De La Rue Share Discussion Threads

[imastu pidgitaswell] 24/1/2022 21:13

1912 - I basically agree. The mark-down was too much.

I just didn't have any spare funds - but I think even if I had, I would probably have waited for the dust to settle. But anything at 110-115 is and will stay a very good price, imho.

I was always positive about the company - less so about the selective posting of a certain poster; there were reasons to be cautious, as we have seen. From here, from this price, I am (more or less) very keen.

[gargoyle2] 24/1/2022 19:40

Vacher and the FD need to be seen to be buying at this level imo, if they are to retain any credibilty after telling investors 2 months ago that the company would report in line results -- although, having said that, they did use the old 'in line with the Board's expectations' (weasel words), rather than market expectations).

[masurenguy] 24/1/2022 16:09

De La Rue struggles to keep up with its turnaround plan

The turnaround of De La Rue has been delayed by about a year and profits have been hit as the banknote printer struggles with staff absences and supply chain problems. Shares in De La Rue slumped by 27%, or 40¾p, to 109¼p, their lowest since May 2020. Increased commodity and energy costs and supply challenges have intensified, with the Omicron and Delta variants causing “substantially increased” employee absences in its manufacturing facilities. This has led to lower output this year. It is also suffering from supply chain shortages of chips and other raw materials and cost inflation. The chip shortage has disrupted a contract to supply polycarbonate datapages, which have biometric chips embedded, for the next-generation Australian passport. It has meant the loss of a “significant amount of production” in its fourth quarter.

De La Rue now expects adjusted operating profit for the year to March 26 to be “broadly similar” to its last financial year in the range of £36m/£40m, versus market expectations of about £45m/£47m with net debt expectations unchanged. De La Rue still expects to “continue to deliver significant growth year on year” and said that adjusted operating profit growth in its two core businesses of currency and authentication was still in the range of 35%/45% from the £27.5m delivered by the two businesses last year. It also still aims to pay a dividend in the next financial year.

Clive Vacher said: “This is not a case of wheels coming off and the turnaround plan isn’t working. It is an unfortunately logical impact of the external forces that have come to play since analysts’ expectations were set. The issues are still around us and nobody knows what’s going to happen with Covid and new variants or it might just die down and that’s the end of it, essentially, and we learn to live it with it and we’re back to normality. And equally well with the supply chain. Is that going to sort itself out and over what time period and in terms of inflation and energy costs, are they going to ease?”

[farnesbarnes] 24/1/2022 14:40

Is the Rebel still in DLAR?

[aringadingding] 24/1/2022 10:26

Rough numerical analysis here:

Let's say the prior market expectation of £46m adjusted operating profit would have become an EPS of 17p, after interest and tax. If this was to grow at 15% for 5 yrs then have a terminal value calculated with ongoing growth of 4% only, you have to input the discount rate as 18% for the share price to be 150p. That is already quite a healthy discount rate.

Now let's imagine that whole EPS profile shifts to the right one year, and the coming year is 13p EPS not 17p. Still 5yrs growth at 15%. You then have to assume a discount rate of 21% for it to end up at 109p/shre.

Looking at that picture I think the main question is do you believe the profits growth is going to happen? Well for me polymer and authentication are both growing markets, and those growth projections are not really that sky high. 17p increasing at 15% for 5 yrs is still only 34p. So we have a well managed company established in growing markets... It does seem possible to me.

Having said that, it seems fair to say the background music to this stock is fairly sceptical and so the market probably does need to see a few 'halves' (i.e. half-years) of real profits growth before believing and valuing accordingly. Hopefully management will just get their heads down and deliver the plan.

[imastu pidgitaswell] 24/1/2022 09:50

Tend to agree - I would happily buy in at these levels, if I had some spare funds....😳

Might also wait a few days to see what the overall reaction from larger holders is though.

[imastu pidgitaswell] 24/1/2022 09:31

Unfortunately that is operating profit. Profit after interest and tax will be more like £25m. Still cheap, but given the uncertainty I can see the logic in the current price.

Bear in mind this level (110p - currently just below) was the 2020 placement price, so some recent support.

[imastu pidgitaswell] 24/1/2022 08:40

Wot the charts and TA that you employed on VLX in 2019?




Berk.

[buywell3] 24/1/2022 08:36

This is why you need to learn about charts and TA



buywell3 1 Dec '21 - 21:18 - 1820 of 1901 Edit


RSI imo would indicate that in a falling market eg if the USA drops lower --- then the previous chart low looks like being retested

We look like being in the start of a wave 3 down for you Elliott guys






120p support is key now imo




Chart has just had a death cross



dyor

[imastu pidgitaswell] 24/1/2022 08:35

I think you can tell I was hardly following him - I was trying to get him to stop lying.

Yes, we all know that you make your own investment decisions and calls - but blatant ramping and selective posts about the business, the landscape and the poster's own positions (just how many times did he buy these, yet always had an overall position. just above the current price?) is something to apologise for - some people are influenced by stuff on here.

(buywell you muppet - I don't hold any of these; I did rather well out of them in 2020...)

[buywell3] 24/1/2022 08:32

buywell3 12 Nov '21 - 00:01 - 1739 of 1900 Edit

You rampers must be seeing something here that buywell missed

[purplepelmets] 24/1/2022 08:18

oh dear what a mess

[masurenguy] 24/1/2022 08:15

Nobody has to apologise - everyone makes their own investment decisions and judgement calls. If you just follow the advice of a totally anonymous poster, whether they are positive or negative on a stock, then you only have yourself to blame.

[shanklin] 24/1/2022 08:10

So, how long have DLAR known about this. Its not like they magically found out about this huge profit miss late on Friday afternoon.

[imastu pidgitaswell] 24/1/2022 07:51

So, Volvo, are you going to apologise for your farcical and uninformed ramping on here, despite many occasions when the risks and your (let's be kind) overoptimism and ignoring of obvious potential negatives were plastered here on a daily basis?

[nobilis] 24/1/2022 07:29

There was no leak on Friday. It just tanked for no reason. Nothing to see there.

[nobilis] 24/1/2022 07:17

Profit warning

[masurenguy] 24/1/2022 07:08

An unfortunate profit warning, undershooting by circa 17.5%!

TRADING AND TURNAROUND PLAN UPDATE
De La Rue announces a trading update on the Financial Year ending March 26, 2022, and an update of progress on the Turnaround Plan.

At the time of the Half Year results, the Group referenced the increased commodity and energy costs, and challenges in the supply chain. Since then, the significant headwinds, primarily relating to the Covid-19 pandemic, have become more pronounced. The Omicron and Delta variants have caused substantially increased employee absences in our manufacturing facilities globally, which will result in lower total operational output for the full year. More recently, the Group has also been affected by supply chain shortages in chips and other process raw materials and has experienced a degree of supply chain cost inflation.

As a result of these external factors, the Company now expects adjusted operating profit for the full year to be broadly similar to last financial year, in the £36-40 million range, versus market expectations of approximately £45-47 million( (1) . However, net debt expectations remain unchanged. This revised outlook still demonstrates substantial year-on-year growth in our two core businesses. The outlook for Currency and Authentication represents adjusted operating profit growth in the range of 35-45%, from the £27.5 million delivered by the two businesses in FY2020-21.

The global impacts that were not present at the time the Turnaround Plan was announced in February 2020, can be described as manifesting approximately a 12-month delay to the Turnaround Plan results, as the Company's leadership work to mitigate them. In addition, we see these factors continuing as incremental headwinds into financial year 2022-23, with the effect of slowing the Company's adjusted operating profit growth profile. However, we do expect to continue to deliver significant growth year on year, despite this external environment.

The Board retains full confidence both in the Turnaround Plan and in its execution. There is no change to the elements of the plan: the growth areas of Currency, driven by the continuing and accelerating trend of conversion to polymer, and Authentication, driven by increasing demand for digital and physical solutions for governments and corporations, remain strong and in line with the Plan's expectations. The Company is also intensifying its efforts to deliver further efficiencies and cost reductions, to mitigate some of the factors described above.

Clive Vacher, CEO said "Despite the macro challenges that are delaying aspects of the Turnaround Plan, De La Rue continues to increase adjusted operating profit in both divisions year on year, and the Plan anticipates this to continue going forward. While this trading update is disappointing, it should be seen as a delay to reaching our Turnaround Plan objectives, rather than indicating that a change of direction is required. The Company's leadership has worked hard to mitigate many of these external effects, with the cost reduction activities we have implemented since early 2020 having a significant impact in supporting our underlying performance while we navigate these external factors. The markets in which we operate, and our position in them, remain strong, and we continue to execute substantial investment for the future."

De La Rue expects to announce its results for the full year ending 26 March 2022 on 25 May 2022.

[volvo] 21/1/2022 08:40

More positive news this week, overseas markets for polymer are really never ending,

19th Jan
The trend towards polymer banknotes continues, with more new banknotes and series being issued on De La Rue's SAFEGUARD® in 2021. Email [e-mail] to find out more

20th Jan

[volvo] 19/1/2022 10:11

Agnes yes, you would imagine Vacher and Loosemore should be all over this.

[agnes] 19/1/2022 09:17

Last week, Crystal Amber had no trouble selling 7.5% of Equals, then a £120 market cap and much less liquid than DLAR. The reason- a strong trading update. They'd be massive institutional interest in DLAR if Vacher can show confidence and some orders.