Improved operating margin secured largely through Improvement Plan cost savings
Operating profit maintained on lower volumes
Banknote print volumes similar at 6.3bn, paper volumes down 21%, as expected, to 8,700 tonnes reflecting challenging market conditions, historically low overspill and delayed orders as previously announced
Modest net debt at £77m and good operating cash inflow of £40m
Year end 12 month order book down at £207m (2011/12: £248m), but strong pipeline of order opportunities, up more than 10 per cent on prior year
EPS 2% higher and final dividend unchanged at 28.2p
Improvement Plan cost saving target for 2013/14 increased from £30m to £40m
Tim Cobbold, CEO, commented:
"De La Rue delivered an operating profit of £63m, in line with the prior year, despite a much more challenging banknote paper market, which has also had some impact in the printed banknote market.
Overall order intake reflected the difficult market conditions and an historically low level of overspill volume available to the commercial producers. It was also impacted by the previously announced delay to a number of important orders, some of which have since been received.
We continue to make good progress in cost reduction as part of the Improvement Plan and are now targeting annual savings of £40m, £10m higher than the original Improvement Plan target.
We enter the new financial year with increased cost savings identified and a strong pipeline of order opportunities, more than 10 per cent higher than at the same time last year. Whilst these opportunities must be secured for delivery in the year, the Board remains confident of achieving the 2013/14 Improvement Plan target of an operating profit in excess of £100m."