Profit surge for banknote printer

The group said in October that tough competition was driving down banknote prices and cut profit expectations by £10m from £100m.

Results for the year to March 29 were in line with the reduced figure, with underlying operating profits at £90.5m, a rise of 43 per cent. Underlying pre-tax profits rose 51 per cent to £77.3m.

Investors cheered the update, as chairman Philip Rogerson promised “further efficiencies” and said the business entered the new financial year “with a good order book albeit reflecting the recent more difficult pricing environment in the currency market”. Shares climbed 5 per cent.

De La Rue prints bank notes for more than 150 national currencies including the Bank of England. The 201-year-old business said earnings rose due to a mixture of cost cutting and increased banknote sales - at higher prices than the year before though below historic averages.

It said banknote volumes were up 10 per cent to 9,600 tonnes over the year. In total the firm printed 6.2bn banknotes during the period, slightly down on the previous year when it printed 6.3bn.

De La Rue said its 12-month order book was up 8 per cent to £170m, and that early orders for 2015 to 2016 were “encouraging”. The business said it had come to the end of a three-year improvement plan, which had delivered £40m of savings.

Chairman Philip Rogerson said: “De La Rue is in fundamentally better shape today and with a culture of continuous improvement embedded in our business there will be further efficiencies ahead.”

The business said sales at its security products grew 2 per cent to £46.2m, mainly due to increased volumes of passport and other paper security products.

It added that sales at its identity systems unit were down 8 per cent to £77.6m, but this was largely due to one-off sales in relation to a HM Passport Office regional office roll out project carried out the previous year.

The FTSE 250 business said the hunt for a new boss was “well advanced”.