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November 16, 1993


By CBR Staff Writer

De La Rue Plc, the company with a licence to print money, saw its pre-tax profits for the half year to September 30 shoot up over 43% on turnover that remained roughly flat. The world’s largest currency printer, which also makes the guts of the banks’ automated teller machines, gives a large measure of credit to currency fluctuations: on the security printing side the company saw its margins improve from 17.8% to 24.8%, arising from an exceptionally favourable mix of work during the period and a year-on-year benefit of UKP1.8m from moments in exchange rates. Over at payment systems, which makes cash handling machinery, and accounts for 60% of the group’s business, first half figures benefited from three months of sales and profits from newly-acquired German subsidiary, Garny AG. These amounted to 23.4m and UKP1.9m respectively.


Take this out and sales increased by 18.5% to UKP163.9m while operating profit increased by 18% to UKP17.7m. Once again though, the company warns that virtually all the of the increased operating profit, and about half of the new sales were attributable to currency fluctuations. In summary – don’t expect similar kind of improvements to follow through into the second half. The best that the board will predict is that profits for the second half will be better or equal to those last year, before tax and exceptional items are accounted for. The sale of its Brazilian operations also contributed a one-off UKP9.5m profit and the company unveiled a UKP39m increase in its net cash value which now stands at UKP301m. With UKP301.9m cash in the bank and in hand, the company is on the acquisition trail once again, according to chief executive Jeremy Marshall. Though Garny has made a decent contribution this time around, and the order book is looking good, the company is warning of continued weaknesses in the German market. The company has decided for the first time to incorporate the measure of headline earnings, the definition of earnings, defined by the Institute of Investment Management and Research which strips out cash gained from the disposal of fixed assets and discontinued business. Using this measure the earnings per share rose 29.6% to 21 pence. Using the old-style measure, the earnings per share rose 45.9% to 21 pence. The company is recommending an interim dividend of 6 pence, up from 3.85 pence, but this is part of a measure to distribute payments more equitably between interim and final payments. The results exceeded analyst’s expectations and the shares added 16 pence at 770 pence.

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