De La Rue plc (LSE: DLAR) (“De La Rue”, the “Group” or the “Company”) announces its full year results for the period ended 30 March 2024 (the “year”, “period” or “FY24”). The comparative period was the period ended 25 March 2023 (“FY23”).
Highlights
• Group revenue of £310.3m (FY23: £349.7m) impacted by Currency industry downturn.
• Adjusted operating profit of £21.0m (FY23: £27.8m) in line with guidance provided at the start of the year. IFRS operating profit of £5.8m, an improved performance compared with FY23 loss of £20.3m.
• Authentication:
o FY24 revenue rose 12.5% to £103.2m (FY23: £91.7m), surpassing £100m target.
o Adjusted operating profit of £14.6m (FY23: £14.3m) and IFRS operating profit of £12.9m (FY23: £5.4m) increased.
o Four multi-year contract renewals secured with associated expected future revenues of over £150m.
o Authentication expected future revenues covered by contracts now over £350m, stretching over 11 years, with most of this due within the next three years.
• Currency:
o Revenue reduced 18.7% to £207.1m (FY23: £254.6m).
o Adjusted operating profit of £6.4m (FY23: £13.6m) achieved through industry downturn and much reduced IFRS operating loss of £1.0m (FY23: loss of £24.8m).
o This environment has now improved significantly, highlighting the resilience and long-term nature of the worldwide currency industry.
o Pick-up in order book seen at Interims has continued into calendar 2024. Order book stood at £239.2m at 30 March 2024 (FY23: £136.8m) and £241.4m at end June 2024.
o Win rate remains high.
• Net debt of £89.4m (FY23: £82.4m restated) in line with pre close guidance and marginally ahead of the mid-£90m guidance given in December 2023.
• Following 30 May strategy update, further interest in both of the Group’s divisions has been received and negotiations and due diligence in respect of both divisions are progressing.
• Board is confident that one or more of these workstreams will be concluded and allow the RCF to be repaid before its expiration on 1 July 2025. As the expiry date of the RCF is within the going concern review period, the results contain a material uncertainty. Further details can be found within ‘2. Basis of Preparation and Accounting Policies’ below.
• A further update will be provided ahead of Annual General Meeting on 25 September 2024.
Clive Vacher, CEO of De La Rue, commented:
“De La Rue’s businesses successfully navigated substantial trading challenges faced in the last financial year and met all the expectations that were set.
“Both divisions enter the current financial year well positioned to take advantage of the increasing opportunities available to them. The recovery in the Currency market that we noted at the end of 2023 has continued into 2024, and the division now has a strong order book that has been secured by an excellent win rate. Authentication has converted all four substantial contracts that it was targeting for renewal in the last year, safeguarding £150m of future revenue. It is now pursuing a number of new potential opportunities to grow revenue further.
“This stronger trading environment provides an encouraging background with which to progress our strategic priorities. These are progressing well and we are confident that discussions will reach a successful conclusion in the coming months.”
Clive Whiley, Chairman of De La Rue, added:
“In the year since my appointment as Chairman, De La Rue has achieved much to harmonise stakeholder objectives. At the same time, we have made significant strides in stabilising the financial position of the Group. Despite the challenging trading environment over the last two years, De La Rue remains a trusted leader in providing authentication and currency solutions and the business is well placed to benefit from the normalisation of our markets.
“Since we published our strategic update on 30 May, we have seen an increase in strategic interest with more entities involved and due diligence undertaken on both divisions. These workstreams continue and we will provide a further update ahead of our annual general meeting on 25 September.
“The Board has made demonstrable progress in establishing a route to realising the underlying intrinsic value of the business for the benefit of all stakeholders and we look forward to completing this process during the current financial year. “
