De La Rue surges on strong start to year, COVID-19 contract

De La Rue says it has made a strong start to the financial year with a series of new contracts, including one to authenticate and protect COVID-19 testing kits.

Shares in the company more than doubled this morning in the wake of the announcement, which comes after a difficult period for the company as it restructures around banknote operations and an emerging product authentication and brand protection business.

So far this year, De La Rue’s authentication division has been awarded contracts with total lifetime value exceeding £100m, which the company says puts it on track to increase the division’s annual revenues to £100m by fiscal 2021/2022.

That includes a five-year deal to supply polycarbonate data pages for the new Australian passport, that include security features developed under a deal with Note Printing Australia in 2016.

Meanwhile, in currency, De La Rue says it has seen strong demand that has already taken up around 80 per cent of its production capacity.

It adds that the coronavirus crisis has so far only had a “limited impact” on its business in the current financial year although it has seen “extended timescales” for some government contracts.

The contract with the undisclosed “international” customer for the COVID-19 kits covers tests that are being shopped around the world, a key development given the almost routine reports of counterfeit coronavirus tests – as well as drugs and vaccines – being seized by customs and other enforcement agencies around the world.

De La Rue says it has also developed existing physical and digital solutions to provide a COVID-19 immunity certification scheme.

That could be an important development as countries around the world try to relax lockdown measures to contain the pandemic, particularly as some countries are asking for documented evidence of immunity status before they will allow entry to travellers.

Full-year results will be reported later this month, but in the meantime it seems the turnaround plan implemented by new chief executive Clive Vacher is on track.