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November 22, 1995

DE LA RUE SHARES IN FREE FALL AFTER THE COMPANY ISSUES PROFIT WARNING

By CBR Staff Writer

Shares in British banknote and security printing company De La Rue Plc plunged yesterday after it issued disappointing half-year results and warned that earnings this year will fall short of last year. De La Rue shares plunged 96 pence, or 10.6%, to 804 pence after the results and profit warning. Pre-tax profits in the first half fell to ú69.1m from ú72.8m, which De La Rue itself said was below expectations. Analysts had predicted a figure of between ú63.9m and ú80.0m. The group said that although banknote enquiries had turned into orders, this was too late to contribute substantially to the current year. It added that the profit from security printing in the second half looked likely to be similar to that in the first, and that while printing works profits had contributed ú9.9m in the first half, there would be ‘virtually no contribution’ in the second. De La Rue cut its own estimates by about ú25m for the full year. Difficult trading conditions in payment systems markets cut expectations by about ú5.0m and by almost ú10m for its Giori unit. A spokeswoman said the company did not plan to alter its strategy. Squeezed margins and deferred deliveries have caused more of a dip than we anticipated, she said. But you don’t alter your strategy just because you have, like many other companies, had a dip. Analysts in the City had been forecasting a full-year profit of just over ú170m, but said they were waiting until after they met with the company to cut estimates.

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