De La Rue Boosted by Recovering Demand

De La Rue appears to be enjoying a rebound following multiple new contract wins and growing demand for banknotes.

In its interim results for 2023/24, it has reported adjusted operating profit of £7.9 million, exceeding previous guidance of break-even but £1.4 million below last year’s first half of £9.3 million. Its IFRS operating loss was significantly reduced, from £12.6 million in the first half of last year to £3.4 million this first half. Currency revenue of £113.4 million was 2.6% lower, but Authentication Revenue increased by 5.7% to £48.1 million.

However, the company’s currency order book increased by over 100% since September 2023 and its net debt of £82 million was £18 million lower than the October 2023 trading statement guidance of £100 million. Operating cash flow of £15.4 million exceeded the £2.8 million outflow of the first half of last year by £18.2 million.

There was good news too regarding De La Rue’s access to cash, its lenders agreeing to extend its banking facilities to July 2025 and cut its revolving credit facility limit by £15 million to £235 million.

The rest of the year also looks promising, with the Currency order book increasing from £105.8 million to £219.8 million since the end of September on the back of ‘several significant orders’, signalling a recovering market.

Given the encouraging state of its two main business segments, the Board reiterated its full year guidance for adjusted operating profit in the low £20 million plus range and net debt in the mid £90 million range.

Commenting on the results, CEO Clive Vacher 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’.