De La Rue plc 2015/16 full year results

De La Rue plc (LSE: DLAR) (De La Rue, the “Group” or the “Company”) announces its full year results for the twelve months ended 26 March 2016 (the period or full year).

KEY FINANCIALS

The table below shows the performance before and after the disposal of the Cash Processing Solutions (CPS) business which was sold on 22 May 2016.

  Continuing Operations*   Pre Disposal*
 
2015/16
2014/15
Change
 
2015/16
2014/15
Change
 
£m
£m
%
 
£m
£m
%
Revenue
454.5
422.8
7%
 
488.2
472.1
3%
Underlying operating profit**
70.4
69.1
2%
 
62.5
69.5
(10%)
Underlying operating margin**
15.5%
16.3%
(80bpts)
 
12.8%
14.7%
(190bpts)
 
 
 
 
       
Underlying profit before tax**
58.5
57.5
2%
 
50.4
57.7
(13%)
Reported profit before tax
54.9
40.6
35%
 
20.8
38.9
(47%)
 
 
 
 
       
Underlying earnings per share**
48.1p
46.1p
4%
 
41.0p
47.9p
(14%)
Reported earnings per share
46.8p
31.8p
47%
 
16.2p
34.0p
(52%)
Total dividend per share
25.0p
25.0p
0%
 
25.0p
25.0p
0%

* “Continuing Operations” is the Group excluding CPS, “Pre Disposal” is the Group including CPS.

** On continuing operations basis, underlying numbers are before a net exceptional charge of £3.6m (restated 2014/15: £16.9m). Underlying EPS is calculated before the exceptional charge noted above and exceptional tax credits of £2.3m (restated 2014/15: £2.4m). On pre disposal basis, underlying numbers are before a net exceptional charge of £29.6m (2014/15: £18.8m). Underlying EPS is calculated before the exceptional charge noted above and exceptional tax credits of £4.5m (2014/15: £4.7m).

FINANCIAL HIGHLIGHTS

  • Full year results in line with trading update on 13 April 2016
  • Year on year revenue up 7% and underlying operating profit up 2%1
  • Positive operating cash flow resulting in net debt reduction of £4.9m to £106.1m. Net debt/EBITDA at 1.25x
  • Underlying earnings per share up 4% to 48.1p1
  • Final dividend maintained at 16.7p. Full year dividend unchanged at 25.0p.
  • Group 12 month order book up 62% year-on-year at £365m1, providing good visibility for the year ahead

OPERATIONAL HIGHLIGHTS

  • Banknotes volume up 9% to 7.1bn and Banknote Paper up 6% to 10,000 tonnes, benefiting from overspill contracts
  • Currency revenue up 11% and underlying operating profit up 9%
  • Successfully outsourced production of >500m banknotes
  • Product Authentication and Traceability underlying operating profit up 19% due to reduced costs
  • Identity Solutions revenue and underlying operating profit lower as a result of expected contractual reduction
  • Reorganisation from divisional to functional structure completed
  • 10% net average headcount reduction to 3,566 from operational improvements

STRATEGIC HIGHLIGHTS

  • Cash Processing Solutions business ‘root and branch’ review concluded with business sold
  • Encouraging progress in Polymer with a significant new three-year contract and doubling the number of customers to 14 note issuing authorities
  • Doubled number of patent filings. Launched next generation security thread Active™ and two end-to-end software solutions – DLR Identify™ and DLR Certify™
  • Manufacturing footprint review completed: reducing capacity by 25% and consolidating banknote print production to four sites3 to achieve >£13m savings p.a. from 2018/19

Martin Sutherland, Chief Executive Officer, commented:

"In the last year we have made good progress against our five year strategic plan to transform De La Rue into a technology-led security product and service provider. We have reorganised the business structure, increased investment in product development and new technologies, and successfully completed a manufacturing footprint review.

"Our Currency product lines have performed very well during the year. I am particularly pleased with our progress in Polymer which is a large and growing market. We have doubled our customer base in Polymer over the last year, including securing our first volume customer, and as the only vertically integrated polymer substrate manufacturer, we are well placed to continue to capture this growth opportunity.

"CPS continued to underperform in the second half of the year. Following a ‘root and branch’ review, we decided to exit the business and have now completed the sale.

"Looking ahead, whilst there is more to do, I am pleased with the progress we have made in the year and I am confident that the right foundations are now in place to develop a more balanced business portfolio and increase profitability. Our 12 month closing order book of £365m provides good visibility for the year ahead. Whilst, as previously announced, a material contract came to an end, we are confident that we can mitigate the impact and our expectations for the current year are unchanged."

Enquiries:

De La Rue plc   +44 (0)1256 605000
Martin Sutherland Chief Executive Officer  
Jitesh Sodha Chief Financial Officer  
Lili Huang Head of Investor Relations  
     
Brunswick   +44 (0)207 404 5959
Jon Coles    
Oliver Hughes    

A presentation to analysts will take place at 9:00 am BST on 24 May 2016 at the Lincoln Centre, 18 Lincoln’s Inn Fields, WC2A 3ED. This will also be accessible via a conference call and an audio webcast. Dial-ins for the conference call are +44 (0) 20 3059 8125, passcode: De La Rue. An archive of the conference call is also available for a week from midday 24 May 2016, which is accessible via +44 (0) 121 260 4861, passcode: 3214 492#. For the live video webcast, please register at www.delarue.com where a replay will also be available subsequently.

24 May 2016

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