Don't be too concerned by the apparent slide in profits at banknote printer De La Rue. Strip out last year's £45.6m net gain, largely from selling the group's Camelot stake, and adjusted pre-tax profit actually rose 22 per cent year-on-year to £29m.
With new countries such as South Sudan needing banknotes, then the group's currency division looks well placed. That unit saw operating profit rise 7 per cent in the period to £22.9bn - as banknote volumes grew 12 per cent to 2.8bn. A strong order book meant that full-year banknote volumes are expected to be around 6.5bn - up 10 per cent on last year. Meanwhile, in the solutions division, a lucrative UK passport printing contract pushed operating profit up 37 per cent to £8.6m. The divisional order book rose 6 per cent to £66m, too.
The strong performance helped deliver cash inflow of £33.2m in the half, although weak equity conditions saw the pension deficit increase to £117.5m from £100.5m at the full-year stage. Investec Securities expects adjusted full-year pre-tax profit of £56.2m, giving EPS of 41.3p (2011: £33.3m/23.9p).
DE LA RUE (DLAR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 876p | MARKET VALUE: | £869.7m | |
| TOUCH: | 876-877p | 12-MONTH HIGH: | 915p | LOW: 541p |
| DIVIDEND YIELD: | 4.8% | PE RATIO: | 42 | |
| NET ASSET VALUE: | * | NET DEBT: | £39m | |
| Half-year to 24 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 209 | 69.4 | 66.8 | 14.1 |
| 2011 | 238 | 27.1 | 19.9 | 14.1 |
| % change | +14 | -61 | -70 | - |
Ex-div: 7 Dec Payment: 11 Jan *Negative equity shareholders' funds | ||||
