De La Rue sees paper volumes decline and reveals continued delays

Bank note printer De La Rue has said that while banknote print volumes were up 4.0 per cent to 2.9bn notes in the six months ended September 29th, banknote paper volumes declined 15 per cent to 4,500 tonnes.

The group said the decline was a reflection of the "more challenging market" following the introduction of additional capacity by other manufacturers.

The company also revealed that a number of significant orders which had been expected and planned for production in the second half of the current financial year have continued to be delayed, and admitted it will now be too late for these orders to benefit the current financial year. As a result the board expects that the financial results of the group for 2012/13 will be similar to those for 2011/12.

The group stressed that it is confident the delayed orders will be received for shipment in 2013/14.

More positively, half year group operating profits came in as expected, up 5% on the same period the previous year at around £33m, on sales of £245m, which were 3% higher than those generated in the same period in 2011.

"We have continued to make good progress with the Improvement Plan and this together with lower cotton prices has offset the effects of the paper volume movement and an adverse currency 'mix' compared with the corresponding period," the group said.

"The board remains confident that the delayed orders will be received for shipment in 2013/14 and in delivering the Improvement Plan, which has a target 2013/14 operating profit of in excess of £100m."

NR