De La Rue plc (LSE: DLAR) (“De La Rue”, the “Group” or the “Company”) announces its half year results for the six months ended 28 September 2024 (the “period”, “H1 25” or “half-year”). The comparative period was the six months ended 30 September 2023 (“H1 24”).
Highlights
- Adjusted operating profit of £7.3m (H1 24: £7.9m) ahead of guidance of low single digit. On IFRS basis achieved operating profit of £1.3m (H1 24: loss of £3.4m).
- Currency:
- H1 25 revenue of £94.9m (H1 24: £113.4m), with a number of deliveries moving into H2 25 as previously guided
- Order book continued to build in H1 to £251.7m at 28 September 2024 (30 March 2024: £239.2m).
- Significant orders secured in Q3 to date, bringing November 2024 order book to £338m, the highest level in at least five years.
- Order book includes significant increase in polymer orders, securing good manufacturing loads into FY26 and beyond.
- Authentication:
- H1 25 revenue of £50.2m (H1 24: £48.1m).
- Proposed sale of Authentication to Crane NXT for cash, representing an enterprise value of £300m, announced in October 2024.
- Additional multi-year contract won to produce passport data pages
- Net debt of £109.4m (FY24: £89.4m)
- Inventory build up to satisfy second half deliveries, together with timing of customer collections, impacted net working capital movement.
- Completion of Authentication sale will allow repayment of existing revolving credit facility in full, resulting in a Group net cash position.
- £30m of sale proceeds will be applied to reduce deficit on legacy defined benefit pension scheme.
- Provides a springboard to find a long-term funding solution for this scheme.
- Outlook
- Continued activity building in Currency and solid performance from Authentication underpin reiteration of full year guidance for FY25 Group adjusted operating profit of mid to high £20 millions.
- In FY26 conversion of Currency order book into sales will accelerate to produce strong double-digit growth in Currency EBITDA before central costs.
Clive Vacher, CEO of De La Rue, commented:
“We have made substantial progress in 2024 both operationally and strategically. We have reached agreement for a sale of Authentication to Crane NXT for £300m and completion of the Authentication sale will allow us to repay both our existing banking facilities in full and materially reduce the remaining deficit on our legacy defined benefit pension scheme.
“We have also built up the Currency order book to the highest levels seen for at least the last five years. The material new orders that we have won in recent months will begin to convert into increased revenue as we move into the next financial year and solidly underpin our growth expectations.
“With these firm foundations, our ongoing Currency business is now well positioned to take full advantage of an improving market, with a substantial upward step change in activity in 2025 and beyond.”
