De La Rue profit boosted by verification and banknotes

De La Rue reported an increase in first-half profit as sales of authentication products and banknotes more than made up for the end of a contract to make UK passports.

Adjusted operating profit for the six months to 26 September rose to £17.4m from £15.3m a year earlier as adjusted revenue increased to £179.2m from £177.6m.

Under international accounting standards, operating profit jumped to £13.8m from £4.6m as exceptional charges fell to £3.1m from £10.2m a year earlier when the company stopped making banknotes at its Gateshead factory. It was forced to do so after losing the contract to produce passports for the UK.

Adjusted revenue at the authentication and currency businesses rose 13.7% to £17.4m. That more than made up for the UK's decision not to give De La Rue the contract to make post-Brexit passports. The decision forced the company to stop banknote and UK passport printing at its facility in Gateshead, north east England, with resulting job losses.

Chief Executive Clive Vacher has been cutting costs and investing in product verification and production of polymer banknotes to turn the company around. He said the company performed well despite some Covid-19 disruption and supply chain issues in the first half.

Vacher said: "Our first-half results have shown substantial improvement in the group's financial and operational performance. Based on group trading … continuing to be positive, the outlook for revenue, adjusted operating profit and net debt for the full year remain in line with the board's expectations."

De La Rue shares rose 0.1% to 160.63p at 08:35 GMT.