Member Article

Operating profits up at De La Rue despite overcapacity in market

North East money and securities printing firm De La Rue has reported a 18% increase in operating profit, despite overcapacity in the printed banknote market.

The Group’s 12 month closing order book at September 28 was £232 million, up £25 million since the year end. Currency orders were up 14% at £180 million.

The Team Valley-based business said it was on course to manage £40 million of cost saving per year, with £10 million savings identified for the second half 2013/2014 - dervied from procurement initiatives and process reform.

Tim Cobbold, CEO, said: “Overall De La Rue performed well in the first half with operating profits up 18% at £39m, on slightly lower revenues. This improvement, despite more challenging trading conditions, reflects the good progress made on the ongoing cost reduction programme which is on track to meet the targets for the year.

“As previously announced the current overcapacity in the banknote paper market has led to a more difficult pricing environment in the printed banknote market. Accordingly the Board still expects operating profit for the current financial year to be c£90m. This is an increase of over 40% on the previous year and a 125% increase on the performance in 2010/11 when the Improvement Plan began.

“Despite the challenging market De La Rue is in good shape and benefiting from the many initiatives within the Improvement Plan. The Group’s 12 month order book at the end of the first half was £232m, up £25m since the year end.”

This was posted in Bdaily's Members' News section by Tom Keighley .