing to roll out new security features. It will also be focusing on the upgrade of its printing facility in Malta, which will be achieved without exceeding the original turnaround investment of £79.8 million.

Commenting on the results, CEO Clive Vacher said: ‘our first half results have shown substantial improvement in the Group’s financial and operational performance. We continue to make progress in executing our Turnaround Plan, which is delivering both operating improvements and cost reductions.’ He added that ‘trading for FY 2021/22 to date continuing to be positive, the outlook for revenue, adjusted operating profit and net debt for the full year remain in line with the Board’s expectations’.