Authentication leads charge as De La Rue reports full-year figures

De La Rue's authentication division has taken another step towards its target of £100m ($142m) in revenues in the current financial year, with healthy growth in 2020/21 despite the COVID-19 crisis.

Authentication sales rose 5.1 per cent to £77.6m in the year ended March 28, buoyed by recent multi-year contracts with a lifetime value of £195m, and made an adjusted operating profit of £11.3m.

New wins included two digital tax stamp deals with the governments of Qatar and Bahrain, a renewed, five-year contract to protect Microsoft products, and contracts with unnamed, top-tier companies in the technology and healthcare sectors, said the company in its financial report.

De La Rue's authentication division provides physical and digital technologies used to authenticate products through the supply chain and protect them from counterfeiting, as well as to track taxable goods and fight against illicit trade.

There was also a somewhat surprising 1.8 per cent increase in the company's currency business – which is focused on the printing and design of banknotes – to £287 million despite the shift from cash to cashless that gained ground during the pandemic.

Adjusted operating profit for currency came in at £16.2m, reversing a £9.4m loss in the previous year.

De La Rue also said it has secured another Bank of England contract to supply the polymer substrate used in banknotes that will start in July, and has secured a new manufacturing site to double capacity during the 2021/22 fiscal year at a cost of around £20m.

Overall revenues fell 10 per cent to £388m in the year as a result of the divestment of De La Rue's identity business, which followed the loss of the contract to print the UK passport, but chief executive Clive Vacher said overall the company is performing well as its turnaround plan progresses.

Vacher has been tasked with revitalising the fortunes of De La Rue since coming on board in October 2019, and has already implemented a cost-cutting drive, restructured the business and raised new funding.

"We see a strong pipeline of business for FY 2021/22 and continue to expect to deliver the full financial and operational benefits of the turnaround plan during the year," said Vacher.