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Currency arm buoys De La Rue

At last some positive news for shareholders in the global banknote giant.
April 13, 2016

The share price of De La Rue (DLAR) surged on news that underlying operating profit is predicted to come in at £62m for the year to March. The figure is in advance of City estimates, driven in the main by strong operational performance on certain contracts within the group's Currency business.

IC TIP: Hold at 478p

The announcement took markets by surprise, given that investors have had to contend with a steady stream of profit warnings in recent years. De La Rue is the world's largest banknote printer, so the inexorable rise of digital transfer and online payments systems hasn't played well with the group's business model.

In 2010, the share price tumbled after the Reserve Bank of India pulled De La Rue's largest contract on quality control issues. There have been high-profile resignations and a thwarted takeover bid in the intervening period so, given the slew of bad news stories, it's perhaps understandable why a modest uptick in operating profit could precipitate a double-digit share price rise.