De La Rue profits hit by surging pension deficit

City A.M. Reporter
DE La Rue, the world’s biggest non-governmental printer of banknotes, yesterday announced plans to cut its pension deficit after restructuring charges and pension costs hit profits.

An early April valuation of its UK final salary pension scheme showed a deficit of £204m, from £56m in April 2006, as declining asset values and longer life expectancy outweighed increased contributions.

As a result, the firm said it would create a new defined contribution scheme from the summer of 2010 and close its final salary pension for all staff from 1 April, 2013.

The company said it would increase its annual funding of the scheme to £15m a year from £12m, with a four per cent annual increment.

While pension charges and the cost of restructuring its cash processing solutions unit hit adjusted pre-tax profit, down one per cent to £104.1m, revenues and operating profit both beat estimates, rising 12 per cent and 13 per cent, respectively.

Revenues in the year to 27 March were £561.1m, up 12 per cent against last year’s £502.4m, while the operating profit margin, before exceptional items was 19.5 per cent, from 19.2 per cent last year.