De La Rue Share Discussion Threads

[cravencottage] 09/5/2021 14:10

Agreed

Crystal Amber/ Schroders have a a very good record of investing in " Turnaround situations" And it's no co-incidence Vacher was brought in to execute this.

Looking at the share price graph at top of this board if Clive can deliver the share price will gain traction and get back to previous 2012-2013 levels.

[aringadingding] 09/5/2021 13:45

Right ok. I got mine from the FT. I doubt they have not taken that into account, it seems more likely that the 18p you refer to includes some adjustments, for example adding back certain depreciation items or non-continuing items. It also may not be diluted. Anyway the details are not exactly fascinating in this area... End of the day even just using 15p consensus 2022 forecast it's 12x PE. Like I say if we take a 10 year time horizon then the company, if it is managed really well, ought to be able to grow, thus delivering both profit growth and re-rating.

[cravencottage] 09/5/2021 13:31

AD

EPS Numbers have been gleaned from ii Broker forecasts..

Perhaps they haven't factored in Rights issue/ Share dilution?

[aringadingding] 09/5/2021 13:13

CravenCottage, are you using some adjustments to EPS there for 18.1p EPS?

Spooky I agree that 12.85p/shre is the consensus for year to March 2021. Then 15.3p for year to March 2022.

Obviously we can get into loads of detail for both the numerator and the denominator for EPS but I will skirt that analysis for now myself...

Back of the envelope for me is if they get back to say £40m post tax profit, then with 195m shares (as per latest voting rights update) that's 20.5p/shre or PE of 8.8x. That's what it's all about for me. End of the day both currency (polymer/paper) and authentication are huge and growing markets and DLAR has a well established operating company to grow profits within these.

[dougmachin] 09/5/2021 12:59

SP literally back to where it was 1 year ago.
Certainly progress here, but for sure would like to hear more progress and 'hard' deals being done.
The excitement of the Covid passport now out of the share price ..?

[spooky] 09/5/2021 12:14

EPS expectations are for 12.85p ?

[cravencottage] 09/5/2021 12:11

18.1p EPS earmarked for 2021 so if things continue to turnaround DLAR hardly seem expensive.

Results due towards the end of the month so we'll hear more from Clive.

[aringadingding] 09/5/2021 11:39

Craven, good to hear that, thank you! Yes i mean re-reading the trading statement of 13th April i think the absolute most important thing is the positive trading versus management plans. Cash expenditure can be changed or evolve, that is life, but good underlying trading is what we need at the end of the day from a valuation and long term perspective and will also feed through to cash in a 3 yr timeframe i.e. turnaround timeframe, certainly. So yes the timeframe is tight in the sense that the company needs to get back on its feet in the next few years but signs are positive that this can be achieved. Overall this does seem an excellent buy right now... though full disclosure it is my largest holding at 10% of portfolio.

[cravencottage] 09/5/2021 09:02

Good write up in this week's Investors Chronicle..

Algy Hall highlights 4 growth stocks including DLAR.

The synopsis being that if Clive Vacher can execute the turnaround plan " Shareholders should be able to expect good upside"

"De La Rue is an interesting turnaround story, albeit one with a tight timeframe and noteworthy risk if management can't deliver"

Over to you Clive!

[dougmachin] 29/4/2021 13:29

THE END OF CASH? "NO!"
SAYS CLIVE VACHER
CEO OF DE LA RUE

De La Rue
@DeLaRuePlc
The Money Maze podcast provides direct, entertaining and insightful interviews with "masters of the real life money maze." Listen to their podcast tomorrow to hear our CEO, Clive Vacher, sharing his experience and perspectives on a range of topics. hXXps://hubs.ly/H0M9rpN0

[dougmachin] 29/4/2021 13:27

hXXps://moneymazepodcast.com/clive-vacher?utm_content=164219045&utm_medium=social&utm_source=twitter&hss_channel=tw-743477599800786944

[dougmachin] 25/4/2021 16:05

23rd April - Congratulations to our customers and to the talented De La Rue employees who helped design and manufacture 5 out of the top 7 banknotes in the International Bank Note Society's Bank Note of the Year Award. Thank-you also to everybody who voted.

DLR twitter worth following.

[jensen10] 14/4/2021 08:42

Simba. They raised 92mm net from capital raise last Jun. 80mm for cap ex and balance for working capital. So change in net debt is a function of how quickly/slowly they spend the 80mm vs forecast. The stated aim is to have net debt /EBIDTA at less than 1 turn of leverage. My view of 13mm write off is positive. Clean balance sheet up quicker than expected for next fiscal year and in line with aim of restoring a dividend which I believe can happen 18 months onwards after raise ie Dec 21. This company has a lot of operating leverage now given lower cost base

[abarclay] 14/4/2021 06:52

No contracts for Covid passport has upset folks here

[simba_] 13/4/2021 21:29

Can anyone help me understand the net debt situation here. It was 22m at the half year in Nov. .Today they say it's 53m and lower than expected. What's happened in between here? .I'm having trouble finding where they stated previously what level they expect net debt to be at for FY20/21

[aringadingding] 13/4/2021 18:05

Anyone got any views on why the market has disapproved of the trading update today?

My only theory would be: the net debt is less than expected but only because the capex is delayed, and delayed capex equals a delay in general which is a bad thing. That is total speculation and there may be another reason. It may just be profit taking I guess also.

@imastu I agree re. using the current number of shares and looking to total NI forward to 2021. However for a large, cash flow positive, stable company, with a good dividend record, and a growing underlying market, I would have to say that I think 11 or 12x PE is very good indeed. I appreciate that sometimes companies can be bought on better multiples than this, but really if the turnaround works and the projections come true, it is pretty great. Could also be a private equity target and there are various paths to growth in the coming say 10 years.

[imastu pidgitaswell] 13/4/2021 12:11

I'm always a little wary of people quoting Earnings per Share numbers after a placement mid year - the number for the year to 31st March 2021 will be a weighted average of the number before the placement c105m, and post placement c195m.

And therefore something like 170m (I don't have the precise numbers to hand, but they're of that order, with the average broadly 3/4 of the end of year total as the issue occurred at the end of the first quarter of the year).

But that 170m isn't the number to be used for 2021 - it's 195m.

Ergo I would much rather see total numbers (PBT, PAT etc) and do the calculation for 2021/22 EPS myself. Not saying they're wrong, but so much information available doesn't reflect the right number of shares.


(Like the comment they make about buying bombed out shares too early. Where were they at 43p?) 😉 And that the shares have lagged, when they quadrupled in 2 days...



180 looking a good support - this one has been so well-behaved in terms of support and resistance since June last year.

[zho] 13/4/2021 12:02

>>I don't have a feel for 2021 earnings>>

According to the 27/2/21 issue of SCSW, written when the share price was 157p:

A mistake made by countless investors is to buy bombed-out companies too early. One share I think has unmistakably turned the corner, however, is banknote printer De La Rue (DLAR; 157p). The year starting 1 April is the first when sales and pretax profit are expected to have recovered to decent levels but the shares have lagged. Numis is forecasting eps of 15.4p for the year starting 1 April with 20.2p the following year to drop the PE to 7.8.

[imastu pidgitaswell] 13/4/2021 09:45

Just thinking through the numbers - 195m shares (after the issue in June 2020) = £351m market cap.

Earnings pre exceptionals of £37m, say £28m after tax. I don't have a feel for 2021 earnings, but I don't think it would be a step change - maybe £30-35m after tax?

So around 10-12 times 2021 earnings. Excluding a lot of one time bad stuff still to come through.

Not very expensive, but not dirt cheap either. Turnarounds take time - in a few years this could be doing very well. But I don't see fireworks in the short to medium terms - not after last June's proper fireworks, when the price at 40p really was silly...

[nw99] 13/4/2021 09:31

Like the statement just continue to hold

[johnrxx99] 13/4/2021 09:18

But what do I know :-)

[johnrxx99] 13/4/2021 07:29

Yes, at first glances looks very positive. Like the debt reduction.