De La Rue revenue stays flat but profit and earnings drop in first half of 2016
Banknote maker De La Rue kept revenue flat in the six months to 24 September this year, although pre-tax profit and earnings fell, and it's optimistic about the effect weaker sterling would have on the business in future.
The figures
Revenue was flat year-on-year at around £189m.
Underlying pre-tax profit was up three per cent to £18.2m from £17.6m, while reported profit before tax was down 31 per cent to £17.2m from £25.1m.
Underlying earnings per share (EPS) dropped four per cent to 14p from 14.6p, and reported EPS fell 47 per cent to 13.2p from 25p.
Shares in the group were up 0.8 per cent in early trading.
Why it's interesting
De La Rue said that while weaker sterling will have little impact on the business in the current financial year, as a major UK-based exporter with more than 80 per cent of its revenue coming from outside the UK, the company believes that it would benefit from a sustained weakness in the pound.
The group also benefitted from the launch of the new polymer £5 note in the UK, among other countries where it has released new notes. De La Rue said that even though the contribution from the polymer business is still small, the company is "optimistic about its potential growth in coming years".
What De La Rue said
"De La Rue's half year results are in line with our expectations," said chief executive Martin Sutherland.
"The currency business has shown strength and resilience despite the impact from the conclusion of a material contract last year.
"Both banknote print and banknote paper have performed well with increased volumes. De La Rue continues to make good progress against our 2020 strategic plan."
In short
As the UK's money loses its value, De La Rue stands to make more from printing it.