De La Rue profits rise 37pc

De La Rue reported a 37pc rise in annual pre-tax profits in a year in which the British banknote printer warned on profits and lost its chief executive.

The 201-year-old company, the world's largest commercial banknote printer and passport manufacturer, said profits rose from £43.7m in the previous year to £59.8m in the year to March 29.

Revenue increased 6pc to £513.3m and underlying operating profits gained 43pc to £90.5m. This is in line with revised estimates last October when it warned competition in its core banknote printing business would hit the prices it could charge and reduce full-year operating profits to around £90m.

De La Rue shares, which have fallen 14pc over the past year, rose 4.5pc on Wednesday - the biggest riser in the FTSE 250 in early trading.

Philip Rogerson, who stepped up to become executive chairman after the sudden resignation of chief executive Tom Cobbold in March, said: "De La Rue is in fundamentally better shape today ... we entered the new financial year with a good order book albeit reflecting the recent more difficult pricing environment in the currency market."

He said that despite pricing pressure due to overcapacity in the banknote paper market, expectations for the current financial year "remain unchanged". The banknote division provides 66pc of group revenues and 69p of operating profits.

Mr Rogerson, who will return to being non-executive chairman once a new chief executive is found, said the search was "well advanced".

Mr Cobbold quit to become chief executive of UBM, the exhibitions and publishing specialist in the middle of De La Rue's bid to retain the Bank of England’s note printing contract. De La Rue’s existing 10-year contract to provide all the Bank’s notes is due to end in April 2015.

Mr Rogerson said that while pricing pressure due to overcapacity in the banknote paper market remained, expectations for the current financial year "remain unchanged".

Investec said the results were "largely as expected" with higher profit margins - up 17pc - offsetting lower revenue. The broker raised its price target to 915p a share, saying the company had maintained its full-year dividend at 42.3p a share which provided a "sustainable yield of 5.3pc".

De La Rue will pay an unchanged final dividend of 28.2p a share on August 1.

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