27th May 2015 06:27
LONDON (Alliance News) - De La Rue PLC Wednesday reported a drop in pretax profit in its recently completed financial year, as margins were squeezed by pricing pressure and the company achieved lowers levels of new business than expected in its identity systems and security products.
Weakness in the euro has put further pressure on its profitability in the new financial year, the company said.
In a statement, the banknote printer and security paper maker said it made a GBP38.9 million pretax profit in the year ended March 28, compared with GBP59.8 million in the prior year. Revenue was down to GBP472.1 million from GBP513.3 million, while operating expenses were down to GBP421.4 million from GBP441.5 million.
De La Rue cut its dividend for the year to 25.0 pence per share from 42.3p per share in the prior year, saying it will aim to maintain dividends at the 2014/15 level as it is "mindful" of how important the dividend is to shareholders.
The company said difficult market conditions have continued into the new financial year, with the recent weakness of the euro against sterling giving "euro zone suppliers a commercial advantage putting some further pressure on the group's profitability".
"These results are in line with our revised expectations and include the benefit of further operational efficiencies. However, these have been outweighed by the impact of the challenging market conditions on revenue and operating profit across the group," Chief Executive Martin Sutherland said in a statement.
"In my first seven months, I have strengthened the leadership team and restructured the organisation to better align the business with its strategic needs as well as initiating a number of actions to achieve substantial cost savings which will be largely reinvested in the business to drive growth," Sutherland said.
"I have completed a review of the business and formulated a clear strategic plan to deliver growth and improved profitability in the long term through a greater focus on customers, innovation and delivery," Sutherland added.
His plan will aim for a higher growth, technology-led business with improved and less volatile profitability.
By Samuel Agini; [email protected]; @samuelagini
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