De La Rue says turnaround is on track but business mixed

BANKNOTE maker De La Rue yesterday said business over the past three months had been satisfactory and its turnaround strategy was working, but warned that some of its divisions were still facing headwinds.

Its currency printing division saw high volumes while its identity systems division, which produces passports, also performed strongly, De La Rue chairman Nicholas Brookes said in a statement.

But its paper volumes, which have been dogged by production problems over the past year, were lower than print, as the company expected.

It also said market conditions for its security products division, which makes high security features for documents, remained challenging.

De La Rue said the improvement plan, designed to restore the group to more than £100m operating profit by 2014 at the latest, was making “good progress”.

And in a show of its confidence in the outlook, it also maintained its dividend payout at 28.2p per share.

De La Rue is fighting to return to profitability levels seen in 2009 after paper production problems last July caused its largest client to suspend its order, and it is yet to reconfirm that.

The company also fought off the attentions of French rival Oberthur Technologies in January and June this year. De La Rue’s chief executive Tim Cobbold, who joined last December, has pledged to lead a recovery to strengthen the firm.

De La Rue produces more than 150 national currencies, including newly independent South Sudan.