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By Li-mei Hoang
LONDON May 28 British banknote printer De La
Rue said it was entering a new financial year with 218
million pounds ($366.3 million) of orders as it warned that the
stiff competition it felt last year would continue to pressure
The company, which makes over 150 national currencies and UK
passports, said it had secured a strong number of contracts for
2014/15 and had encouraging early orders for the following year.
But the challenging market conditions for the financial year
ended March 29 - which had led to a profit warning - continue to
be an concern, it said.
"We still see pressure on prices in the year to come. It has
not eased, particularly," said Chairman Philip Rogerson, who has
assumed executive responsibilities temporarily since the
departure of Tim Cobbold as chief executive in March.
The company said it was facing increased competition in both
its banknote printing business, from European competitors in
Germany and France, as well as its cotton-paper supply, as
global rivals increase their output.
De La Rue reported a 43 percent rise in operating profit for
2013/14, driven by cost cuts that provided 20 million pounds of
savings. Operating profit rose to 90.5 million pounds, slightly
ahead of its guidance, from 63.2 million a year earlier.
Its share price - which has fallen 14.3 percent over the
past year - was up 4.9 percent at 850 pence at 1045 GMT, making
it the third-highest riser on Britain's FTSE 250 index
"The 12-month order book is up 5 percent year-on-year and
provides higher-than-average coverage, helping to underpin our
full-year 2015 forecasts," said Investec analyst Thomas Rands.
"The company has also received some orders falling into FY16
we believe, providing some welcome additional visibility. We
expect the details of any additional cost-saving plans will come
after the appointment of a new CEO," Rands added.
De La Rue warned in a trading update in October that it
would miss its operating profit target of 100 million pounds for
"These results reflect the significant progress that De La
Rue has made through implementing the three-year improvement
plan, which has grown profits from 40 million in 2010/11 to 90
million in 2013/14," Rogerson said.
De La Rue, which added polymer banknotes to its business in
2012, lost out in March on a 10-year contract to supply polymer
to the Bank of England (BoE) for new plastic 5 pound and 10
pound bank notes, but is still working under a 10-year contract
to print notes for the central bank to 2015.
The company is bidding to extend its BoE bank printing
contract by another 10 years and faces stiff competition from
its rivals Munich-based Giesecke & Devrient, and a consortium of
G4S and France's Oberthur Technologies.
The BoE has said that it will spend around 1 billion pounds
over the next 10 years on materials and printing for all new
"We are driving very hard to develop our position in the
polymer bank note market," said Rogerson, who added that the
company had secured contracts with nine countries to supply
($1 = 0.5952 British Pounds)
(Reporting by Li-mei Hoang; Editing by Jane Baird and Pravin