Printing money might sound like a road to riches, but De La Rue (DLAR) has found the way paved with pebbles rather than gold of late. Overcapacity and pricing pressures in the banknote paper market forced the world's largest banknote printer to issue a profit warning back in October. De La Rue said it would no longer meet its 2013-14 operating profit target of £100m, sending the shares into a tailspin.
These numbers brought some respite. The shares rose 9 per cent in morning trading when De La Rue announced it had delivered slightly above its revised operating profit target of £90m. In the final year of its three-year improvement plan, the group achieved a further £20m of cost savings, taking the annualised run rate to £40m. That has driven operating profit to £90.5m, from £40m three years ago.
Management tell us they expect to deliver further operating efficiencies this year, but did not want to put a figure on likely savings. Broker Investec expects adjusted pre-tax profit of £78.6m this year, giving earnings per share of 60.6p (from £77.3m and 60.2p in 2013-14).
| DE LA RUE (DLAR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 869p | MARKET VALUE: | £875m | |
| TOUCH: | 868-869p | 12-MONTH HIGH: | 1,053p | LOW: 739p |
| DIVIDEND YIELD: | 4.9% | PE RATIO: | 18 | |
| NET ASSET VALUE: | * | NET DEBT: | £89.9m | |
| Year to 29 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 561 | 96.6 | 71.0 | 42.3 |
| 2011 | 464 | 72.8 | 67.6 | 42.3 |
| 2012 | 528 | 32.9 | 31.8 | 42.3 |
| 2013 | 484 | 43.7 | 37.4 | 42.3 |
| 2014 | 513 | 59.8 | 47.3 | 42.3 |
| % change | +6 | +37 | +26 | |
Ex-div: 2 Jul Payment: 1 Aug *Negative shareholder funds | ||||
