De La Rue Share Discussion Threads

[imastu pidgitaswell] 24/11/2021 08:24

They're OK - but no more than that. Some of the cautious words about headwinds, including supply chain continuity, covid restrictions, other challenges won't help.

In terms of numbers - they're in line, but as I kept saying on here, in line doesn't mean positive EPS impact because of the additional shares:

"IFRS basic earnings per share ("EPS") increased by 390.0% to 4.9p (H1 2020/21: 1.0p) reflecting higher profits in H1 2021/22 compared to H1 2020/21, offset by the higher weighted average share numbers (H1 2021/22: 195.2m, H1 2020/21: 149.6m) post the equity raise. The adjusted basic EPS decreased by 1.5% to 6.4p (H1 2020/21: 6.5p), reflecting the higher weighted average number of shares."

You can do the numbers in £'m or in EPS. In £'m, PBT pre-exceptional - of £14m (they don't actually state that number in the main pages, but that's what it is) means full year of what, £30-35m - optimistically? Less tax = £25-£28m - for after tax earnings. Market cap of £312m (number of shares is 195m) means a multiple of 11-13.

About right for this stage of the plan. If they get it (the execution of the turnaroud plan) right, it could (and should) do very well. But a lot of bridges to cross before then.


(Incidentally, the pension scheme wasn't an issue for me before piling in at 40-45p; the position was quite stable then and obviously remains so now - for the company, the agreed payments continue for the time being, so it remains a minor factor.)

[unnavailable] 24/11/2021 07:56

All very positive on an adjusted basis. Headwinds might become more of a problem. Nothing scary in there, recovery remains on track.

[gargoyle2] 24/11/2021 07:53

Looks like there has been a slight delay in start up of the new polymenr production line (now operational 'early in Q4 this financial year', i.e. January, as opposed to 'towards the end of this calendar year', which has been the previous guidance). Plus some slight caution regarding impact of covid on authentication revenues in H2. Otherwise though, an pretty good read imo.

Will tune into the webcast at 9.

[jensen10] 24/11/2021 07:49

Good increase in operating margins in both the authentication and currency divisions from prior full year. Will feed straight into bottom line over time together with volume increase.

[volvo] 24/11/2021 07:49

Strong growth anticipated from Doubling Polymer printing capacity and the gradual doubling of Authentication capacity in Malta....neither factored in

[kooba] 24/11/2021 07:41

I've heard that the pension fund situation has been a sticking point in disposals or takeover of the company.I note the pension fund has moved into surplus..i am no expert in these matters but that a appears a positive and likely leaves the company more exposed to corporate interest i guess?

[volvo] 24/11/2021 07:31

Basically 100pc usage of its printing facilities and authentication booming....with the doubling of Polymer printing coming on right now....profits growing and company in a strong position pe of 7-8 2022-23....what the markets make of it should be very positive but who knows

[masurenguy] 24/11/2021 07:23

Looking very positive with increased PBT and substantially improved positive cashflow !

H1 2021/22 highlights

-- Adjusted operating profit from our ongoing divisions up by 165.6% to GBP17.0m (H1 2020/21: GBP6.4m)

-- Adjusted revenue for Authentication and Currency increased by 10.3% to GBP177.1m (H1 2020/21: GBP160.6m). IFRS revenue was GBP179.2m for the period (H1 2020/21: GBP182.6m)

-- Group adjusted operating profit increased by 13.7% to GBP17.4m (H1 2020/21: GBP15.3m), demonstrating strong growth from Authentication and Currency that more than offset the cessation of the UK passport contract. IFRS operating profit to GBP13.8m (H1 2020/21: GBP4.6m)

-- Turnaround Plan and cost reduction activities continue to strengthen performance versus H1 2019/20 and H1 2020/21, with minimal impact of COVID-19 due to the Group's response

-- Malta expansion announced, that will double Authentication production capacity and further enhance Currency manufacturing flexibility

-- Currency 100% banknote capacity utilisation in H2 2021/22 across all print sites

-- Polymer production volumes up by more than 90% versus H1 2020/21

-- Positive operating cash flow of GBP25.8m (H1 2020/21: GBP3.3m), with net debt reduced by 16.1% to GBP43.9m (FY 2020/21: GBP52.3m). Full year net debt outlook in line with the Board's expectations

-- FY 2021/22 trading to date has been positive and the outlook continues to be in line with the Board's expectations

Business update

-- Authentication continues to deliver good volume growth and is on track to exit the year at an annualised revenue run rate of approximately GBP100m.

-- Currency achieved 100% of available capacity in Banknotes in H1 2021/22 and expects full utilisation of Banknotes and Polymer capacity during H2 2021/22.

-- Continued investment in manufacturing capabilities with an additional Polymer line in Westhoughton and the expansion of Malta facility to grow available production capacity for Currency and Authentication.

-- We continue to monitor and work to mitigate headwinds in commodity and energy costs, and challenges in the supply chain.

Clive Vacher, Chief Executive Officer of De La Rue, said:"Our first half results have shown substantial improvement in the Group's financial and operational performance. We continue to make progress in executing our Turnaround Plan, which is delivering both operating improvements and cost reductions. These, coupled with our increasing market competitiveness, have resulted in stronger adjusted operating profit and excellent cashflows generated from operating activities. The results from our two ongoing divisions, Authentication and Currency, have more than offset the cessation of the UK Passport contract last financial year.

We are continuing to invest in Authentication and Currency in line with our Turnaround Plan. In H1 2021/22, we announced a substantial expansion of our facility in Malta that will increase manufacturing capacity and flexibility for both divisions. We will achieve this additionally without exceeding the original total turnaround investment of GBP79.8m. Our Polymer expansion plans in the UK, which will see a doubling of production capacity, are on track, with the new production line being operational early in Q4 this financial year.

We continue to monitor and work to mitigate headwinds in commodity and energy costs, and challenges in the supply chain. The De La Rue team has additionally overcome some COVID-19 disruption in H1 2021/22, and I am pleased that we have performed strongly despite these challenges. As a result, and based on Group trading for FY 2021/22 to date continuing to be positive, the outlook for revenue, adjusted operating profit and net debt for the full year remain in line with the Board's expectations."

[volvo] 23/11/2021 17:10

Yes maybe totally wrong and the directors are lying to me.....instead I prefer to let the BOE brief today on Britcoin and the inevitable doubts arise again. Fwiw I’ve nailed my colours to the mast at this level, I’ve won most, just saying

[spectoacc] 23/11/2021 16:31

So was HMV.

[volvo] 23/11/2021 15:37

All I'm saying is right now DLAR is very busy and very profitable with no obvious slowdown in sight

[financialfred] 23/11/2021 12:40

Volvo, so what you're saying is majority of de la rue currency customers now all developing or small island countries? Selling to countries and state banks a vanity item with shiny holograms, threads, foils and UV fluorescence

Even some of these countries are moving away from physical banknotes (for example Eastern Caribbean Central Bank, a customer of de la rue?)

If de la rue is doing so well, why have none of their competitors / rivals decided to buy them out or takeover with crystal amber offloading their shares in de la rue?

Even when the share price was ~50 - 60p (April - May 2020), nobody bought them out, surely that is a sign?

[volvo] 23/11/2021 09:05

ff your summing up exactly the markets perception of DLAR.

Except it’s presses are running 24-7. Uk without doubt is edging towards cashless, but it will take years for it to happen. How about Africa, or South Asia or east Asia etc for example? For these types and other areas cash is here forever, and DLAR print tonnes of it.

Tomorrow will hopefully restart things

[financialfred] 23/11/2021 08:47

Volvo, the future of cash is strong? Consumers hardly use it now (contactless, online banking, cryptocurrency) and even state / central banks will be switching to Central Bank Digital Currency soon...

[volvo] 23/11/2021 08:12

Results tomorrow with the future outlook....disappointed we haven’t seen a run up in the share price so far, but very confident the results will read very good....what the markets make of them is any guess. Company need to highlight the future of cash is strong.

[gargoyle2] 22/11/2021 21:32

Thanks AISHAH

[gargoyle2] 22/11/2021 18:24

Anyone know how to find Saba's current short position in DLAR?

[meijiman] 22/11/2021 17:07

Well there is that to be thankful for. The previous Chairman and ceo were complete mugs.

[gargoyle2] 22/11/2021 16:52

Crystal Amber today: "De La Rue is a good example of the time lag that exists between initiating an activist strategy and it bearing fruit. In 2019, the Fund provided regular updates on its view of the scale of past mismanagement at De La Rue. Exposing and highlighting these failings, accelerated the departures of the former Chief Executive and Chairman, allowing the new leadership to take the corrective action necessary to execute its turnaround. With underlying profits set to more than double and with consensus profit before tax for the year to March 2022 at £38 million, the Fund's "hard yards" have been completed and now the focus is on securing the strategic value of the shareholding. In this regard, the Fund's access to relevant parties is helpful."

I assume it was the company itself that has provided access to 'relevant parties'.

[gargoyle2] 21/11/2021 18:58

Pretty wild, yes :) Results Wednesday, so hoping this will push on after that.

[financialfred] 21/11/2021 06:58

Gargoyle2, the board members not dealing any of their de la rue shares in 2021, as maybe the company bought out or taken over this year? j
Just a wild theory...

[financialfred] 19/11/2021 18:05

ok let's wait and see