De La Rue profits slip, but authentication sales grow

De La Rue has reported a 7.6 per cent drop in operating profit today as revenues in its main banknote business declined in the first half of its financial year, but its soon-to-be-divested authentication unit held up better.

While currency revenues fell around 10 per cent to £145m, the authentication business grew over 4% to top £50m in the period, keeping it on course for a second year of £100m-plus sales. Adjusted operating profit came in at £7.3m, and De La Rue is predicting "mid to high £20 millions" for the full year.

The results are the first to be announced by the 211-year-old company since it agreed to sell authentication – which provides tax stamps, security labels and other technologies – to US rival Crane NXT for £300m in cash, hoping to complete the transaction before a £235m loan becomes payable in June 2025.

Along with clearing the near-term debt, the sale will also help De La Rue address a deficit in its legacy pension fund, with £30m of the sale price earmarked for this purpose.

Talks are still ongoing over a possible sale of the company's currency business, which focuses on banknote printing and design and has been struggling with a downturn in the demand for cash since the COVID-19 pandemic.

Chief executive Clive Vacher (pictured top) said that the company has built up its currency order book "to the highest levels seen for at least the last five years" and that will convert into increased revenues in the next financial year.

"With these firm foundations, our ongoing currency business is now well positioned to take full advantage of an improving market, with a substantial upward step change in activity in 2025 and beyond," he added.

Shares in the company were down 2.31 per cent at the time of writing.