12th Dec 2024 11:51
(Alliance News) - De La Rue PLC on Thursday highlighted "substantial progress" in 2024, as it reported a decline in half-year revenue.
Basingstoke, Hampshire-based De La Rue is a provider of authentication software and currency printing services. Its shares were down 3.7% to 105.50 pence on Thursday morning in London.
Pretax loss narrowed to GBP6.5 million in the six months ended September 28 from GBP16.8 million a year prior, despite the decline in revenue, as the firm benefited from a reduction in exceptional charges.
Revenue for the period fell 10% to GBP145.1 million from GBP161.5 million in the prior year, driven by a weaker performance in its Currency division where revenue declined 16% to GBP94.9 million from GBP113.4 million.
De La Rue noted that revenue in its Currency division benefitted in the prior year period from banknotes manufactured in financial year 2023 that were not sold until financial year 2024. Similarly, it said first-half revenue for financial 2025 was hurt by some deliveries being pushed into the second half of the financial year.
Interim revenue for De La Rue's Authentication division improved by 4.4% year-on-year to GBP50.2 million from GBP48.1 million, as the firm succeeded in securing renewals on two multi-year government revenue solutions contracts in May.
In October, De La Rue agreed to the sale of Authentication to Crane NXT Co for GBP300 million, with the sale expected to complete during the first half of 2025.
De La Rue reiterated its full-year guidance of adjusted operating profit in the mid to high GBP20 millions, with this confidence underpinned by "continued activity building in Currency" coupled with a "solid performance from Authentication". This compares with adjusted operating profit of GBP27.8 million achieved in the prior year.
De La Rue added that in financial 2026, the conversion of Currency order book into sales will "accelerate to produce strong double-digit growth in Currency earnings before interest, tax, depreciation and amortisation before central costs."
De La Rue Chief Executive Clive Vacher commented: "We have made substantial progress in 2024 both operationally and strategically. We have reached agreement for a sale of Authentication to Crane NXT for GBP300 million and completion of the Authentication sale will allow us to repay both our existing banking facilities in full and materially reduce the remaining deficit on our legacy defined benefit pension scheme.
"We have also built up the Currency order book to the highest levels seen for at least the last five years.
"With these firm foundations, our ongoing Currency business is now well positioned to take full advantage of an improving market, with a substantial upward step change in activity in 2025 and beyond."
By Christopher Ward, Alliance News reporter
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