De La Rue plc (LSE: DLAR) (“De La Rue” or the “Company”) today announces a trading update from the end of the financial year ended 28 March 2020 and an update on the impact of COVID-19.
The Company’s expectations for the financial year 2019/20 remain unchanged from the guidance given in the trading update on 31 March 2020.
De La Rue has had a strong start to the new financial year, with a series of significant contract wins for both its Authentication and Currency divisions.
In Authentication, it has signed a five-year agreement to supply polycarbonate data pages for the new Australian passport. This follows the development agreement signed with Note Printing Australia in 2016, under which De La Rue has developed several new security features to be produced at the Company’s factory in Malta. De La Rue will scale up manufacturing and anticipates first deliveries in the fourth quarter of financial year 2020/21.
De La Rue’s brand protection expertise has been selected by an international customer to authenticate and protect its COVID-19 testing kits that are being shipped around the world, and it has developed existing physical and digital solutions to provide a COVID-19 immunity certification scheme.
To date, in this financial year, De La Rue’s Authentication division has been awarded contracts with total lifetime value exceeding £100m, which further underpins the Company’s expectation of Authentication division revenue of £100m by financial year 2021/22, with strong operating margins.
In Currency, De La Rue is experiencing strong demand that has continued during the COVID-19 pandemic and has been awarded contracts representing approximately 80% of its available full-year Currency printing capacity. In addition, the Company continues to make progress in enhancing its portfolio of offerings and the realignment of its cost base to enable it to become more competitive. As a result, it continues to expect the Currency division to reach a mid-teens adjusted operating margin in financial year 2020/21.
The COVID-19 pandemic has to date had only a limited impact on the Company’s operations.
The Company has implemented the relevant protective, regulatory and safety procedures for all employees, including home working, and there has been limited impact on its global service, support and operations activities.
De La Rue has seen the timescales for a small number of Government Revenue Solution contracts become somewhat extended, which has been more than offset positively by the contract wins above. Its factories have run continually throughout the period, except for an eight-week shutdown of the Sri Lanka facility, which returned to full production this month and is working to make up the production shortfall. The Company has experienced no material problems regarding raw material supply, while there have been minor delays to the transportation of finished products that are expected to be resolved shortly.
De La Rue will announce its results for the full year ended 28 March 2020 on 17 June 2020.
De La Rue plc
+44 (0)1256 605322
Clive Vacher, CEO
Rob Harding, Interim CFO
Paul Sharma, Head of Investor Relations
Brunswick Group LLP
+44 (0)207 404 5959
Stuart Donnelly/ Imran Jina
Cautionary note regarding forward-looking statements
This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “anticipates”, “expects”, “intends”, “plans”, “may”, “will”, “could”, “shall”, “risk”, “aims”, “predicts”, “continues”, “assumes”, “positioned” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the directors, De La Rue or the Group concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth and strategies of De La Rue and the industry in which it operates.
By their nature, forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors because they relate to events and depend on circumstances that will occur in the future whether or not outside the control of the Company. Past performance cannot be relied upon as a guide to future performance and should not be taken as a representation or assurance that trends or activities underlying past performance will continue in the future. Accordingly, investors or potential investors should not place undue reliance on these forward-looking statements. The Group's actual results of operations, financial condition, liquidity and the development of the industry in which it operates may differ materially from the impression created by the forward-looking statements contained in this announcement. In addition, even if the results of operations, financial condition and liquidity of the Group and the development of the industry in which it operates, are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods.
Other than in accordance with its legal or regulatory obligations, De La Rue does not undertake any obligation to update these forward-looking statements, which speak only as at the date of this announcement, and will not publicly release any revisions that may be made to these forward-looking statements, which may result from events or circumstances arising after the date of this announcement.