REG - De La Rue PLC - Trading update

De La RueAnnouncement

12/04/2023 07:00

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RNS Number : 8912V  De La Rue PLC  12 April 2023

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated by the Market Abuse Regulation
(EU) No.596/2014, as it forms part of UK law by virtue of the European
Union (Withdrawal) Act 2018 ("MAR"). Upon the publication of this
announcement, this inside information is now considered to be in the public
domain

 

 

12 April 2023

De La Rue plc

Trading update

De La Rue plc (LSE: DLAR) ("De La Rue", the "Group" or the "Company") today
announces a trading update on the financial year ended 25 March 2023 (FY23).
The Group is also updating guidance for the financial year ending 30 March
2024 (FY24).

 

For FY23, De La Rue expects full year adjusted operating profits to be a
mid-single digit percentage below market expectations ((1)). Net debt as at 25
March 2023 is expected to be in line with market expectations.

 

The downturn in Currency, impacting both De La Rue and the wider industry, is
causing a significant degree of uncertainty in terms of outlook for FY24.
The demand for banknotes has been at the lowest levels for over 20 years,
resulting in a low order book going into FY24.  However there are encouraging
signs that the market is recovering, with a significant number of new tenders
actively underway but the timing of this recovery remains uncertain.

 

We expect revenue in the Authentication division to exceed £100m for the
first time in FY24, driven by the existing order book, including the full-year
impact of the Qatar, Bahrain and Oman GRS programmes, and a substantial
increase in demand from the Australian passport programme.  This progress
will be somewhat offset by the ongoing lower global PC sales which, according
to IDC, is likely to start to recover only in calendar year 2024.

 

As a result of these factors and, noting the considerable degree of
uncertainty around the outlook, the Board currently expects full year adjusted
operating profit for FY24 to be in the low £20m range.

 

The Company is in discussions with its lending banks in relation to seeking an
amendment to its banking covenants, reflecting the revised outlook and also
reflecting the increase in the Company's funding costs resulting from higher
Bank of England base rates.

 

The Company is also in conversations with the Trustee of the De La Rue Pension
Scheme and has officially requested a deferral of the next £18.75m of deficit
repair contributions.

 

We plan to announce De La Rue's results for the full year ended 25 March
2023 on 31 May 2023.

 

((1)) Market expectations are based on the average of published notes
from Investec and Numis Securities.

 

The person responsible for the release of this announcement on behalf of De
La Rue for the purposes of MAR is Jon Messent (Company Secretary).

 

Enquiries

 De La Rue plc         +44 (0) 7990 337707
 Clive Vacher          Chief Executive Officer
 Rob Harding           Chief Financial Officer
 Louise Rich           Head of Investor Relations

 Brunswick             +44 (0)207 404 5959
 Stuart Donnelly
 Ed Brown

About De La Rue

De La Rue plc's purpose is to secure trust between people, businesses and
governments. As a trusted partner of governments, central banks and commercial
organisations seeking to secure their global supply chains and cash
cycles, De La Rue provides highly secure physical and digital solutions that
underpin the integrity of economies and trade.

De La Rue's Currency division provides market-leading end-to-end currency
solutions, from finished banknotes to secure polymer substrate and banknote
security features to over half the central banks and issuing authorities
around the world.

Our Authentication division protects revenues and reputations through the
provision of physical and digital solutions to governments and commercial
organisations. We also manufacture ID security components.

At 25 March 2023, De La Rue had over 1,800 employees who work with
organisations in more than 140 countries, leveraging the group's manufacturing
facilities in the UK, US, Malta, Sri Lanka and Kenya.

De La Rue's shares are traded on the London Stock Exchange (LSE:DLAR). De La
Rue plc's LEI code is 213800DH741LZWIJXP78.

 

For further information please visit www.delarue.com
(https://checkpoint.url-protection.com/v1/url?o=http://www.delarue.com/&g=ODlkYzkxYjY4MTcyYzBhYw==&h=Y2UzYjE4MmQ0ZGYzOTlmZmU3OGY2ZjZiMTlmZGE1OGNkMDQ2ZjI1ODAzNTQyYzc2ZjhhYjAzMjU5NjA5MTM0Nw==&p=Y3AxZTpkZWxhcnVlMTYzMDUwMzk1MDQxOTpjOm86ZjI2MDZhMzFlYTQ5YTM3NDMyYjk2NWU2MjNiNzk0YTA6djE6cDpU)
.

 

Cautionary note regarding forward-looking statements

This announcement includes statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "anticipates", "expects", "intends", "plans", "may",
"will", "could", "shall", "risk", "aims", "predicts", "continues", "assumes",
"positioned" or "should" or, in each case, their negative or other variations
or comparable terminology. These forward-looking statements include all
matters that are not historical facts. They appear in a number of places
throughout this announcement and include statements regarding the intentions,
beliefs or current expectations of the directors, De La Rue or the Group
concerning, amongst other things, the results of operations, financial
condition, liquidity, prospects, growth and strategies of De La Rue and the
industry in which it operates.

By their nature, forward-looking statements involve known and unknown risks,
uncertainties, assumptions and other factors because they relate to events and
depend on circumstances that will occur in the future whether or not outside
the control of the Company. Past performance cannot be relied upon as a guide
to future performance and should not be taken as a representation or assurance
that trends or activities underlying past performance will continue in the
future. Accordingly, investors or potential investors should not place undue
reliance on these forward-looking statements. The Group's actual results of
operations, financial condition, liquidity and the development of the industry
in which it operates may differ materially from the impression created by the
forward-looking statements contained in this announcement. In addition, even
if the results of operations, financial condition and liquidity of the Group
and the development of the industry in which it operates, are consistent with
the forward-looking statements contained in this announcement, those results
or developments may not be indicative of results or developments in subsequent
periods.

Other than in accordance with its legal or regulatory obligations, De La
Rue does not undertake any obligation to update these forward-looking
statements, which speak only as at the date of this announcement, and will not
publicly release any revisions that may be made to these forward-looking
statements, which may result from events or circumstances arising after the
date of this announcement.

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