30th May 2018 08:50
LONDON (Alliance News) - De La Rue PLC said on Wednesday it saw a substantial profit lift in its recently ended financial year due to an exceptional gain within the period, though revenue also grew.
For the year to the end of March, best known for making banknotes and passports, reported a pretax profit of GBP113.6 million, up from GBP58.2 million the year before.
This was due to an exceptional gain of GBP60.9 million coming from the disposal of its paper business Portal De La Rue Ltd to EPIRIS Fund II near the end of March.
On an adjusted basis, pretax profit declined by 9.0% to GBP53.4 million from GBP58.7 million as adjusted operating profit fell by 11% to GBP62.8 million from GBP70.7 million due to a significant reduction in the profitability of the disposed-of paper business.
Revenue grew by 7.0% to GBP493.9 million from GBP461.7 million through a strong performance in all three of its segments, with Product Authentication & Traceability seeing the highest rate of growth. Its two other segments are Currency and Identity Solutions.
The company said it has started its current year with an order book off GBP363 million, excluding paper orders, up 6.0% from GBP341 million a year before.
De La Rue proposed a final dividend of 16.7 pence per share, taking its total payout for the year to 25.0p, maintained from the prior year.
The group said the strong order book has given De La Rue good revenue coverage for the current year, and profit is expected to be in line with the prior year with continued investment in research and development.
"Solid growth in all segments has been offset by strategically focused increases in investment in R&D and sales, which will drive long term sustainable growth. While losing the new UK passport tender was disappointing, it does not change our goals, nor does it detract from the underlying performance of the group which remains strong," said Chief Executive Officer Martin Sutherland.
"The sale of the paper business and the associated long-term paper supply agreement have reduced our exposure to the volatility of the oversupplied paper market, while securing the surety of supply for our print business. Through this, and good cash generation from the business, we have significantly strengthened our balance sheet with net debt now at its lowest in five years," Sutherland added.
Shares in De La Rue were up 2.4% at 515.00 pence on Wednesday.
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