De La Rue's chief executive, Ian Much, said yesterday that after returning half the money to shareholders, he planned to use the proceeds from the sale to finance bolt-on acquisitions.
De La Rue, the largest non-government printer of bank notes, said yesterday it would will not sell its entire card systems unit but will keep its identity systems and transaction services units to incorporate in the group's new services division. The unit was created last June to help the company win lucrative outsourcing contracts, making it less dependent on product sales.
Following the appointment of Mr Much as chief executive last September, De La Rue has decided to focus on its two largest divisions, cash systems and security paper and print. In March, Mr Much announced a shake-up costing pounds 40m and 500 jobs. He also instigated the relocation of the company to Basingstoke in Hampshire, a move that prompted the resignation of the company's finance director, Richard Laing.
De La Rue's identity systems and transaction businesses had operating profit of pounds 1.6m and sales of pounds 21m for the year ended 31 March. The card operations had pre-tax profit of pounds 3.1m and sales of pounds 140m, of which pounds 58.5m came from the unit's smart card activities.
Overall, the company slipped to a full-year loss of pounds 14m on charges tied to cutting costs and scaling back production because of lower prices for the bank notes it sells. Mr Much said: "The past year has been a horrible one - we are all very glad to have it behind us."
De La Rue prints money in 120 of the world's smaller countries and provides Brazil's entire cash-handling services. The company has a 26.7 per cent stake in the UK lottery operator Camelot.
Paper makers such as De La Rue, Arjo Wiggins, David S Smith and Bunzl have all suffered recently from falling prices and volumes. This has partly been the result of increased competition from Japanese producers. Rising raw materials prices have also contributed.
Francois-Charles Oberthur Fiduciaire is a private company that makes banknotes, credit cards and lottery tickets and has a turnover of pounds 2bn. The French company will pay pounds 170m in cash for De La Rue and will assume pounds 30m of debt.
De La Rue's share closed up 7.5p at 375p yesterday.Reuse content