Cheery 2010 for De La Rue as profits rise

Steve Dinneen
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THE world’s largest printer of banknotes yesterday announced robust trading.

De La Rue said in its interim management statement that it was confident in its outlook for the rest of the year. It said trading was well ahead of the previous year, although it did not release any figures.

Its preliminary results are due to be announced on 25 May. The announcement is in line with the company’s expectations for the period.

De La Rue prints over 150 national currencies as well as travellers checks, stamps and passports.

It said operating cash flow had been good but that it expects to end the year with modest net debt.

Despite De La Rue’s healthy interim statement, its shares closed down. It dropped 3.15 per cent to 953p.

Analysts were split over the results with some maintaining “hold” recommendations and others urging investors to snap up the company’s shares.

The firm said: “The board remains confident in the group’s trading outlook for the year. Trading has been strong, with banknote and paper volumes showing an increased run rate compared with the first half of the year and well ahead of the comparable period last year.

“The balance sheet remains strong and good operating cash flow has been driven by management of working capital.

“Looking forward into the new financial year, the board believes that banknote volumes should remain at similar levels but the unusually strong margin mix in currency may not be repeated.

“It is expected that this will be offset by productivity gains, cost reduction and improved trading in other parts of the business.”