De La Rue: expect a 30% gain in six to nine months
These days, successful investing is about finding firms that are delivering cash, making savings and operating in markets seeing growing demand.
These days, successful investing is about finding firms that are delivering cash, making savings and operating in markets seeing growing demand.
It also helps to seek out firms that are actively supporting their share price through buybacks, says The Fleet Street Letter. Printer De La Rue (DLAR, 428.75p) which prints cash for 150 central banks, produces high-value security documents such as travellers' cheques and passports, and provides software systems and money counting and sorting machines for banks meets all these criteria. It also has the huge advantage of having no direct competitor.
The company made a loss in 2003, but since then has been on quite a turnaround path, having worked hard to cut costs (moving production from the UK and Sweden to China) and dispose of loss-making divisions (they got rid of their US-based electronic voting business, Sequoia, in March, for example). The result? Pre-tax profits rose from £22.5m in 2004 to £49.4m this year, and are expected to hit £62.7m in 2006. The board has also announced a share buy-back programme at present, the surplus cash on the books should mean that it can buy 7.5% this year and the same again next year.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The firm's overall sales fell in 2004/2005, thanks to the sale of Sequoia, but this shouldn't put investors off it is a temporary blip particularly as the shares are "remarkably cheap" on a price-to-sales ratio of 1.2 times, says the Fleet Street Letter. There could be a "30% gain or more inside six to nine months".
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
Annunziata was a deputy editor at MoneyWeek, covering financial markets, politics, economics and comment pieces. She then went on to the Daily Telegraph as a lead writer where she wrote a column on young women’s financial issues. She was briefly a member of the European Parliament for the East Midlands region in the UK as part of the Conservative Party. Annunziata continues to write as a freelance journalist.
-
Do you qualify for the Winter Fuel Payment if you live abroad?
The Winter Fuel Payment will be means tested for expats living in Europe, in line with the new rules impacting those in the UK. But a quirk in the system means not all countries are eligible.
By Katie Williams Published
-
What the Employment Rights Bill means for your job
New workplace reforms are set to give employees new rights to benefits and flexible working
By Marc Shoffman Published