De La Rue Share Discussion Threads

[rochdae] 01/6/2009 13:07

Me too, bought in today. Nice results with a good divi. Can't understand the drop.

[wendsworth] 29/5/2009 22:02

Interesting that Capital Research and Management have taken advantage of the past week's weakness and increased their stake in DLAR to >15%.

[wendsworth] 28/5/2009 16:45

more-coffee and V11SLR: Thanks for your contributions.

Last week's UBS downgrade level 'met' today. See this recovering to the 900p+ level pretty quickly as institutions look to pick up the dividend together with the rise back up. 'Easy pickings' ....for them!

[v11slr] 28/5/2009 08:48

I can't pretend I'm not disappointed with the share price performance since the results but still consider this to be a core holding in the portfolio. A break below £8 may cause me to change my mind though. If you look at a 4-year chart it puts the current (short-term?) decline into better perspective.

[more_coffee] 27/5/2009 15:26

Yes wendsworth, I agree. I have been watching this for a while and went in today at 8.42 as I thought that represented good value. Looks as though ones money is safer here than in a lot of other places. Purchased as a long term holding for my SIPP - I have the feeling one can't go too far wrong with this share at this price! But as always DYOR. Good luck

[wendsworth] 27/5/2009 14:59

V11SLR and jenny5 : Just bought in for dividend of 27.4p . On fundamentals these now look ridiculously cheap. Any views? Quiet BB which I prefer.

[jenny5] 21/5/2009 14:59

from the times :-
De La Rue

The returns on cash on deposit are paltry; the returns on printers of cash are somewhat better. At least, that is true in the case of De La Rue, the FTSE 250 banknote specialist, which, having handed back £460 million to shareholders last year after the sale of its cash systems division, yesterday declared an above-forecast 92 per cent rise in its full-year dividend.

The figures were the first to be delivered by James Hussey, the new chief executive, and although the company lacks the restructuring potential that his predecessor inherited, its attraction remains intact. Despite decades of predictions of the demise of paper currencies, it is a niche that continues to prosper. Sales at De La Rue's banknote division, which accounts for more than two thirds of turnover, were up by 6 per cent, but operating profits rose by 25 per cent, showing the benefits of greater capacity utilisation.

Furthermore, the company has retained its printing contract with the Bank of England for a further five years. The underlying draw is that the steady outsourcing of banknote production from central banks to the private sector appears irreversible, a move demonstrated by the European Central Bank, which plans to put euro notes out to tender in 2012.

There are racier investments. De La Rue is essentially a steady, low-growth business. However, barriers to entry are high – not least given De La Rue's trusted counterparty status – its balance sheet unburdened (net debt of only £33 million) and, appropriately, its cash generation extremely strong. Contract wins for its identity systems division would provide an additional fillip.

At 908½p, or 12 times current-year earnings, and yielding 4.5 per cent, the shares should be locked away by long-term investors. Buy.

[v11slr] 16/3/2009 23:15

Rumour of the day

De La Rue, the printer of banknotes, fell 9p to £10.12 amid speculation about whether it would mount a bid for the Royal Mint, if the rumoured sale of the coinmaker goes ahead. Panmure Gordon said that the group would be in pole position, should it be interested, with a client base that would enable considerable cross-selling.

[v11slr] 14/3/2009 12:46

BANK note printer De La Rue has announced it is creating 70 new jobs in the North East. A boom in foreign currency printing, particularly in the developing world has seen the international firm continue to grow healthy profits despite the recession.

Now the currency manufacturer is looking for new employees to literally help it 'make money'.

A date for recruitment has yet to be set but the company has confirmed all of the positions will be in production and based at its Gateshead plant, in the Team Valley Trading Estate.

The new workers will mean the FTSE 250 company grows its complement of staff at the site by 40%, from 170 to 240. The move follows an impressive show in its interim results last year.

Head of Corporate Affairs Gary Williams said he was delighted to announce the new posts at a time when many firms across the country are continuing to struggle with the recession.

"We do actually want people to help us make money, that's what we're recruiting for," he said.

"We're delighted to be able to provide these jobs. Anything like this is of benefit to the economy.
"The money we produce is largely for the developing world, who have continued their demand for bank notes. This is why we have enjoyed such healthy growth as a business. Demand for notes is driven by a number of factors, re-issuing, growth of an economy, and particular in the developing world the installation of ATMs. At De La Rue we consider ourselves very fortunate to be in the position of growing our business when so many people around us are experiencing difficult times."

In November last year the company announced pre-tax profits of £49.8m for the six months to September 27, a 23.9% rise on the same period last year, indicating the strength of it's growth.

MP Dave Anderson, whose constituency includes the Team Valley, was delighted so see De La Rue reinvesting its success in the area.

Mr Anderson said: "This would have been good news at any time but the timing could not be better. De La Rue is widely admired for the quality of their work and this clearly affirms the faith they have in the workforce in this region."

[fast investor] 13/3/2009 13:49

Anyway back to the stock and more specificaly the chart.

After a sideways trending range for over a year we have now broken out positively to the upside and although at first it was a little too fast for my liking we now sit on the bottom line of a uptrend channel and should go from strength to strength from here now that the earlier froth as been cleared....

[fast investor] 13/3/2009 13:44

Follow it logicaly through Ian, of course Q easing means more notes in circulation.

I understand what your point is but the fact is the end game ends with more notes flowing through the system.

[v11slr] 11/3/2009 18:36

One way to cut back on spending in a recession is to use cash more rather than credit cards. The more banknotes are used the sooner they wear out and need to be replaced. I wonder if DLAR are seeing any effect from this.

[phooey] 11/3/2009 18:26

Even if you increase money supply electronically by quantitative easing surely it must increase the need for banknotes in circulation. One thing for sure even with a recession/depression bank notes have a short life and always need printing there will be no down turn in that.

[phooey] 11/3/2009 16:50

Just looks like it's performing it's usual recent trend pattern. Doesn't seem to be affected with what the FTSE or Dow does daily. Good strong company which shouldn't be affected by the down turn..

[jeffian] 11/3/2009 14:07

"Fast Investor - 11 Mar'09 - 12:28 - 95 of 96

This should be good for the company....."

Why?

[fast investor] 11/3/2009 12:42

Bank of England to boost money supply today
By Lee Wild

Date: Wednesday 11 Mar 2009

LONDON (ShareCast) - The Bank of England will effectively start the printing presses today as part of its £75bn programme of 'quantitative easing' to boost the British economy.

It wants to buy as much as £2bn of gilts, or government bonds, from institutional investors such as pension funds.

The idea is that the central bank gets its new money into the system and into the banks, which it hopes will then lend more to cash-strapped companies and individuals.

That auction is set to start at midday, with a second due at 2pm, this time for the banks themselves.

Today's action comes less than a week after the Bank of England confirmed it would begin a £75bn programme of asset purchases and that it had permission from chancellor Alistair Darling for another £75bn if needed.

It's the first time the policy has been tried in the UK and some are calling it the last throw of the dice to save the country from an even deeper recession.

Interest rates have already been slashed to their lowest in the central bank's 315-year history, leaving little room for further stimulus from rate cuts alone. Borrowing costs fell another half point this month and are down from 5% last October.

Auctions will now take place every Monday and Wednesday, with results published on the Friday.

It could take up to three months to carry out the programme, according to a statement from the Bank released last Thursday.

But the move has angered some. Ros Altmann, an independent policy adviser, explains that the plan to get the institutions selling gilts to invest the money in UK company debt instead, "is not going to happen!"

"Institutions will switch to overseas debt or top quality bonds, but will not put much into smaller companies who desperately need the funds," he says.

"Whoever is advising the government on this simply does not understand how institutional investors operate."

[fast investor] 11/3/2009 12:28

This should be good for the company.....

7:37 AM In a move that will likely be closely watched by its U.S. counterpart, the Bank of England launches its £75B Treasury note buyback today

[fast investor] 11/3/2009 12:28

Was due a pull back today and looks like a buying opportunity here.

[phooey] 05/3/2009 16:12

If they do print for Zimbabwe we're on to a winner and long live Mugabe.

Yes I understand (simple understanding that is) that it is not just about printing money as you say but surely if they are freeing up the system then shouldn't this produce more physical cash in the market place which would need to come from somewhere or am I being simple.. probably...

[jeffian] 05/3/2009 15:37

Phooey,

Like you I stand to be corrected but I think that the term "prints new money" is a lazy shorthand for the process rather than a description of what actually happens.

"What is quantitative easing?
The act of a central bank creating money in order to buy hard-to-sell assets from banks and companies. The money boosts the firms' coffers and lets them plough cash into the economy as they spend or lend.

Is it the same as printing money?
The BoE does not actually print more money to pump into the economy, but the effect is the same. What will happen is that the Bank will create the money to buy the assets and credit the reserves of various banks and financial institutions with the new money. The increase in banks' reserves should allow them to go out and lend much more under the "money multiplier" principle."

As I understand it, the banks are afraid to lend you, say, a mortgage because they are not sure that they have the resources if their existing loans turn out to be 'toxic'. BoE pumps in new money to cover 'toxic' assets and, hey presto, the bank grants you your mortgage - but you don't go and collect it as £10 notes in a wheelbarrow! I think 'notes in circulation' is what you are thinking of, an increase in which may help DLAR. Mind you, they probably print the stuff for Zimbabwe!

Regards, Ian

[phooey] 05/3/2009 10:27

Jeffian

As I understand it Quantitative easing is a tool in which BoE or any central central bank floods the market with cash in an attempt to stimulate an economy. Effectively meaning that the central banks prints new money in order to increase the supply.

I also read that De La Rue would be well placed because of this happening around the world so put two and two together

However this is only my understanding and very simple and am open to be corrected

[jeffian] 05/3/2009 09:54

Phooey,

I'm sure I'm not alone in not really understanding how "quantitive easing" works in practice. I understand the general concept that the BoE simply increases the supply of cash to soak up 'toxic assets' and free up more loan capacity in the retail banks, but does this actually involve printing physical notes? I doubt it, but it would be interesting to hear from anyone who actually knows.

Regards, Ian