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De La Rue surges as it hails 'strong' start to year

By Michele Maatouk

Date: Monday 01 Jun 2020

(Sharecast News) - De La Rue shares surged on Monday after the banknote and passport printer hailed a "strong" start to the new financial year, left its full-year expectations unchanged and said it had only seen limited impact form the coronavirus crisis.

The company highlighted "a series of significant contract wins" for its authentication and currency divisions, as it said expectations for the financial year 2019/20 remain unchanged from the guidance given in its trading update at the end of March.

In the authentication business, it has signed a five-year agreement to supply polycarbonate data pages for the new Australian passport. In the financial year to date, the authentication division has been awarded contracts with total lifetime value exceeding £100m.

"This further underpins the company's expectation of Authentication division revenue of £100m by financial year 2021/22," it said.

In the currency segment, meanwhile, De La Rue said "strong" demand has continued during the pandemic. It has been awarded contracts representing around 80% of its available full-year currency printing capacity. The group said it continues to expect the division to reach a mid-teens adjusted operating margin in financial year 2020/21 as it makes "progress in enhancing its portfolio of offerings and the realignment of its cost base to enable it to become more competitive".

"The Covid-19 pandemic has to date had only a limited impact on the company's operations," it said.

"The company has implemented the relevant protective, regulatory and safety procedures for all employees, including home working, and there has been limited impact on its global service, support and operations activities."

At 0945 BST, the shares were up 42% at 57.75p.

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