De La Rue Share Discussion Threads

[kooba] 20/12/2023 09:12

The Times commentMoney talksProof that shareholder activism works. When investors ganged up in April to force out chairman Kevin Loosemore, De La Rue had just delivered its fourth profit warning in 16 months. The big worry? That without a change at the top, the banknote printer would loosemore money. In came Clive Whiley. The share price since then? Up from 40½p to 77p, even allowing for a 5 per cent dip on the half-year results.Yes, the business, in which activist investor Crystal Amber holds a 17 per cent stake, still lost £16.8 million pre-tax. Yet there are clear signs of progress. Net debt of £82 million is better than the £100 million guidance, boosted by an operating cash inflow of £15.4 million versus last time's £2.8 million outflow. The currency order book has doubled since September to £220 million. And the pension deficit's actuarial valuation is down to £78 million.Whiley found a group "struggling to balance conflicting stakeholder objectives", with £3 million of adviser fees "suffocating" recovery. He says he provided "air cover", allowing the other Clive - chief executive Clive Vacher - to focus on operations. Whiley also hints at better to come, with the results a "springboard to optimise the underlying intrinsic value of the business", even if De La Rue denied that was code for luring a bid. Whatever, it has no longer got such as big a licence to lose money.

[kooba] 20/12/2023 06:20

https://www.investorschronicle.co.uk/news/2023/12/19/de-la-rue-posts-better-than-expected-profit/Pretty down to earth comments...just hope the strategic value trumps the fundamental negatives sooner rather than later.

[kooba] 19/12/2023 08:31

Actually just a reiteration of full year estimates as I said.'The above underpins the Board's reiteration of full year guidance: adjusted operating profit of early GBP20m range and net debt in the mid GBP90m range.'Enjoy.

[babbler] 19/12/2023 08:02

Actually better than they said.Pension payments reducing andAdjusted operating profit of GBP7.9m (H1 23: GBP9.3m) ahead of previous guidance of breakeven. Enjoy.

[kooba] 19/12/2023 07:35

Solid and positive on currency side order book..but only a reiteration of full year.The Chair comments interesting on where the company was and now is in terms of sorting out the balance sheet and pension liabilities.On the recovery track and it looks like a tighter grip on external advisor fees now the finances are on a more stable footing.After the run up not sure there is much to go for on last nights close...but from a corporate point of view the strong recovery in currency order book and contract wins again makes the business more attractive to take over interest,

[masurenguy] 19/12/2023 07:04

2023/24 half year results

De La Rue announces its half year results for the six months ended 30 September 2023.

Highlights

-- Adjusted operating profit of £7.9m (H1 23: £9.3m) ahead of previous guidance of breakeven. IFRS operating loss narrowed to £3.4m (H1 23: £12.6m).

-- Authentication revenue rose 5.7% to £48.1m (H1 23: £45.5m).

-- Currency revenue reduced 2.6% to £113.4m (H1 23: £116.4m).

-- Net debt of £82m (H1 23: £82.4m) in line with the October 2023 trading statement and ahead of previous guidance of £100m; Operating cash inflow of £15.4m (H1 23: outflow of £2.8m).

-- Banking facilities extended to July 2025; RCF limit reduced to £235m (from £250m).

-- Pension situation improved and contributions reduced: Deficit per actuarial valuation now £78m (versus previous remaining contributions of £84.7m). Deficit repair contributions moratorium continues for FY24; thereafter contributions reduced to £8m annually from FY25-FY27, saving £28m over that period; FY28-FY31 contributions then increase to clear deficit by December 2030 (from March 2029)

-- Currency order book increased over 100% since September 2023 period end, to £219.8m, with very high win rate since beginning of FY24, in a recovering market.

-- Multi-year Authentication contract extension secured on improved terms; in latter stages of settling a further significant GRS contract extension.

-- Authentication guidance of £100m revenue for FY24 reiterated.

-- The above underpins the Board's reiteration of full year guidance: adjusted operating profit of early £20m range and net debt in the mid £90m range.

Clive Whiley, Chairman of De La Rue: "The interim results represent demonstrable progress with adjusted operating profit ahead of guidance, lower net debt, pension deficit repair contributions reduced by £28m over the next three years, significantly enhanced contract win rates and renewed confidence within the management team. The Board is determined to utilise today's market update as a springboard to optimise the underlying intrinsic value of the business, for the benefit of all stakeholders, on which the company will provide an update before 31 May 2024."

[kooba] 18/12/2023 17:08

Well someone wanted in ahead of the results tomorrow leading to a strong close..let's hope they know what they are doing !

[babbler] 18/12/2023 15:01

I'm sure results tomorrow will enlighten the situation.

[wigwammer] 18/12/2023 11:56

Bit odd to believe that a takeover is more likely now than 6-12 months ago - the share price has doubled adding £70-80m to the price tag. That's nearly the value of the debt itself, which is also rising... Nor is it clear why a buyer with deep pockets would have been concerned by the debt covenants in the first place. That's one of the benefits of having deep pockets.... Fingers crossed we see further evidence of recovery, certainly did the job in June :)

[kooba] 16/12/2023 16:55

Yes there have been some false dawns in terms of recovery under the last Chair only to see profits slump back again. My guess would be there is more care around managing expectation now and there is more room to surprise on the upside so maybe the results will please.A stand alone fundamental value would in my opinion still take several years to equate to what might be achieved in a sale of the company in the near term.If there are further signs of recovery with the results one could see an exit well over 100p especially if there are competitive bidders which could well be the case..which might prompt a knockout offer.The value of the now cleaned up business to industry is far greater than the market would afford.

[mickyl] 16/12/2023 13:01

Kooba, for what it’s worth I agree with you and recovery under the right management, and it remains far from certain that this is the right management, would be the best outcome for this institution but not necessarily for the shareholders. Crystal Amber will already be in contact with potential buyers no doubt and they will have an exit number already built into their projections. They have to dissolve the fund and return cash to their shareholders in a timely manner so they will he going all out to secure an exit. I think the new chairman has done well so far if it was him behind the relaxing of the covenants but the upcoming fundamentals will he key and I’m hoping for slightly better than expected results.
Forecasts going forward need to be on the prudent side. Best to under forecast than over forecast unlike the muppets that went before.

[nigelmoat] 15/12/2023 17:42

Quiet board stocks as we have here are the best investments. A waiting game!

[kooba] 15/12/2023 17:39

Now that the pension situation is pretty well sorted and the balance sheet and debt position not so precarious the chances of a takeover must be far more likely ..I'm sure the business could recover pretty well over the next few years but if the right price was offered short term and maybe resulting in a competitive bid situation it would be difficult to refuse...currency is a sector where there needs to be some consolidation.Company has been tweeting some small polymer notes launched ..it all adds up and it appears polymer is maybe gaining some traction.

[mickyl] 15/12/2023 13:07

The trade statement the 19th hopefully holds more good news. I definitely think there is a step change coming in the future as long as the fundamentals are right.
I agree with the Crane currency take over potential. DLR would be a great fit.

[nigelmoat] 15/12/2023 11:00

Share price here been quietly progressing back up here lately. More to come and very cheap as an acquisition target imo.

[r9505571] 07/12/2023 18:25

https://www.bbc.co.uk/news/business-67636571.amp

[kooba] 28/11/2023 14:42

For anyone interested in authentication division link on X invite to eventhttps://x.com/delarueplc/status/1729181788923212029?s=61&t=s79RLRddG_Gfl7VpUZvZpQ

[jensen10] 11/11/2023 08:33

Just read the latest earnings transcript for Crane Currency, large US competitor of DLAR. CEO repeatedly mentions they have a strong balance sheet and low leverage and are actively looking at M&A in early 2024. They have up to $1bn of firepower and mentions their authentication and track and trace division as a growth opportunity earlier in call. Maybe watch this space....

[wigwammer] 28/10/2023 21:32

So between April and end June this year the company recognised a material recovery in its end markets, providing lenders/trustees with a tangible reason to agree terms. At last a convincing explanation. Of course, not a narrative that will satisfy those who prefer to blame and point the finger, but the one predicted by several posters here around 6 months back (to much derision)... atb

[kooba] 28/10/2023 18:10

The results came out with the renegotiation of bank covenants and pension trustee that went to the wire 6 weeks after the new Chair was appointed.And well after I was raising just concerns over the finances.The trading update mid April was the third profit warning from the company on the trot and offered little comfort on the finances or the company's ability to get any relaxation on covenants.Loosemore had negotiated an extension of the facilities last year but had failed to get the covenants relaxed then leaving the company crawling back to ask for help as trading deteriorated.Doesn't matter how some folk view thing in retrospect the company was not in a good position when Loosemore walked and many shareholders not just CRS had lost faith,Seeing a number buying in and a new investor shows they are backing the new broom and the stabilisation he has brought.

[wigwammer] 28/10/2023 15:30

I also note that the announcement of agreement with lenders/trustees was made through the FY23 report at end of June. The same day the company announced encouraging signs of recovery in the currency market, confirmed that authentication was on track to exceed £100m+ sales and reiterated operating profit guidance. The large spike in volume was bought into not only by CA, but by other institutions too, including aberforth adding a 5%+ stake. So the price recovery has been driven by multiple factors - not least the anticipated recovery - and by multiple parties. The story that it is all driven by CA and Whiley is just kooba crow barring facts to his desired narrative. In fact, we can have a pretty good stab that the main driver of the agreement with lenders/trustees was that recovery was on the horizon... ATB

[wigwammer] 28/10/2023 15:02

Latest guidance from October trading update : "Net debt for full year FY24 is now expected to be marginally better than previous guidance, in the mid GBP90m range."... so not the £90m kooba just stated, and materially up from the £83m reported at end FY23.

[kooba] 28/10/2023 14:22

'FY23 end-of-year net debt at GBP83.1m; in line with expectations (GBP88-92m) after early-April final Portals exit payment'Oct trading update for half year.Net debt is expected to be improved versus previous guidance, in the low GBP80m range.*Guidance was that full year adjusted operating profit for the Group would be in the low GBP20m range for the full year and broadly break even for the first half year. Net debt would rise to around GBP100m at both half and full year.So debt position has been updated to considerably lower than previous guidance given to the market for half year...the new guidance was for £90m at full year. A material positive change in debt expectation for a company of DLAR market cap.I'm sure analysts are aware of this positive development and it is factored into informed consensus.

[wigwammer] 28/10/2023 13:34

The reality is I'm sitting on a 50% profit here, which wouldn't exist if I acted on your posts from 6 months ago. I very much hope no one did. In the latest version of "kooba reality" the balance sheet has been "rapidly sorted", despite the fact that debt continues to build. Possibly a suggestion that consensus expectations are a little ahead of themselves. ATB

[kooba] 28/10/2023 11:36

repetitiously and aggressively ...Think that's your playbook matey..and you address none of the valid points made.Going to end this boring stuff as you obviously are intent to dragging over some slight you seemed to take many months ago and now can't see the reality of the situation.Best of luck..