24th Nov 2015 09:25
LONDON (Alliance News) - De La Rue PLC on Tuesday said it has initiated a "root and branch" review of its cash processing arm, after its poor performance held back profit in the first half of the banknote printer's financial year.
De La Rue said its overall performance in the half was better than expected, showing "strength and resilience" against volatile market conditions.
The company reported that pretax profit rose to GBP19.6 million in the half year to September 26, compared with GBP18.1 million the corresponding period the prior year, as revenue fell to GBP204.8 million from GBP214.9 million and operating expenses came down to GBP179.1 million from GBP190.8 million.
The cash processing business's revenue fell to GBP16.1 million from GBP25.5 million, while the currency arm's revenue rose to GBP139.8 million from GBP136.8 million. Revenue within identity systems slipped to GBP31.5 million from GBP34.0 million while revenue at security products edged down to GBP19.6 million from GBP20.8 million.
"Identity and Security Products have also progressed well with the launch of the first digital solutions. However, the overall performance was dampened by the poor results in CPS," Chief Executive Martin Sutherland said in a statement.
Sutherland said that a five-year plan set out in May is well underway, with an aim of focusing the group on higher growth, technology-led businesses and reduce volatility of earnings. The chief executive said he is pleased with early progress made under the plan.
"We have restructured the business to support the delivery of the strategy and increased investment in product development and new technologies. Our review of the manufacturing footprint to improve efficiency and reduce costs is near completion and we will provide more details in the coming weeks," Sutherland said.
De La Rue said it remains confident of its prospects for the full year, and that it is "encouraged" by its increased order book, strategic progress and the resilience of its currency business.
Shares in De La Rue were down 0.2% at 444.0 pence, having spiked higher at the open to 482.25p.
By Samuel Agini; [email protected]; @samuelagini
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