Interim Results
De La Rue PLC
28 November 2006
INTERIM STATEMENT
SIX MONTHS TO 30 SEPTEMBER 2006
KEY FINANCIALS
Half Year Half Year Change
2006/2007 2005/2006
£m £m
Sales 328.4 290.7 +13.0%
Profit before tax and exceptional items* 43.9 30.6 +43.5%
Profit before tax 43.9 27.6 +59.1%
Headline earnings per share* 18.5p 11.8p +56.8%
Basic earnings per share 18.5p 10.6p +74.5%
Operating cash flow 51.2 46.5 +10.1%
Net cash at end of period 98.9 61.6 +60.6%
Dividends per share 5.83p 5.20p +12.0%
* before net exceptional charges of £nil (2005/2006 : £3.0m)
HIGHLIGHTS
• Sales up 13 per cent to £328.4m (2005/2006 : £290.7m)
• Profit before tax and exceptional items up 43.5 per cent to £43.9m
(2005/2006 : £30.6m)
• Group operating margins improved by 2.6 percentage points to 12.0 per cent
(2005/2006 : 9.4 per cent).
• Continued strong cash generation. Net cash £98.9m at end of the period
(2005/2006 : £61.6m)
• Increase in the interim dividend of 12 per cent to 5.83p per share
• Ongoing share buy back programme. In the period 2.5m shares acquired for
cancellation at a cost of £13.5m, bringing the total to 4.1m shares acquired
at a cost of £21.3m since commencement of the current programme.
Nicholas Brookes, Chairman of De La Rue plc commented:
'This is another excellent set of results from De La Rue building on the
consistent improvements in operational efficiencies and margins with strong cash
conversion over the past three years. In addition to the improvement in sales,
the Group continues to see the benefits of its strategy of concentrating on its
core activities, addressing underperforming businesses and improving operational
productivity. Our confidence is also reflected in our sustained commitment to
improving shareholder returns.
'Visibility of the order books in both Cash Systems and Currency underpins our
confidence for the second half. As previously announced, we expect the weighting
between first and second half trading to be more evenly balanced in 2006/2007
than in previous years.
'In line with our commitment to improve shareholder returns, the Board will
review the means and amount of capital to be returned to shareholders at
the time of the preliminary results. The Board will take into account the level
of surplus cash within the business, current trading conditions and the levels
achieved through the share buy back programme.'
For further information, please contact:
Leo Quinn Group Chief Executive +44 (0)1256 605303
Stephen King Group Finance Director +44 (0)1256 605307
Mark Fearon Group Head of Corporate Affairs +44 (0)1256 605303
Richard Mountain Financial Dynamics +44 (0) 207 269 7291
28 November 2006
INTERIM STATEMENT
De La Rue is pleased to report an excellent performance for the half year ended
30 September 2006 with all key performance indicators again showing good
improvements. The increases in margins and operational efficiencies continue to
demonstrate the progress the Group is making in implementing its strategy.
Furthermore, we are pleased to report revenue growth in both the Cash Systems
and Security Paper and Print divisions. Group underlying operating profits* of
£39.4m (2005/2006 : £27.3m) represented an increase of £12.1m or 44.3 per cent
and underlying profit before tax* rose 43.5 per cent to £43.9m (2005/2006 :
£30.6m). Headline earnings per share* increased by 56.8 per cent to 18.5p. Basic
earnings per share were 18.5p compared with 10.6p last year, which reflected the
absence of exceptional charges in the period.
In Security Paper and Print, strong banknote volumes (up 26.4 per cent on 2005/
2006) and paper volumes (up 13.3 per cent on 2005/2006) produced an excellent
first half result. In Cash Systems the benefits of the ongoing restructuring
actions undertaken last year and strong current growth in the USA, principally
driven by the present drive by US retail banks toward Teller Automation,
resulted in further margin improvements. Overall Group operating margins were
2.6 percentage points higher at 12.0 per cent (2005/2006 : 9.4 per cent).
Cash flow remains a key strength of the Group. Cash generated from operations of
£51.2m represented an improvement on the performance achieved in the first half
of last year (2005/2006: £46.5m) and reflected a 129.9 per cent conversion rate
from operating profit aided by record levels of advance payments. The Group
ended the half year with net cash of £98.9m, compared with net cash of £91.6m at
the start of the year.
* before net exceptional charges of £nil (2005/2006 : £3.0m)
RETURNS TO SHAREHOLDERS
Interim Dividend
In line with the Board's continued confidence in the Group's prospects an
interim dividend of 5.83p, representing an increase of 12 per cent on the
interim 2005/2006, will be paid on 17 January 2007 to shareholders on the
register on 15 December 2006.
Share Buy Back
The Board announced at the interim results in November 2005 its intention to use
the existing authorities granted to it at the 2005 Extraordinary General Meeting
(EGM) to use surplus cash to purchase the Company's own shares for cancellation.
The upper limit of the Board's existing authority is 14.99 per cent of issued
capital. In the first half the Company acquired 2.5 million shares under the
current share buy back programme at a cost of £13.5m, bringing the total number
of shares acquired since the commencement of the programme, in December 2005, to
4.1 million at a cost of £21.3m. The Board expects to continue this programme,
funded with surplus cash, and will seek shareholder approval to renew its
existing authority at the next AGM. The exact amount and timing of future
purchases will be dependent on market conditions and ongoing cash generation.
In line with our commitment to improve shareholder returns, the Board will
review the means and amount of capital to be returned to shareholders at
the time of the preliminary results. The Board will take into account the level
of surplus cash within the business, current trading conditions and the levels
achieved through the share buy back programme.
OPERATING REVIEWS
Security Paper and Print
2006/2007 2005/06 2005/06
Half Year Half Year Full Year
£m £m £m
---------- ---------- ----------
Sales 170.2 149.7 318.4
Underlying operating profit* 28.7 21.1 51.0
Underlying operating profit margin 16.9% 14.1% 16.0%
* before exceptional income of £nil (2005/2006 : £0.4m)
In Security Paper and Print, first half sales grew by 13.7 per cent to £170.2m
(2005/2006 : £149.7m) and underlying operating profits of £28.7m were 36.0 per
cent ahead of last year (2005/2006 : £21.1m).
First half banknote volumes were exceptional, increasing 26.4 per cent (2005/
2006 : decrease of 24.7 per cent) over the prior year. This reflected a strong
opening order position, which was partly offset by a less favourable work mix
compared to the corresponding period last year. The higher overall volumes
reflected increased overspill which was 25 per cent compared to 21 per cent in
the corresponding period last year. In addition, banknote paper volumes rose by
13.3 per cent (2005/2006 : decrease of 1.0 per cent) driven by the strong print
order book and resulted in the paper mill operating at near capacity levels.
Overall, the order book in Currency remains strong, providing good visibility
for the second half of the year.
The Security Products and Identity Systems businesses also continued to perform
well. Sales benefits from increased volumes in authentication labels, fiscal
stamps and passports all contributed to improved results.
Cash Systems
2006/07 2005/06 2005/06
Half Year Half Year Full Year
£m £m £m
-------- ---------- ----------
Sales 158.2 141.0 292.4
Underlying operating profit* 10.7 6.2 18.4
Underlying operating profit margin 6.8% 4.4% 6.3%
* before exceptional charges of £nil (2005/2006 : £3.4m)
In Cash Systems, first half sales of £158.2m grew by 12.2 per cent (2005/2006 :
£141.0m) and underlying operating profits of £10.7m were strongly ahead of last
year (2005/2006 : £6.2m). This reflected an incremental benefit of £3.0m from
the restructuring actions taken in the second half of last year and increased
sales volumes through the fixed cost base. Foreign exchange had a £0.3m adverse
effect on sales and £0.5m adverse on operating profits.
Teller Automation volumes were up on the same period last year driven
principally by continued growth in North America. Over the past two years we
have invested in expanding the sales force in the region and in new product
development for the Teller Automation market generally which partially offset
the higher sales volumes. The Sorter business had an improved first half and our
focus remains on achieving operational improvements and targeting the markets in
Russia, North America and China. The OEM (ATM mechanisms) and Desktop Products
businesses had a good first half, benefiting from the pull forward of orders
associated with outsourcing of manufacturing to China.
UK PENSION SCHEME
The charge to operating profit in respect of the UK pension scheme for the first
half of 2006/2007 was £4.7m (2005/2006 : £4.8m). In addition, under IAS 19 there
is a finance credit of £0.8m arising from the expected return on assets less the
interest on liabilities (2005/2006: charge of £0.7m). The pension deficit, net
of deferred tax asset, recorded under IAS 19 at the half year was £76.0m (March
2006: £80.5m).
During the first half the Company started a review of the future benefits of the
UK Pension Scheme and discussions have commenced with UK employees. The Company
expects to complete the review prior to the year end. The triennial valuation of
the De La Rue UK Pension Scheme as at April 2006 is continuing.
ASSOCIATES
Profit from associates after tax was lower than last half year at £2.2m (2005/
2006 : £2.9m) reflecting bid preparation costs for the third lottery licence.
The main associated company is Camelot, the UK lottery operator. It is in the
process of finalising its bid with the licence running from 2009 to 2019.
INTEREST
The Group's net interest income of £1.5m (2005/2006 : £1.1m) reflected the
strong cash position. In addition a credit of £0.8m has arisen from the pension
scheme as noted above (2005/2006: charge of £0.7m).
TAXATION
The underlying effective tax rate was 29.9 per cent (2005/2006 full year : 29.4
per cent).
CASH FLOW
Cash generated from operations in the first half was £51.2m (2005/2006 : £46.5m)
as a result of strong cash conversion and an increase in advance payments which
are now at a record level of £63.0m. Capital expenditure of £9.2m was in line
with last year (2005/2006 : £9.7m). After payment in the first half of the 2005/
2006 final dividend (£19.0m) and spending £13.5m on the share buy back
programme, closing net cash was £98.9m compared with £91.6m at March 2006.
CHANGES TO THE BOARD
Gill Rider was appointed to the Board on 22 June 2006 as a non-executive
director. Ms Rider, 51, is Director General, Leadership and People Strategy in
the Cabinet Office. She started her career with Accenture in 1979 in various
roles before being appointed global Chief Leadership Officer in 2002.
OUTLOOK
Visibility of the order books in both Cash Systems and Currency underpins our
confidence for the second half. As previously announced, we expect the weighting
between first and second half trading to be more evenly balanced in 2006/2007
than in previous years.
-ends-
Notes to Editors:
1. De La Rue is the world's largest commercial security printer and papermaker,
involved in the production of over 150 national currencies and a wide range
of security documents such as passports, authentication labels and fiscal
stamps. The Company is also pioneering new technologies worldwide in
government identity solutions for national identification, drivers licence
and passport issuing schemes. Employing over 6,000 people across 31
countries, it is also a leading provider of cash handling equipment and
software solutions to banks and retailers worldwide, helping them to reduce
the cost of handling cash.
2. A presentation to analysts will take place at 9:00am today at The London
Stock Exchange, 10 Paternoster Square, London, EC4M 7LS
3. High resolution photographs are available to the media free of charge at
http://www.newscast.co.uk/ (+44 (0) 207 608 1000).
4. De La Rue Financial Calendar:
2006/2007
Ex-dividend date 13 December 2006
Record date 15 December 2006
Payment of 2006 interim dividend 17 January 2007
2006/2007 Year End 31 March 2007
GROUP CONDENSED INCOME STATEMENT - UNAUDITED
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2006
2006/07 2005/06 2005/06
Half Year Half Year Full Year
Notes £m £m £m
---------- ---------- ----------
3 Sales 328.4 290.7 610.8
---------- ---------- ----------
------------------------------------------- ---------- ---------- ----------
Operating profit before exceptional items 39.4 27.3 69.4
Exceptional items
---------- ---------- ----------
3 - Reorganisation costs - (4.2) (3.7)
3 - Income from investments - 1.2 1.2
---------- ---------- ----------
- (3.0) (2.5)
------------------------------------------- ---------- ---------- ----------
---------- ---------- ----------
3 Operating profit 39.4 24.3 66.9
Share of profits of associated companies after
taxation 2.2 2.9 6.8
---------- ---------- ----------
Profit before finance costs 41.6 27.2 73.7
------------------------------------------- ---------- ---------- ----------
---------- ---------- ----------
Interest income 2.0 2.7 3.8
Interest expense (0.5) (1.6) (2.0)
Retirement benefit obligation finance income 16.3 14.3 29.1
Retirement benefit obligation finance cost (15.5) (15.0) (30.9)
---------- ---------- ----------
2.3 0.4 -
------------------------------------------- ---------- ---------- ----------
Profit before taxation 43.9 27.6 73.7
Taxation - UK (3.4) (1.9) (9.2)
- Overseas (9.7) (6.2) (12.7)
------------------------------------------- ---------- ---------- ----------
Profit for the period 30.8 19.5 51.8
------------------------------------------- ---------- ---------- ----------
Profit attributable to minority interests 1.1 0.9 0.9
Profit attributable to equity shareholders of
the Company 29.7 18.6 50.9
------------------------------------------- ---------- ---------- ----------
30.8 19.5 51.8
------------------------------------------- ---------- ---------- ----------
------------------------------------------- ---------- ---------- ----------
4 Basic earnings per ordinary share 18.5p 10.6p 30.2p
Diluted earnings per ordinary share 18.0p 10.6p 29.4p
------------------------------------------- ---------- ---------- ----------
The directors propose a dividend of 5.83 pence per share for the half year ended
30 September 2006 which will utilise £9.3m of shareholders' funds. These
financial statements do not reflect this dividend payable, which will be
accounted for in shareholders' equity as an appropriation of retained earnings
in the year ending 31 March 2007.
GROUP BALANCE SHEET - UNAUDITED
AT 30 SEPTEMBER 2006
2006/07 2005/06 2005/06
Half Year Half Year Full Year
£m £m £m
ASSETS
Non-current assets
Property, plant and equipment 134.1 144.0 139.3
Intangible assets 29.2 23.8 28.9
Investments: Associates 10.8 12.8 12.7
Other investments - 0.4 -
Available for sale financial assets 0.5 - 0.5
Deferred tax assets 54.4 55.8 53.9
Other receivables - 1.4 0.2
Derivative financial instruments 0.3 - -
-------------------------------------- ---------- ---------- -----------
229.3 238.2 235.5
-------------------------------------- ---------- ---------- -----------
Current assets
Deferred tax assets - 2.0 -
Inventories 83.1 81.0 71.6
Trade and other receivables 107.2 91.6 92.2
Current tax assets 0.6 - 1.3
Derivative financial instruments 1.4 2.6 1.3
Cash and cash equivalents 336.8 374.3 388.8
-------------------------------------- ---------- ---------- -----------
529.1 551.5 555.2
-------------------------------------- ---------- ---------- -----------
Total assets 758.4 789.7 790.7
-------------------------------------- ---------- ---------- -----------
LIABILITIES
Current Liabilities
Borrowings (227.2) (295.3) (284.6)
Trade and other payables (200.0) (182.0) (182.5)
Current tax liabilities (35.1) (10.4) (29.8)
Derivative financial instruments (1.5) (4.2) (1.2)
Provisions for liabilities and charges (18.9) (26.8) (22.3)
-------------------------------------- ---------- ---------- -----------
(482.7) (518.7) (520.4)
Non-current liabilities
Borrowings (10.7) (17.4) (12.6)
Retirement benefit obligations (112.8) (129.3) (119.6)
Deferred tax liabilities (0.6) (1.3) (0.8)
Derivative financial instruments - - (0.5)
Other non-current liabilities (7.8) (17.3) (0.5)
-------------------------------------- ---------- ---------- -----------
(131.9) (165.3) (134.0)
Total liabilities (614.6) (684.0) (654.4)
-------------------------------------- ---------- ---------- -----------
NET ASSETS 143.8 105.7 136.3
-------------------------------------- ---------- ---------- -----------
EQUITY
Capital and reserves attributable to equity
holders
Called up share capital 45.2 46.2 45.9
Share premium account 20.6 19.0 20.6
Capital redemption reserve 4.6 3.5 3.9
Fair value and other reserves (0.1) (1.4) (0.5)
Cumulative translation adjustment 1.2 2.7 2.2
Other reserve (83.8) (83.8) (83.8)
Retained earnings 151.5 115.5 144.2
-------------------------------------- ---------- ---------- -----------
Total equity attributable to shareholders
of the Company 139.2 101.7 132.5
Minority interests 4.6 4.0 3.8
-------------------------------------- ---------- ---------- -----------
TOTAL EQUITY 143.8 105.7 136.3
-------------------------------------- ---------- ---------- -----------
GROUP CASH FLOW STATEMENT - UNAUDITED
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2006
2006/07 2005/06 2005/06
Half Year Half Year Full Year
£m £m £m
------------------------------------ ---------- ---------- -----------
Cash flows from operating activities
Profit before tax 43.9 27.6 73.7
Adjustments for:
Finance income and expense (2.3) (0.4) -
Depreciation and amortisation 11.3 13.6 27.0
(Increase)/decrease in inventory (13.3) (6.7) 3.5
Increase in trade and other receivables (15.0) (6.5) (5.6)
Increase in trade and other payables 28.0 22.0 16.6
(Decrease)/increase in reorganisation
provisions (2.3) 1.0 (3.4)
Loss on disposal of fixed assets 1.4 - 1.2
Share of income from associates after
tax (2.2) (2.9) (6.8)
Income from investments - (1.2) (1.2)
Other non-cash movements 1.7 - 1.7
------------------------------------ ---------- ---------- -----------
Cash generated from operations 51.2 46.5 106.7
Tax paid (9.6) (0.8) (10.1)
------------------------------------ ---------- ---------- -----------
Net cash flows from operating
activities 41.6 45.7 96.6
------------------------------------ ---------- ---------- -----------
Cash flows from investing activities
Disposal of subsidiary undertaking 1.0 - -
Proceeds from sale of investment - 0.8 0.8
Purchases of property, plant and
equipment (PPE) & software
intangibles (9.2) (9.7) (19.6)
Development assets capitalised (1.8) (0.2) (3.7)
Proceeds from sale of PPE 0.2 1.7 1.6
Proceeds from investments previously
impaired - 0.4 0.4
Interest received 2.1 2.3 3.8
Interest paid (0.3) (1.9) (1.5)
Dividends received 4.0 4.2 8.1
------------------------------------ ---------- ---------- -----------
Net cash flows from investing
activities (4.0) (2.4) (10.1)
------------------------------------ ---------- ---------- -----------
Net cash inflow before financing
activities 37.6 43.3 86.5
------------------------------------ ---------- ---------- -----------
Cash flows from financing activities
Proceeds from issue of share capital 2.9 2.1 6.3
Own share purchases (13.5) - (7.8)
Proceeds from borrowing - 2.4 2.4
Repayment of borrowings (2.1) (1.1) (2.4)
Finance lease principal payments (1.7) (2.1) (4.3)
Dividends paid to shareholders (19.0) (86.9) (95.8)
Dividends paid to minority interests (0.3) (0.9) (0.9)
------------------------------------ ---------- ---------- -----------
Net cash flows from financing
activities (33.7) (86.5) (102.5)
------------------------------------ ---------- ---------- -----------
Net increase in cash and cash
equivalents in the period 3.9 (43.2) (16.0)
Cash and cash equivalents at the
beginning of the year 107.8 126.3 126.3
Exchange rate effects (0.1) (2.0) (2.5)
------------------------------------ ---------- ---------- -----------
Cash and cash equivalents at the end
of the period 111.6 81.1 107.8
------------------------------------ ---------- ---------- -----------
Cash and cash equivalents consist of:
Cash at bank and in hand 272.2 324.3 318.6
Short term bank deposits 64.6 50.0 70.2
Overdrafts (225.2) (293.2) (281.0)
------------------------------------ ---------- ---------- -----------
111.6 81.1 107.8
------------------------------------ ---------- ---------- -----------
GROUP STATEMENT OF RECOGNISED INCOME AND EXPENSE - UNAUDITED
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2006
2006/07 2005/06 2005/06
Half Year Half Year Full Year
£m £m £m
----------------------------------------- ---------- ---------- -----------
Exchange differences (1.0) (0.7) (1.1)
Actuarial gain/(loss) on retirement
benefit obligations 6.0 (8.2) 2.3
Tax on actuarial gain/(loss) on retirement
benefit obligations (1.8) 2.5 (0.7)
Cash flow hedges recognised 0.7 (1.8) (1.5)
Tax on cash flow hedges (0.2) - 0.1
Net investment hedge (0.1) - 0.5
Current tax on share options 0.2 0.2 0.8
Deferred tax on share options 1.3 - 1.2
----------------------------------------- ---------- ---------- -----------
Net loss recognised directly in equity 5.1 (8.0) 1.6
Profit for the financial period 30.8 19.5 51.8
----------------------------------------- ---------- ---------- -----------
Total recognised income and expense for
the period 35.9 11.5 53.4
----------------------------------------- ---------- ---------- -----------
Total recognised income and expense for
the period attributable to:
Equity shareholders of the Company 34.8 10.6 52.5
Minority interests 1.1 0.9 0.9
----------------------------------------- ---------- ---------- -----------
35.9 11.5 53.4
----------------------------------------- ---------- ---------- -----------
NOTES TO THE INTERIM STATEMENT - UNAUDITED
1 Basis of Presentation and Accounting Policies
This unaudited Interim Statement has been prepared in accordance with the
Listing Rules of the Financial Services Authority and uses International
Financial Reporting Standards (IRRS) accounting policies consistent with those
described in the Annual Report 2006. The Group has chosen not to adopt IAS 34
'Interim Financial Statements' in preparing the interim consolidated financial
information and therefore is not in full compliance with IFRS.
2 Statement of Changes in Reserves
Attributable to Equity Shareholders Minority Total
---------------------------------------------------------------------- interest equity
Cumula-
Fair tive
Capital value trans-
Share redemp- and lation Profit &
Share premium tion other adjust- Other loss
capital account reserve reserve ment reserve account
£m £m £m £m £m £m £m £m £m
Balance at 27 March 2005 46.1 17.0 3.5 0.4 3.4 (83.8) 188.6 3.7 178.9
----- ----- ----- ------ ----- ------ ------ ----- -----
Exchange differences - - - - (0.7) - - - (0.7)
Actuarial loss on retirement
benefit obligations - - - - - - (8.2) - (8.2)
Tax on actuarial loss on
retirement benefit
obligations - - - - - - 2.5 - 2.5
Tax on share options - - - - - - 0.2 - 0.2
Fair value gains/(losses) net
of tax:
- cash flow hedges - - - (1.8) - - - - (1.8)
----- ----- ----- ------ ----- ------ ------ ----- -----
Net profit/(loss) recognised - - - (1.8) (0.7) - (5.5) - (8.0)
directly in equity
Profit for the period - - - - - - 18.6 0.9 19.5
----- ----- ----- ------ ----- ------ ------ ----- -----
Total income recognised for
the period - - - (1.8) (0.7) - 13.1 0.9 11.5
Share capital issued 0.1 2.0 - - - - - - 2.1
Employee share scheme
- value of services provided - - - - - - 0.7 - 0.7
Dividends - - - - - - (86.9) (0.6) (87.5)
----- ----- ----- ------ ----- ------ ------ ----- -----
Balance at 24 September 2005 46.2 19.0 3.5 (1.4) 2.7 (83.8) 115.5 4.0 105.7
----- ----- ----- ------ ----- ------ ------ ----- -----
----- ----- ----- ------ ----- ------ ------ ----- -----
Exchange differences - - - - (0.5) - - 0.1 (0.4)
Actuarial loss on retirement
benefit obligations - - - - - - 10.5 - 10.5
Tax on actuarial loss on
retirement benefit
obligations - - - - - - (3.2) - (3.2)
Tax on share options - - - - - - 0.6 - 0.6
Deferred tax on share options - - - - - - 1.2 - 1.2
Cash flow hedges recognised - - - 0.3 - - - - 0.3
Tax on cash flow hedges - - - 0.1 - - - - 0.1
Net investment hedge - - - 0.5 - - - - 0.5
----- ----- ----- ------ ----- ------ ------ ----- -----
Net profit/(loss) recognised
directly in equity - - - 0.9 (0.5) - 9.1 0.1 9.6
Profit for the period - - - - - - 32.3 - 32.3
----- ----- ----- ------ ----- ------ ------ ----- -----
Total income recognised for
the period - - - 0.9 (0.5) - 41.4 0.1 41.9
Share capital issued 0.1 1.6 - - - - - - 1.7
Purchase of shares for
cancellation (0.4) - 0.4 - - - (7.8) - (7.8)
Allocation of shares for
cancellation - - - - - - 2.5 - 2.5
Employee share scheme
- value of services provided - - - - - - 1.5 - 1.5
Dividends - - - - - - (8.9) (0.3) (9.2)
----- ----- ----- ------ ----- ------ ------ ----- -----
Balance at 25 March 2006 45.9 20.6 3.9 (0.5) 2.2 (83.8) 144.2 3.8 136.3
----- ----- ----- ------ ----- ------ ------ ----- -----
Exchange differences - - - - (1.0) - - - (1.0)
Actuarial loss on retirement
benefit obligations - - - - - - 6.0 - 6.0
Tax on actuarial loss on
retirement benefit
obligations - - - - - - (1.8) - (1.8)
Tax on share options - - - - - - 0.2 - 0.2
Deferred tax on share options - - - - - - 1.3 - 1.3
Cash flow hedges recognised - - - 0.7 - - - - 0.7
Tax on cash flow hedges - - - (0.2) - - - - (0.2)
Net investment hedge - - - (0.1) - - - - (0.1)
----- ----- ----- ------ ----- ------ ------ ----- -----
Net profit/(loss) recognised
directly in equity - - - 0.4 (1.0) - 5.7 - 5.1
Profit for the period - - - - - - 29.7 1.1 30.8
----- ----- ----- ------ ----- ------ ------ ----- -----
Total income recognised for
the period - - - 0.4 (1.0) - 35.4 1.1 35.9
Purchase of shares for
cancellation (0.7) - 0.7 - - - (13.5) - (13.5)
Allocation of shares for
cancellation - - - - - - 2.9 - 2.9
Employee share scheme:
- value of services provided - - - - - - 1.5 - 1.5
Dividends - - - - - - (19.0) (0.3) (19.3)
----- ----- ----- ------ ----- ------ ------ ----- -----
Balance at 30 September 2006 45.2 20.6 4.6 (0.1) 1.2 (83.8) 151.5 4.6 143.8
----- ----- ----- ------ ----- ------ ------ ----- -----
3 Segmental Analysis
The Group's primary reporting format is by business segment. The Group is
organised on a worldwide basis into two business segments: Cash Systems and
Security Paper and Print. The secondary reporting format is by geographical
segment.
Segmental analysis 2006/07 2005/06 2005/06
Half Year Half Year Full year
£m £m £m
Sales by class of business
-------- -------- --------
Cash Systems 158.2 141.0 292.4
Security Paper and Print 170.2 149.7 318.4
-------- -------- --------
328.4 290.7 610.8
------------------------------------------------ -------- -------- --------
Operating profit before exceptional items by class
of business -------- -------- --------
Cash Systems 10.7 6.2 18.4
Security Paper and Print 28.7 21.1 51.0
-------- -------- --------
39.4 27.3 69.4
------------------------------------------------ -------- -------- --------
Exceptional items by class of business
-------- -------- --------
Reorganisation costs Cash Systems - (4.2) (4.2)
Security Paper and Print - - 0.5
-------- -------- --------
- (4.2) (3.7)
Income from disposal of
investments Cash Systems - 0.8 0.8
Income from investments
previously impaired Security Paper and Print - 0.4 0.4
-------- -------- --------
- (3.0) (2.5)
------------------------------------------------ -------- -------- --------
Operating profit 39.4 24.3 66.9
-------- -------- --------
Turnover by geographical area of destination
United Kingdom and Ireland 31.2 37.5 76.8
Rest of Europe 100.0 87.7 190.9
The Americas 80.3 62.8 129.8
Rest of world 116.9 102.7 213.3
------------------------------------------------ -------- -------- --------
328.4 290.7 610.8
-------- -------- --------
In 2005/06, net reorganisation costs in Cash Systems related to the fundamental
restructuring of the business which commenced in 2004/05 and this was offset by
a write back of surplus provisions arising from the closure of factories in
Security Print and Paper.
Income from investments in 2005/06 arises from loan repayments from the Group's
associate holding in Valora.
Profit from disposal of investments in 2005/06 arises from the sale of the
Group's stake in a small distributor in South Africa.
4 Earnings per share 2006/07 2005/06 2005/06
Half Year Half Year Full year
pence per pence per pence per
share share share
---------------------------------- -------- -------- --------
Basic earnings per share 18.5 10.6 30.2
Diluted earnings 18.0 10.6 29.4
Headline earning per share 18.5 11.8 31.4
---------------------------------- -------- -------- --------
Earnings per share are based on the profit for the period attributable to
ordinary shareholders of £29.7m (2005/06: £18.6m) as shown in the Group
condensed income statement. The weighted average number of ordinary shares used
in the calculations is 160,850,440 (2005/06: 174,774,959) for basic earnings per
share and 164,918,582 (2005/06: 176,329,061) for diluted earnings per share
after adjusting for dilutive share options.
---------------------------------- -------- -------- --------
Reconciliation of earnings per
share
Basic earnings per share 18.5 10.6 30.2
Income from investment previously
impaired - (0.2) (0.2)
Profit on disposal of investments - (0.4) (0.5)
Reorganisation costs - 1.8 1.9
---------------------------------- -------- -------- --------
Headline earnings per share before
items above 18.5 11.8 31.4
---------------------------------- -------- -------- --------
The Directors are of the opinion that the publication of the headline earnings
is useful to readers of interim statements and annual accounts as they give a
more meaningful indication of underlying business performance.
5 Equity dividends
2006/07 2005/06 2005/06
Half Year Half Year Full year
£m £m £m
---------------------------------- -------- -------- --------
Final dividend for the year ended
25 March 2006 of 11.8p paid on
4/8/2006 19.0 - -
Final dividend for the year ended
26 March 2005 of 10.6p paid on
5/8/2005 - 19.1 19.1
Special dividend of 38.0p paid on
5/8/2005 - 67.8 68.3
Interim dividend for the period
ended 24 September 2005 of 5.2p
paid on 18/1/2006 - - 8.4
---------------------------------- -------- -------- --------
19.0 86.9 95.8
---------------------------------- -------- -------- --------
In accordance with IFRS the interim dividend has not been accrued in these
interim consolidated financial statements. An interim dividend of 5.83 pence per
share has been proposed for the half year ended 30 September 2006.
On 5 August 2005, the Company paid a special dividend of 38.0 pence per share
amounting to £68.3 million (the 'Special Dividend'). The Company's distributable
profits reported in its annual accounts for the year ended 26 March 2005 were
£50.2 million.
Under the Companies Act 1985 (the 'Act'), distributions by the Company must not
exceed the amount of the distributable profits that are reported in the
Company's last annual accounts unless interim accounts demonstrate that there
are sufficient distributable profits.
Therefore the Company took appropriate steps to ensure that it had more than
sufficient distributable profits to pay the Special Dividend and prepared
interim accounts to demonstrate this. It has recently come to Directors'
attention that these interim accounts were not approved and filed with Companies
House as required. However, as the Company had sufficient distributable profits,
the Directors believe that this technical breach of the Act has not prejudiced
either shareholders or creditors of the Company.
As a result the Company has a potential claim to recover the Special Dividend
paid in August 2005 from shareholders who received it. The Company does not
intend to make such a claim and the Board has remedied this situation by
resolving yesterday to pay a new interim dividend of £68.3 million (with the
same record date as the Special Dividend). The Company's obligation to pay the
new interim dividend is satisfied by the Company waiving its rights to recover
the Special Dividend paid in August 2005. Any profits required to pay the new
interim dividend are appropriated from profits shown in the Company's accounts
for the year ended 25 March 2006. No cash will be required to be paid either to
or by any shareholder. The effect of this is to ensure that no shareholder is
either better or worse off than would have been the case if the Special Dividend
had met all of the technical requirements of the Act. For the sake of good order
a resolution seeking shareholder ratification and approval of the steps taken by
the board to remedy the position will be proposed at the Company's next annual
general meeting.
It is expected that HM Revenue & Customs will continue to treat the Special
Dividend paid on 5 August 2005 as a distribution for UK tax purposes (made at
the time at which the Special Dividend was paid) and that the steps taken to
remedy the position will have no tax implications for shareholders
6 Notes to Group cash flow statement
2006/07 2005/06 2005/06
Half Year Half Year Full year
£m £m £m
Analysis of net cash
Cash at bank and in hand 272.2 324.3 318.6
Short term bank deposits 64.6 50.0 70.2
Bank overdrafts (225.2) (293.3) (281.0)
---------------------------------- -------- -------- --------
111.6 81.0 107.8
Borrowings due within one year (2.0) (2.0) (3.6)
Borrowings due after one year (10.7) (17.4) (12.6)
---------------------------------- -------- -------- --------
Net cash at end of period 98.9 61.6 91.6
---------------------------------- -------- -------- --------
7 This financial information does not constitute the Group's statutory
accounts within the meaning of s240 of the Companies Act 1985.
8 The statutory accounts for the year ended 25 March 2006 have been
delivered to the Registrar of Companies. The report of the auditors on those
accounts was unqualified and did not contain a statement under either section
237(2) or 237(3) of the Companies Act 1985.
9 This interim statement was approved by the Board on 27 November 2006 and
is being posted to all shareholders. Copies are available from the Company
Secretary, De La Rue plc, De La Rue House, Jays Close, Viables, Basingstoke,
Hampshire, RG22 2BS
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 1 day ago The Renewables Infrastructure Group Limited
- 1 day ago The Renewables Infrastructure Group Limited
- 1 day ago Smurfit Westrock (DI)
- 1 day ago Menhaden Resource Efficiency
- 1 day ago BP