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27 Nov 2018 | 09:04

De La Rue to refocus identity business as profits slide

De La Rue said Tuesday it was confident of meeting its expectation for the full year despite reporting first-half profits fell sharply, as the loss of revenue from its exited paper business continued to stifle performance.

For the six months ended 30 September, reported operating profit fell 59% to £10.1m and revenue rose 5% to £257.6m.

Excluding the impact of the exited paper business, group revenue was up 9% to £242m and adjusted operating profit was down 31% to £17m.

Net debt of £94.3m was above expectations, which the company blamed on timing of deliveries in the half year.

Following a strategic revenue review, the company said it would 'refocus our identity business on the supply of higher margin security features and components.'

The company proposed to leave the dividend unchanged, recommending an interim dividend of 8.3p a share. 'We continue to make progress in delivering against our strategic plan to transform the Group into a less capital intensive, more technology led business,' said Martin Sutherland, Chief Executive Officer of De La Rue.

'Over the last six months we have conducted a thorough review of our strategy and market positions. In the light of the UK passport decision, we have concluded that we will refocus our identity business on the supply of higher margin security features and components.' 'We believe we can continue to drive cost efficiencies across the Group and achieve growth in Security Features, Polymer and PA&T. We expect our PA&T business to double in size within the next three years.' 'We maintain a strong order book and pipeline which provides good visibility for the second half of this year and into next year. With good revenue coverage from the Group's 12 month order book of £365m and based on the orders planned for production and shipment in the second half, we are confident that we will meet our expectations for the full year.' At 9:04am: (LON:DLAR) De La Rue PLC share price was -11.5p at 450.5p

Story provided by StockMarketWire.com
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