25th Jul 2024 15:54
(Alliance News) - Shares in De La Rue PLC fell sharply on Thursday, as the banknote printer's reference to a "material uncertainty" overshadowed its annual results.
De La Rue shares were down 7.8% to 94.54 pence in London on Thursday afternoon. The stock was down as far at 88.40p in late-morning trade.
Basingstoke, Hampshire-based De La Rue provides Authentication software and Currency printing services.
Revenue fell 11% to GBP310.3 million in the financial year that ended March 30 from GBP349.7 million the year before. Pretax loss, however, slimmed to GBP15.4 million from GBP29.6 million, thanks to fewer exceptional charges.
Adjusted operating profit was GBP21.0 million, down from GBP27.8 million a year before. De La Rue noted this was in line with guidance it provided at the start of the year.
Net debt on March 30 was GBP89.4 million, up from a restated GBP82.4 million a year before, but slightly better than guidance of GBP90 million given back in December.
Looking ahead, De La Rue warned that its current cash flow forecasts suggest it will not have enough in its coffers to repay a revolving credit facility by the start of next July.
"Various strategic options are being pursued which would allow the group to repay the RCF on or before 1 July 2025. The most progressed of those is the sale of the Authentication division. The board notes that the probability of completion, timing and terms of the sale of the division are subject to factors outside of the board's control, which may in turn impact the cash proceeds, the costs associated with the transaction and the amounts required to address any pension scheme risk, along with the day one liquidity of the retained operations of the group.
"These matters represent a material uncertainty which may cast significant doubt upon the group's ability and the company's ability to continue as a going concern for a period up to 28 September 2025," De La Rue cautioned.
The company said interest has been received in both of its business divisions and due diligence is progressing. "The board is confident that one or more of these workstreams will be concluded and allow the RCF to be repaid before its expiration on 1 July 2025," De La Rue said.
By Tom Waite, Alliance News editor
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