De La Rue lifts profits 20%: Printer reshapes businesses and creates new division

Click to follow
The Independent Online
DE LA RUE, the banknote printer that last week abandoned its attempted takeover of Portals, yesterday reported a 20 per cent rise in annual profits to pounds 123.7m before tax, writes Paul Durman.

The company announced it had reorganised its businesses to create a new transaction systems division.

Jeremy Marshall, De La Rue's chief executive, said the reorganisation acknowledged the trend for its business to move away from the simple production of documents (such as passports) and towards sophisticated electronic systems that can read and identify them. As a consequence, De La Rue has grouped its cheque and passport printing activities with its currency printing business in an enlarged security printing division.

The first results from the transactions systems division showed a 72 per cent increase in operating profits to pounds 5m, on sales 12 per cent ahead at pounds 64.4m. Mr Marshall said the size of the profits increase reflected the lumpy nature of the contracts.

With the main security printing business lifting its profit by 36 per cent to pounds 50.6m, De La Rue was able to report pre-tax profits of pounds 123.7m for the year to end-March, a 20 per cent increase on the previous year.

Mr Marshall said De La Rue had benefited from record volumes. Demand for banknotes was strong because of the company's trade with the rapidly growing emerging economies. He said the company was doing good business with the countries of the former Soviet Union.

De La Rue's strong cash flow enabled it to increase its cash pile by pounds 96.8m to pounds 267.7m. A final dividend of 14p will increase the total by 17.6 per cent to 20p a share.

Bottom Line, page 28