De La Rue Share Discussion Threads

[essentialinvestor] 08/1/2020 15:11

Bought back quickly from Monday's low.

[jias] 08/1/2020 11:25

Does anyone know what the 3 year performance related target is? I’d like to see at least a quadrupling of the share price from this miserable level before he gets anything. These targets are usually pathetically easy to achieve. I’m thinking how how Horta Osorio has been massively rewarded at Lloyd’s for a complete shifting of ordinary shareholders.

[cravencottage] 07/1/2020 17:32

Nice announcements today

Mr Vacher to be rewarded with 326k shares/ 3yr performance related target...….Plenty of incentive to see the cost cutting measures through and to turn the ship around etc.

Along with Brandes adding to their holding - Nice

I did notice a 40k buy go through after the bell over the offer too/ So maybe the market is finally waking up to the value of DLAR.

[cravencottage] 06/1/2020 18:16

Ah I See

An institution reducing their holding - hence a bit of short term weakness...

The story hasn't changed though..Director's buying / Crystal Amber doubling their holding etc...

Patience will be rewarded here.

[tradejunkie2] 05/1/2020 11:37

Where's that QuePassa chap gone LMAO?

[cravencottage] 03/1/2020 18:28

Too many institutions (Holding collectively more than 50%) involved with DLAR to allow this ship to sink notwithstanding Brandes. Schroders, Artemis and Crystal Amber who have recently more than doubled their holding....

On track and aiming to accelerate the three-year £20m cost reduction programme.

Sale of International Identity Solutions business for £42m completed on 14 October 2019.

"Between now and the end of calendar Q1 2020, we will complete a full review of the business and design a comprehensive turnaround plan for the Company. In the meantime, we have already identified and started to implement the urgent actions needed to stabilise the business and allow us to complete the review. With strong emphasis on cost control and cash management, coupled with a focus on innovation and reversing the revenue decline, we will become a leaner, more efficient Company and drive shareholder value."

All extrapolated from recent Interims and I would add the £42m wasn't received in time to make the accounts/coupled with the intiation of the £20m cost cutting regime- All point to better things to come.

I think once the implication of these figures begin to drip into the market via rns etc then the share price should rise in tandem.

Happy New Year to all

CC

[micha14] 03/1/2020 14:47

There is plenty to worry about. net debt went from 47m to 105m to 180m!+ There is a 39m pension deficit and a commitment to pay 23m per year towards the pension fund.
I have a position but am seriously concerned as DLAR is either going to do v well or may go bancrupt. However, the bank facility is 275, so they still have 97.5m to draw down in case they need so unlikely to issue new equity. MMM- not a comfortable stock this is...thoughts?

[cravencottage] 02/1/2020 21:25

Don't worry G E the market will wake up to the recovery story with DLAR at some stage......Meanwhile i'm sure after the kitchen sink job the CEO's done there's sure to be a trickle of good news just around the corner..

Keep the faith

CC

[galaxy enforcer] 02/1/2020 11:55

Opportunity to pick up further stock at 138p which I consider good value when they were selling at 148p on open.

[cravencottage] 31/12/2019 10:08

G E

Looks like you moved the market pal as we're going back up :=}

[galaxy enforcer] 31/12/2019 09:54

Added a few extra ones on the dip today.

Wishing everyone a happy and prosperous New Year

[essentialinvestor] 30/12/2019 22:58

Brandes usually an interesting name on a share register.

Most will be aware of their investment philosophy, if not:

[meijiman] 30/12/2019 19:35

got to like the strategy of bottom fishing/sniffing value!

[micha14] 30/12/2019 19:04

I would say the business is easily worth 300-500m£. On the balance sheet they are not accounting for the intangibles much, and its that barrier to entry. I hope delarue doesnt get taken over as to me it seems a business one could hold forever and there are very few of those around. It basically has no competitor in the UK!!!!! Charles Brandes is a partner with 9pc stake, which is pleasant.

[cravencottage] 30/12/2019 18:10

G E

Very hard to quantify based on sum of parts/debt etc..

All I can say is that Shroders bought a significant wadge @ 220p a share and as/when DLAR gets taken out institutions will have a huge input as to the takeout price..

Moreover, Crystal Amber have a habit of bottom fishing/sniffing value and backing takeout bids for a good profit for themselves...So ultimately a takeout bid well north of what Shroder's latest investment wouldn't surprise me.

[galaxy enforcer] 30/12/2019 12:00

Out of curiosity CravenCottage what would you guesstimate a fair take out value to be based on the sum of the parts?

[cravencottage] 30/12/2019 00:31

Micha14

I have to say if you and I were to set up versus De la Rue we'd lose hands down..

I've learned one thing from Jim Slater that resonates in this particular instance insofar as "Barrier to Entry".

Like yourself I've taken a position at @ 1.36 and ultimately see DLAR taken out by a Venture Capitalist Co once Clive Vacher has all his ducks in a row.

Too many positives not to be bullish with the state of play at DLAR.. Notwithstanding an MD that has invested his hard earned corn (along with colleagues) into the project coupled with an investment fund ( With Mr Bernstein at the helm) which has the habit of picking winners.

[galaxy enforcer] 29/12/2019 23:42

It is pleasing to see that others are also recognising the current value with the DLAR share price. An article posted earlier in this thread is quite an eye opener;

In the year to March 2019, De La Rue made revenues of £516.6million. Of this, £39.3million came from the product authentication business.

That unit also contributed £5.7million of profit to De Le Rue’s £60million total – though analysts expect product authentication’;s profits to increase to between £18.7million and £20.7million in this current financial year.

That could mean the product authentication business is worth up to £200million, on one analyst’s reckoning.

But De La Rue’s troubles are weighing down its shares so much that currently the whole company is valued at just over £160million.

Now with the recent sale of one of the business units we would expect the debt level to have been reduced to a more manageable level.

Will DLAR be one of the star performers in 2020? From this level it is quite possible.

[micha14] 29/12/2019 23:32

Thanks for that @craven cottage. Very good info, THANK YOU. Yes, if you consider the intangibles such as patents,licences, competetive position, order book, the business model itself than evidently this is an undervalued stock, BUT, its not without risk!! net debt has balooned from 107m to 170m, pension deficit is 39m, identity business has been sold and negative equity would make many cringe. However, i have started buying as to me this is one of the Buffetts high return/competetive advantage businesses. I just love the business. @craven cottage if you and I set up a shop to compete with delaRue, how would we do?? 1b£ wont be enough, its the history, the epxertise, the brand name, the trust of governments all over the world, the patents, the technology. The was an interesting opinion above on it being a "technology company". A powerful though, BUT NOT WITHOUT RISK at this point.

[meijiman] 29/12/2019 18:01

got to agree...could be a bolter for 2020. Someone may have a pop at this...sum of the parts and all that. Crystal Amber sums it up nicely.Also new management should be able to make a difference post the clown show.

[essentialinvestor] 29/12/2019 16:57

Perhaps looking significantly more interesting than it has for some time.

[dealy] 29/12/2019 14:59

thanks for this. This is basically a tech company that has somehow ended up being valued as a me too type low value added domestic minnow. Private equity probably licking its lips over this right now

[cravencottage] 29/12/2019 10:24

To my knowledge it's @ 35mill...

Just to add a point from the previous post.

Crystal Amber ( which have track record of investing in undervalued companies such as DLAR - Run by the very capable Richard Bernstein) had a meeting with the executive board post interim results and had no hesitation in doubling the fund's position from 7 to 14%..

This is an excerpt from Crystal Amber's newletter justifying their investment...

The destruction of shareholder value at De La Rue is the direct result of an appalling level of mismanagement, arrogance and lack of accountability at this once great British company.

Notwithstanding these recent developments, the Fund continues to believe that De La Rue enjoys a combination of strong competitive positions in high return businesses and attractive growth opportunities backed by a capacity for both significant organic investment and the acquisition of further technological competencies. Regrettably, the mismanaged and opaque communication surrounding the full year results overshadowed some material positive developments, including a 20% increase in the company's total order book (now disclosed, following repeated requests by the Fund) and a 38% increase in its revenue from security features.

De La Rue also has obvious strategic value, as evidenced by the takeover approach from its competitor Oberthur in late 2010, and the acquisition last year of another banknote producer, Crane Currency, for US$800 million. The Fund notes that the shares now trade at below one quarter of the price offered by Oberthur, a cash bid rejected by De La Rue's board at the time.

In the Fund's view, De La Rue has suffered from a lack of strong and knowledgeable leadership, including an insufficient understanding of investor expectations and how to deliver against them. This has resulted in an unacceptable financial performance over many years, evidenced amongst other factors by a drop in earnings per share despite tailwinds from the company's various end-markets.

The Fund believes that the board departures announced recently create an opportunity to build a higher-quality leadership team able to maximise the value of the banknote business and to capitalise on the opportunities presented by De La Rue's high-growth, high-margin authentication activities.

[dealy] 29/12/2019 01:53

thanks for your comments. How bad is the pension deficit?

[micha14] 28/12/2019 23:59

This Co is not going bankrupt anytime soon nor will they issue additional equity. They raised the 42M£ from identity biz sale and insiders bought quite a bit of stock this Autumn. The authentication biz is growing quickly and in currency despite weaker sales they still hold the leading position in the world. They have taken a lot of charges in last 18 months so hopegully worst is over. New managements plan in the next 3 months will be important and managements competence is key. Owning this company is speculative at this point as its not set in stone they will pull of the recovery, but if you believe in the company and its business there is justification in buying in at this low price. Pension liability is a huge headache, but the business itself is a good business with high return and competetive advantage. I have initiated a position at 136p and will be monitoring the turnaround plan closely