De La Rue Systems sale talks

May 23 2008 by Karen Dent, The Journal

CURRENCY printer De La Rue revealed plans to sell its Cash Systems business as it unveiled a 21% rise in underlying profits.

The business, which employs 180 people at its biggest UK currency printing factory, in Gateshead, said profit before tax and exceptionals had increased to £124.1m for the year to the end of March, from £102.4m 12 months earlier.

The Basingstoke company, the world’s largest non-government banknote printer, also announced results of a strategic review which started last November.

It said it was in talks about the possible sale of its Cash Systems business, which makes money- handling equipment such as automated teller machines and coin counters for banks. It is valued by analysts at £400m.

Cash Systems has grown in the past four years and is now a strong business in its own right, De La Rue said. The other division – Security Paper and Print, which includes the Gateshead factory – worked at near capacity all year. Banknote volumes were up 13.4% on the previous year and paper volumes rose 19.2%, which the company said was an “excellent full year result”.

De La Rue said the two wings now operated as separate entities with largely different customers and there was little opportunity for synergy.

De La Rue chairman Nicholas Brookes said: “We enter 2008/2009 with the order books in both divisions at a four-year high. In currency, this is expected to result in the business continuing to operate throughout the current year at the high level of capacity experienced in 2007/2008.

“Thus despite the more uncertain financial environment, we remain confident in the outlook for the year ahead.”

The company, which produces one in five of the world’s banknotes, said revenue had increased 9.6% to £753.6m and it planned to increase its dividend and return £160m to shareholders through a special payout.

Dividend per share rose to 21.4p from 19.1p the previous year, while basic earnings per year went from 43.9p to 57.8p.