Specialist printing firm De La Rue Plc has seen profits increase for the year ending March 31 due to strong growth at its payment systems division and the underlying strength of its traditional security printing business. Turnover rose 34.7% to UKP559.5m, while pre-tax profits grew 34% to UKP104.7m – this was higher than analysts’ expectations of between UKP94m and UKP104m. But profits were boosted by one-offs such as the sale of the London-based group’s Colombian business for UKP1.8m, and extra profits from German subsidiary, Garny AG – it has now raised its stake from 62.4% to 93.1%, which has reduced minority interests in earnings from UKP2.8m last time to UKP1.8m this. A further UKP2.4m came from the movement of exchange rates, while the group’s share of profits from associate companies also rose to UKP11.9m in 1993 from UKP7.3m in 1992. However chairman Lord Limerick reckons that during the coming year, income from these associates will mainly be determined by demand for banknote machines from De La Rue Giori. A 24.4% increase in earnings per share to 38.8 pence, combined with a continuing strong order book, has led the board to recommend a final dividend of 13.15 pence. Together with the interim dividend, this makes a total of 17 pence – a rise of 13.3% on the previous year. Shareholders will be offered a scrip dividend alternative. The group now generates some 91% of its turnover outside the UK and Ireland. Some 48% of the total comes from Europe and a further 20% from the Americas. The single largest business is payment systems, which contributed 59% of total sales and 46% of operating profit, compared with 48% and 36% respectively in the previous year. Margins here also improved during the second half to 11.7% from 10.5%. This totalled 11.1% for the year, but was down on last year’s figure of 11.7%. Revenues from the security printing division increased 13.6% to UKP231.2m, and operating profit rose 6.5% at UKP42.9m. Margins increased during the second half to 19.3%, giving 18.6% for the year. But this was also down on the 1992 figure of 19.1%. Finally, net cash balances increased UKP59.4m during the year to UKP171m, almost entirely due to cash generated from within the various businesses. Although Lord Limerick is confident earnings will continue to grow in the year ahead, the major determinants of our trading results, he reckons, will be resumption of growth in capital spending by commercial banks in the UK and the US, conversion of orders from the strong order book at our German operations into sales, and continuing strong demand for our banknote and other security printed products worldwide.
