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.

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.

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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".