Interim Statement-Six months to 28 September 2013

RNS Number : 8987T
De La Rue PLC
26 November 2013
 



 

 

 

 

 

 

DE LA RUE PLC INTERIM STATEMENT

 

SIX MONTHS TO 28 SEPTEMBER 2013

 

KEY FINANCIALS


Half Year

2013/14

 

£m

Half Year

2012/13

Restated*

£m

 

Change

Revenue

234.0

245.4

(5%)

Operating profit **

39.1

33.2

18%

Reported operating profit

34.1

28.8

18%

Profit before tax and exceptional items

32.8

27.4

20%

Profit before tax

28.4

23.8

19%





Headline earnings per share ***

25.7p

20.7p

24%

Dividend per share

14.1p

14.1p

-

 

*

Restated to reflect the amendments to IAS19 Employee Benefits.

**

Operating profit is before an exceptional charge of £4.4m (2012/13: £3.6m) and before an IAS19 charge of £0.6m (2012/13: £0.8m).

***

Headline EPS is reported before the exceptional charge and exceptional tax credits of £0.7m (2012/13: £5.0m). 

 

The Directors are of the opinion that these measures give a better indication of underlying performance.

 

HEADLINES

 

·    Operating profit up 18% to £39.1m

 

·    Improvement Plan benefits of £10m realised in the period

 

·    Banknote print volumes down 10% to 2.6bn notes reflecting the timing of shipments between the first and second half of the current year

 

·    Banknote paper volumes up 4% to 4,700 tonnes

 

·    Headline EPS up 24% at 25.7p

 

·    Group 12 month order book up £25m at £232m, of which Currency orders up 14% at £180m

 

·    Continuous improvement programme on track to deliver full year target cost savings

 

Tim Cobbold, CEO, commented:

"Overall De La Rue performed well in the first half with operating profits up 18% at £39m, on slightly lower revenues. This improvement, despite more challenging trading conditions, reflects the good progress made on the ongoing cost reduction programme which is on track to meet the targets for the year.

 

As previously announced the current overcapacity in the banknote paper market has led to a more difficult pricing environment in the printed banknote market.  Accordingly the Board still expects operating profit for the current financial year to be c£90m.  This is an increase of over 40% on the previous year and a 125% increase on the performance in 2010/11 when the Improvement Plan began.

 

Despite the challenging market De La Rue is in good shape and benefiting from the many initiatives within the Improvement Plan.  The Group's 12 month order book at the end of the first half was £232m, up £25m since the year end."

 

Enquiries:   

De La Rue plc


+44 (0)1256 605000

Tim Cobbold

Chief Executive


Colin Child

Group Finance Director


Rob Hutchison

Group Director of Communications

 

 

Brunswick


+44 (0)207 404 5959

Jon Coles



Oliver Hughes



 

A presentation to analysts will take place at 9:00 am on 26 November 2013 at the London Stock Exchange, 10 Paternoster Square, London EC4M 7LS.

 

There will be a simultaneous audio webcast of the meeting.  For the live webcast, please register at www.delarue.com  where a replay will also be available subsequently.

 

26 November 2013

 

 

As the world's largest integrated commercial banknote printer, De La Rue is a trusted partner of governments, central banks, issuing authorities and commercial organisations around the world.

The Group has in recent years been involved in the design or production of over 150 national currencies. De La Rue also produces a wide range of security documents including passports, driving licences, authentication labels and tax stamps. In addition, the Group manufactures sophisticated, high speed cash sorting and inspection equipment.

De La Rue also offers a range of specialist services and software solutions including government identity schemes, product authentication systems and cash management processing solutions.

De La Rue employs approximately 4,000 people worldwide and is listed on the London Stock Exchange. For further information visit De La Rue's website at www.delarue.com

 

INTERIM STATEMENT

 

 

De La Rue has reported a good result in the first half of 2013/14 with operating profit up 18 per cent on revenues modestly lower than the corresponding period. Good progress has been made on the ongoing cost reduction programme which realised further benefits of £10m in the period and which remains on track to deliver its target by the year end.

 

The Group's 12 month closing order book at 28 September 2013 was £232m, up £25m since the year end.  The Currency business' closing order position was up 14 per cent reflecting some significant contract wins albeit at reduced contribution levels.  These reduced contribution levels reflect the continuing overcapacity in the banknote paper market which has led to a more difficult pricing environment in the printed banknote market. 

 

Recently confirmed orders, for delivery in the second half of 2013/14 and in the 2014/15 financial year reflect this pricing pressure and as a result the Board announced, on 23 October 2013, its revised expectation that the operating profit for 2013/14 will be c£90m (pre IAS19 adjustments).

 

FINANCIAL RESULTS

Amendments to the IAS19 accounting standard are effective for the 2013/14 financial year. This requires the replacement of the expected return on assets and interest charge on pension scheme liabilities with a net financing cost based on the discount rate as well as the recognition of the pension scheme administration costs in operating profit. The impact of IAS19 in the current period has been to reduce operating profit from £39.1m to £38.5m, comparatives have been restated as required by the standard.  

 

Group revenue fell by 5 per cent to £234.0m in the first half (2012/13: £245.4m).  However, Group operating profit before exceptional items (but after IAS19 adjustments) increased by 19 per cent to £38.5m (2012/13: £32.4m) reflecting the continued good progress on the cost reduction programme.

 

Profit before tax and exceptional items increased 20 per cent to £32.8m (2012/13: £27.4m).  Exceptional charges in the period of £4.4m (2012/13: £3.6m) relating to the Improvement Plan and a legacy indirect tax issue, result in a profit before tax of £28.4m compared with £23.8m in 2012/13.  Headline earnings per share increased by 24 per cent to 25.7p (2012/13: 20.7p).

 

Cash inflow from operating activities in the first half was £43.9m (2012/13: £11.7m) largely reflecting an improved working capital movement and the higher operating profit.  Net debt at 28 September 2013 was £88.7m up £12.0m since the year end due to the ongoing capital investment programme and payment of the 2012/13 final dividend.

 

Cash conversion (operating cash flow excluding exceptional items, special pension contributions and the movement in advance payments, less capital expenditure, divided by operating profit excluding exceptional items) in the period was 89 per cent (2012/13: negative 7 per cent).

 

DIVIDEND      

An interim dividend of 14.1p has been declared for the half year ended 28 September 2013 (2012/13: 14.1p). This will be paid on 8 January 2014 to shareholders on the register on 6 December 2013. 

 

 

OPERATING REVIEWS

 

Currency

 

Half Year

2013/14

 

Half Year

2012/13

 

Change

 

Banknote print volume (bn notes)

2.6

2.9

(10%)

Banknote paper output ('000 tonnes)

4.7

4.5

4%

 

 

Revenue

 

£m

145.4

 

£m 

139.7

 

 

4%

Operating profit*

23.7

22.4

6%

 

*Segmental operating profit is stated before exceptional items and IAS19 administration charges

 

Banknote print volumes at 2.6bn notes (2012/13: 2.9bn) were 10 per cent down on the corresponding period reflecting the timing of shipments between the first and second half of the current year.  Paper volumes at 4,700 tonnes were up 4 per cent compared with 2012/13 albeit with lower contributions on external paper sales, reflecting the continuing overcapacity in the banknote paper market.

                                   

Revenue grew by 4 per cent to £145.4m (2012/13: £139.7m) due to increased direct sales of low contribution banknote paper to certain state print works. Operating profit improved by 6 per cent to £23.7m (2012/13: £22.4m) largely reflecting the benefits from the ongoing cost reduction programme partially offset by the reduced print volumes and the adverse impact of the low margin paper sales.  The operating profit impact of foreign exchange in the period was minimal.

 

At the period end the 12 month order book, excluding currently suspended orders, was up 14 per cent at £180m (2012/13 year end: £158m).

 

Based on current manufacturing and shipment schedules we expect 2013/14 full year volumes to be c7bn banknotes and 10,700 tonnes of banknote paper.

 

Solutions

 

Half Year

2013/14

£m


Half Year

2012/13

£m

Change

 

Revenue:





  Cash Processing Solutions

32.0


37.8

(15%)

  Security Products

22.6


25.1

(10%)

  Identity Systems

40.7


45.7

(11%)

  Total Solutions

95.3


108.6

(12%)






Operating profit*





  Cash Processing Solutions

(3.2)


1.1

-

  Security Products

5.2


4.0

30%

  Identity Systems

13.4


5.7

135%

  Total Solutions

15.4


10.8

43%

 

*Segmental operating profit is stated before exceptional items and IAS19 administration charges

 

Cash Processing Solutions (CPS)

The CPS business performance was disappointing with lower revenues and an operating loss of £3.2m (2012/13: operating profit £1.1m) reflecting lower than expected sales of large sorters and upgrades to installed equipment.  A cost reduction programme has been initiated with a target of achieving break even in 2014/15 while maximising opportunities in the large projects currently being tendered by central banks.

 

Security Products

Although revenue fell in the period operating profit increased to £5.2m (2012/13: £4.0m), reflecting an improved mix of work and reduced costs following the relocation of manufacturing from Dunstable to the Gateshead factory.

 

Identity Systems

The Identity Systems operation has performed strongly in the first half.  Although revenue declined, largely as the corresponding period included one off sales in relation to the HM Passport Office regional office roll out project, operating profit increased to £13.4m (2012/13: £5.7m).  The increase in operating profit primarily reflects a strong performance within the International part of the business where an unusually high number of longer term contracts were completed in the first half.  The UK Passport contract continues to perform well and in line with expectations.

 

Solutions Order Book

At the period end, the Solutions 12 month order book was £52m (2012/13 year end: £49m).  These figures include committed orders but exclude regular call off orders which are variable in nature and not yet specifically confirmed.

 

Improvement Plan

The Improvement Plan has provided a strong focus on customers, revenue growth and cost reduction.  The Plan also included a programme of long term investment to improve manufacturing capability, quality and efficiency. The initiatives supporting the Plan have become even more important in the current more challenging trading conditions.  

 

Although good progress continues to be made on revenue growth initiatives, we have yet to see the full benefit of these activities owing to the more challenging market conditions in general and a more difficult pricing environment in particular.  Country plans are now firmly established throughout the business and are key to the sales planning process. We continue to invest in innovation, with a strong pipeline of new technologies, solutions and security features. Our new industry leading technology centre was recently completed and is now operational.  It will provide the platform for increased focus on and investment in research and development.

 

We are on track to achieve our increased cost reduction target of £40m per annum.  In addition to the cumulative £20m of annual savings we delivered by the end of 2012/13, a further £10m of annual savings have been generated in the first half.  An additional £10m of savings have been identified for delivery in the second half of 2013/14.  These savings are being achieved as planned through facility optimisation, targeted procurement initiatives and process improvement.

 

STRATEGY

De La Rue's historic strength lies in its relationships with central banks, governments and specialist commercial organisations. Looking ahead, and building on these strengths, our strategy is to be a lean, professional and innovative leader in the markets in which we operate.  We will focus on the Currency market and on selected markets within Solutions and concentrate on four key areas:

 

·    Focusing on and anticipating the needs of customers

·    Driving innovation and new product development to meet customer needs

·    Increasing the professionalism of all aspects of the business

·    Delivering operational excellence throughout the business through continuous improvement

 

In doing so we will ensure that employees are empowered and fairly rewarded as part of generating the performance culture our customers demand.

 

The successful execution of the strategy will provide shareholders with increasing value from each of our businesses and from the Group as a whole by delivering:

 

·    Sustainable revenue growth over the longer term

·    Improved profitability through continuous improvement

·    Strong cash flows

·    Increased returns to shareholders

 

Over the longer term, the outlook for the markets in which we operate remains positive despite the current challenging conditions.  We see attractive growth opportunities in both the Currency business and in certain parts of the Solutions division. The immediate focus in Cash Processing Solutions is to deliver a break even result in 2014/15.

 

Revenue Growth

We will continue to invest in new technologies throughout the business with a particular emphasis within Currency on security features for use in printed banknotes and polymer substrates sold to state print works. In both cases we see growth opportunities in excess of the underlying market growth rate.  This will reinforce our position as a leading integrated supplier and equip us to target many more opportunities in state paper mills and state print works.  Within Solutions we will invest further in the development of software solutions, particularly for the nascent government revenue solutions business where our new track and trace solution is now being marketed, and in security features to strengthen our position in the ePassport market.

 

Continuous Improvement

The Improvement Plan, in addition to delivering cost savings, has established a culture of continuous improvement.

 

A sustained focus on "lower level" improvement initiatives throughout the business will be complemented by specific investments and programmes to enhance the flexibility and responsiveness of the supply chain.  Together these will generate industry leading levels of customer service. This combined approach to continuous improvement will further enhance our competitive position, progressively reduce the volume sensitivity of the business and generate higher margins in the medium to longer term.

 

INTEREST

The Group's net interest charge was £2.1m (2012/13: £1.7m).  The IAS19 related finance cost, which represents the difference between the interest on pension liabilities and assets, was £3.6m (2012/13: £3.3m).

 

EXCEPTIONAL ITEMS

The results for the first half include £2.3m of exceptional operating charges relating to the ongoing costs of implementing the Improvement Plan (2012/13: £3.6m) in addition to £2.1m in respect of the resolution of a legacy overseas indirect tax issue.  Tax credits relating to these charges were £0.7m (2012/13: £5.0m comprising £0.9m for the period and £4.1m on prior year exceptional items).

 

UK PENSION SCHEME

Pension deficit

The valuation of the UK pension scheme under IAS19 indicates a scheme pre tax deficit, which represents a very long term liability, at 28 September 2013 of £198.7m (2012/13 full year: £166.7m).  The increase of £32.0m since the year end largely reflects a decrease in the discount rate used to value the scheme liabilities. In common with other final salary schemes, the scheme valuation is very sensitive to any movement in the discount rate and hence the deficit would reduce should interest and discount rates increase in the future. 

 

Recognition of the current deficit in accordance with IFRS results in the negative net assets shown on the balance sheet.  The arrangements in respect of the annual special pension funding payments remain unchanged and are expected to eliminate the deficit in line with the original timetable by 2022.

 

IAS19 - Employee Benefits

Amendments to the IAS19 accounting standard are effective for the 2013/14 financial year. This requires the replacement of the expected return on assets and interest charge on pension scheme liabilities with a net financing cost based on the discount rate as well as the recognition of the pension scheme administration costs in operating profit. IAS19 requires retrospective adoption and therefore prior periods have been restated.

 

The impact of the change has been to increase operating costs by £0.6m (2012/13: £0.8m), increase the net interest expense by £3.6m (2012/13: £3.3m), reduced taxation by £1.0m (2012/13: £1.0m), with compensating adjustments in other comprehensive income leaving equity unchanged. This has reduced profit after tax by £3.2m (2012/13: £3.1m) and reduces headline and basic EPS by 3.2p (2012/13: 3.1p).

 

The estimated impact for the 2013/14 full year is to reduce operating profits by £1.7m and increase the net interest expense by £6.7m, reduce tax by £1.9m and hence reduce headline and basic EPS by 6.5p.

 

2010 PAPER PRODUCTION ISSUES

Discussions remain ongoing with the principal customer concerned and the authorities, and therefore there remains uncertainty as to the ultimate outcome of these issues, including their financial impact (described more fully in note 11).

 

OUTLOOK

As previously announced, although the cost reduction plans are on target to deliver the planned cumulative savings of £40m per annum, the overcapacity in the banknote paper market has led to a more difficult pricing environment in the printed banknote market.  Accordingly the Board still expects operating profit for the current financial year to be c£90m (pre IAS19 adjustments).  This is an increase of over 40 per cent on the previous year and a 125 per cent increase on the performance in 2010/11 when the Improvement Plan began.

 

The Board is pleased with the level of order intake in the Currency division but still anticipates that the pricing environment in the second half of 2013/14 will continue throughout 2014/15.

 

 

Philip Rogerson                                                               Tim Cobbold

Chairman                                                                          Chief Executive

 

26 November 2013                                                                                 

 

-ends-

 

DIRECTORS REPORT

 

Principal risks and uncertainties  

Throughout its global operations De La Rue faces various risks, both internal and external, which could have a material impact on the Group's performance.  The Group manages the risks inherent in its operations in order to mitigate exposure to all forms of risks, where practical, and to transfer risk to insurers, where cost effective. 

 

The Group analyses the risks that it faces under the following broad headings: Strategic risks (technological revolution, changes to the market environment), General and legal risks (economic conditions, laws and regulations), Operational risks (loss of a key site or customer, reputational damage, product security and integrity, supplier failure, health and safety) and Financial risks  (timing of contract awards, currency risk, credit risk, liquidity risk, interest rate risk, commodity price risk). 

 

As described in the 2013 Annual Report, the principal risks include loss of a key site, loss of a key customer, timing of contract awards, failure to innovate, contract issues, product security and integrity, supplier failure, health and safety failure, environmental breach, breach of competition regulations, information security and actions of its employees and third parties. These risks, along with the risk management systems and processes used to manage them remain unchanged since the Annual Report was published.

 

The principal risks and uncertainties faced by the Group for the remaining six months of the year and the risk management systems and processes used to manage them are unchanged from those described further in the 2013 Annual Report, a copy of which is available at www.delarue.com or on request from the Company's registered office at De La Rue House, Jays Close, Viables, Basingstoke, Hampshire, RG22 4BS.

 

Going Concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out on pages 20 to 23 and 27 to 30 of the 2013 Annual Report. The accounting policies used in the preparation of the financial position are described in pages 65 to 70 of the 2013 Annual Report and note 1 to this document.  In addition, pages 79 to 84 of the 2013 Annual Report  include the Group's objectives, policies and processes for financial risk management, details of its financial instruments and hedging activities and its exposure to credit risk, liquidity risk and commodity pricing risk. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described on pages 24 to 26 of the 2013 Annual Report.

 

As described on page 26 of the 2013 Annual Report, the Group meets its funding requirements through cash generated from operations and a revolving credit facility which expires in December 2016. The Group's forecasts and projections, which cover a period of more than twelve months, taking into account reasonably possible changes in normal trading performance, show that the Group should be able to operate within its currently available facilities. The Group has sufficient financial resources together with assets that are expected to generate cash flow in the normal course of business. As a consequence and notwithstanding the net liability position being reported in the consolidated balance sheet, which has primarily arisen due to the value of the deficit in the retirement benefit obligations, or the uncertainty as to the outcome of the 2010 paper production issues summarised in note 11, the Directors have a reasonable expectation that the Company and the Group are well placed to manage their business risks and to continue in operational existence for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis in preparing the condensed interim financial statements.

 

A copy of the 2013 Annual Report is available at www.delarue.com or on request from the Company's registered office at De La Rue House, Jays Close, Viables, Basingstoke, Hampshire, RG22 4BS.

 

 

Responsibility Statement of the Directors in respect of the Interim Statement

 

We confirm that to the best of our knowledge:

 

·    the condensed set of  financial statements has been prepared in accordance with IAS34 'Interim Financial Reporting' as adopted by the EU;

 

·    the Interim Management Statement includes a fair review of the information required by:

 

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of  important events that have occurred during the first six months of the financial year and their impact on the condensed interim financial statement; and a description of the principal risks and uncertainties for the remaining six months of the year; and

 

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions to those described in the last Annual Report that could do so.

 

 

The Board

The Board of Directors that served during the six months to 28 September 2013 and their respective responsibilities can be found on pages 36 and 37 of the De La Rue plc Annual Report 2013.

 

For and on behalf of the Board.

 

Philip Rogerson

Chairman

26 November 2013  

 

INDEPENDENT REVIEW REPORT TO DE LA RUE PLC

 

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 28 September 2013 which comprises Group condensed consolidated interim income statement, the Group condensed consolidated interim balance sheet, the Group condensed consolidated interim statement of cash flows, the Group consolidated interim statement of changes in equity, and the related explanatory notes.  We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA"). Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

 

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.

 

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS34 Interim Financial Reporting as adopted by the EU.

 

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

 

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 28 September 2013 is not prepared, in all material respects, in accordance with IAS34 as adopted by the EU and the DTR of the UK FCA.

 

Ian Bone

Senior Statutory auditor

for and on behalf of KPMG LLP,

Statutory auditor

Chartered Accountants

15 Canada Square

London E14 5GL

26 November 2013

 

GROUP CONDENSED CONSOLIDATED INTERIM

INCOME STATEMENT - UNAUDITED

FOR THE HALF YEAR ENDED 28 SEPTEMBER 2013

 










2013/14

2012/13

2012/13




Half Year

Half Year Restated*

Full Year Restated*


Notes

£m

£m

£m


 






Revenue

 

2

234.0

245.4

483.7


Operating expenses - ordinary


(195.5)

(213.0)

(422.2)


Operating expenses - exceptional

3

(4.4)

(3.6)

(7.6)


Total operating expenses


(199.9)

(216.6)

(429.8)


Operating profit


34.1

28.8

53.9


Comprising:






Operating profit before exceptional items and IAS19R

2

39.1

33.2

63.2


Defined benefit pension administration costs (IAS19R)**


(0.6)

(0.8)

(1.7)


Exceptional items

3

(4.4)

(3.6)

(7.6)


 






 






Profit before interest and taxation


34.1

28.8

53.9


 






Interest income


0.1

0.1

0.2


Interest expense


(2.2)

(1.8)

(3.8)


Net retirement benefit obligation finance cost


(3.6)

(3.3)

(6.6)


Net finance expense


(5.7)

(5.0)

(10.2)


Profit before taxation


28.4

23.8

43.7


Comprising:

 

 

 

 


Profit before tax and exceptional items

 

32.8

27.4

51.3


Exceptional items

 

(4.4)

(3.6)

(7.6)


 

 

 

 

 

 


Taxation

- UK

4

(5.1)

0.6

(1.3)


 

- Overseas

4

(1.1)

(1.9)

(4.2)


Total taxation

 

(6.2)

(1.3)

(5.5)


Comprising:

 

 

 

 


Tax on profit before tax and exceptional items

 

(6.9)

(6.3)

(12.0)


Tax on exceptional items

3

0.7

5.0

6.5


 

 

 

 

 


Profit for the period


22.2

22.5

38.2


Comprising:






Profit for the period before exceptional items


25.9

21.1

39.3


(Loss) / profit for the period on exceptional items

3

(3.7)

1.4

(1.1)


 






Profit attributable to equity shareholders of the Company


21.9

22.0

37.2


Profit attributable to non controlling interests


0.3

0.5

1.0


 


22.2

22.5

38.2


 

 

 


Basic earnings per ordinary share

5

21.9p

22.1p

37.4p


Diluted earnings per ordinary share

5

21.7p

21.9p

36.9p


Impact of IAS19R



3.1p

5.9p


Basic earnings per ordinary share as previously reported



25.2p

43.3p


Diluted earnings per ordinary share as previously reported



25.0p

42.8p


 

 

*   Restated to reflect the amendments to IAS19 Employee Benefits - see note 1.

** The impact of IAS19R has been separately disclosed above as we consider this to be useful to the users of the accounts given the importance of the Group's operating profit target, which is before exceptional items and IAS19R.

 

GROUP CONDENSED CONSOLIDATED INTERIM

STATEMENT OF COMPREHENSIVE INCOME - UNAUDITED

FOR THE HALF YEAR ENDED 28 SEPTEMBER 2013

 








2013/14

2012/13

2012/13



Half Year

Half Year Restated*

Full Year Restated*



£m

£m

£m







Profit for the financial period

22.2

22.5

38.2







Other comprehensive income





Items that are not reclassified subsequently to profit or loss:





Re-measurement (losses) / gains on retirement benefit obligations

(28.5)

14.5

(29.5)


Tax related to re-measurement of net defined benefit liability

0.4

(4.8)

5.6


Items that may be reclassified subsequently to profit or loss:





Foreign currency translation difference for foreign operations

(1.6)

(3.7)

1.0


Change in fair value of cash flow hedges

(1.9)

(2.0)

(0.9)


Change in fair value of cash flow hedges transferred to profit or loss

(0.8)

1.9

2.1


Income tax relating to components of other comprehensive income

0.5

-

(0.1)







Other comprehensive income for the period, net of tax

(31.9)

5.9

(21.8)


Total comprehensive income for the period

(9.7)

28.4

16.4







Total comprehensive income for the period attributable to:





Equity shareholders of the Company

(10.0)

27.9

15.4


Non controlling interests

0.3

0.5

1.0



(9.7)

28.4

16.4

 

 

* Restated to reflect the amendments to IAS19 Employee Benefits - see note 1.

 

GROUP CONDENSED CONSOLIDATED INTERIM

BALANCE SHEET - UNAUDITED

AT 28 SEPTEMBER 2013

 










2013/14

2012/13

2012/13




Half Year

Half Year

Full Year



Notes

£m

£m

£m


ASSETS






Non current assets






Property, plant and equipment


185.8

164.5

179.7


Intangible assets


27.4

24.3

26.0


Investments in associates


0.1

0.1

0.1


Deferred tax assets


46.4

37.0

45.5


Derivative financial instruments

7

0.2

-

-


Other debtors


2.2

-

-




262.1

225.9

251.3


Current assets






Inventories


81.3

82.0

73.4


Trade and other receivables


84.1

95.0

89.2


Current tax assets


0.2

0.5

0.3


Derivative financial instruments

7

2.7

3.8

4.9


Cash and cash equivalents

8

41.3

24.3

24.8




209.6

205.6

192.6


Total assets


471.7

431.5

443.9








LIABILITIES






Current Liabilities






Borrowings

8

(130.0)

(88.2)

(101.5)


Trade and other payables


(171.3)

(166.6)

(167.4)


Current tax liabilities


(32.2)

(34.3)

(29.1)


Derivative financial instruments

7

(4.7)

(5.5)

(3.9)


Provisions for liabilities and charges


(21.8)

(36.6)

(26.0)




(360.0)

(331.2)

(327.9)


Non current liabilities






Retirement benefit obligations

9

(201.1)

(136.1)

(169.1)


Deferred tax liabilities


(2.4)

(1.6)

(2.8)


Derivative financial instruments

7

(1.1)

(0.4)

(1.2)


Provisions for liabilities and charges


(4.2)

(6.3)

(4.5)


Other non current liabilities


(7.3)

-

(5.0)




(216.1)

(144.4)

(182.6)


Total liabilities


(576.1)

(475.6)

(510.5)








Net liabilities


(104.4)

(44.1)

(66.6)








EQUITY






Ordinary share capital


45.9

45.8

45.8


Share premium account


32.2

30.8

31.9


Capital redemption reserve


5.9

5.9

5.9


Hedge reserve


(2.4)

(1.3)

(0.3)


Cumulative translation adjustment


(2.0)

(5.1)

(0.4)


Other reserves


(83.8)

(83.8)

(83.8)


Retained earnings


(105.0)

(40.6)

(70.4)


Total equity attributable to shareholders of the Company


(109.2)

(48.3)

(71.3)


Non controlling interests


4.8

4.2

4.7


Total equity


(104.4)

(44.1)

(66.6)







 

GROUP CONDENSED CONSOLIDATED INTERIM

STATEMENT OF CASH FLOWS - UNAUDITED

FOR THE HALF YEAR ENDED 28 SEPTEMBER 2013

 



2013/14

2012/13

2012/13



Half Year

Half Year Restated*

Full Year Restated*


Notes

£m

£m

£m

Cash flows from operating activities





Profit before tax


28.4

23.8

43.7

Adjustments for:





Finance income and expense


5.7

5.0

10.2

Depreciation and amortisation


15.6

12.6

26.3

Increase in inventories


(9.4)

(14.4)

(4.1)

Decrease / (increase) in trade and other receivables


7.0

(9.3)

(6.9)

Decrease in trade and other payables


(2.3)

(1.7)

(3.8)

Decrease in reorganisation provisions


(2.0)

(4.2)

(10.4)

Special pension fund contribution


-

-

(16.2)

Loss on disposal of property, plant and equipment


0.3

0.4

0.3

Other non cash movements


0.6

(0.5)

1.3

Cash generated from operations


43.9

11.7

40.4

Tax paid


(3.6)

(1.8)

(7.5)

Net cash flows from operating activities


40.3

9.9

32.9

Cash flows from investing activities





Purchases of property, plant and equipment (PPE) & software intangibles


(20.4)

(18.3)

(37.1)

Development expenditure capitalised


(1.7)

(1.1)

(3.7)

Proceeds from sale of PPE


0.1

0.2

0.2

Net cash flows from investing activities


(22.0)

(19.2)

(40.6)

Net cash flows before financing activities


18.3

(9.3)

(7.7)

Cash flows from financing activities





Proceeds from issue of share capital


0.3

0.2

1.3

Proceeds from borrowing


26.7

39.0

50.9

Interest received


0.1

0.1

0.2

Interest paid


(1.8)

(1.6)

(3.5)

Dividends paid to shareholders


(28.1)

(28.1)

(42.1)

Dividends paid to non controlling interests


(0.2)

(0.2)

(0.2)

Net cash flows from financing activities


(3.0)

9.4

6.6

Net increase / (decrease) in cash and cash equivalents in the period


15.3

0.1

(1.1)

Cash and cash equivalents at the beginning of the year


21.7

22.5

22.5

Exchange rate effects


(0.3)

(0.2)

0.3

Cash and cash equivalents at the end of the period

8

36.7

22.4

21.7

Cash and cash equivalents consist of:





Cash at bank and in hand


41.3

20.8

24.8

Short term bank deposits


-

3.5

-

Bank overdrafts


(4.6)

(1.9)

(3.1)


8

36.7

22.4

21.7

 

* Restated to reflect the amendments to IAS19 Employee Benefits - see note 1.

 

GROUP CONDENSED CONSOLIDATED INTERIM

STATEMENT OF CHANGES IN EQUITY - UNAUDITED

FOR THE HALF YEAR ENDED 28 SEPTEMBER 2013

 



Attributable to equity shareholders

Non controlling

interest

 

Total

equity

 



Share

capital

£m

Share

premium

account

£m

Capital

redemption

reserve

£m

Hedge

reserve

£m

Cumulative

translation

adjustment

£m

Other

reserve

£m

Retained earnings

£m

£m

£m


Balance at 31 March 2012

45.7

30.7

5.9

(1.2)

(1.4)

(83.8)

(45.4)

3.9

(45.6)


Total comprehensive income for the period

-

-

-

(0.1)

(3.7)

-

31.7

0.5

28.4


Transactions with owners of the company recognised directly in equity:











Share capital issued

0.1

0.1

-

-

-

-

-

-

0.2


Employee share scheme:











- value of services provided

-

-

-

-

-

-

1.0

-

1.0


Income tax on income and expenses recognised directly in equity

-

-

-

-

-

-

0.2

-

0.2


Dividends paid

-

-

-

-

-

-

(28.1)

(0.2)

(28.3)


Balance at 29 September 2012

45.8

30.8

5.9

(1.3)

(5.1)

(83.8)

(40.6)

4.2

(44.1)













Total comprehensive income for the period

-

-

-

1.0

4.7

-

(18.2)

0.5

(12.0)


Transactions with owners of the company recognised directly in equity:











Share capital issued

-

1.1

-

-

-

-

-

-

1.1


Employee share scheme:











- value of services provided

-

-

-

-

-

-

2.0

-

2.0


Income tax on income and expenses recognised directly in equity

-

-

-

-

-

-

0.4

-

0.4


Dividends paid

-

-

-

-

-

-

(14.0)

-

(14.0)


Balance at 30 March 2013

45.8

31.9

5.9

(0.3)

(0.4)

(83.8)

(70.4)

4.7

(66.6)













Total comprehensive income for the period

-

-

-

(2.1)

(1.6)

-

(6.3)

0.3

(9.7)


Transactions with owners of the company recognised directly in equity:











Share capital issued

0.1

0.3

-

-

-

-

-

-

0.4


Employee share scheme:











- value of services provided

-

-

-

-

-

-

0.2

-

0.2


Income tax on income and expenses recognised directly in equity

-

-

-

-

-

-

(0.4)

-

(0.4)


Dividends paid

-

-

-

-

-

-

(28.1)

(0.2)

(28.3)


Balance at 28 September 2013

45.9

32.2

5.9

(2.4)

(2.0)

(83.8)

(105.0)

4.8

(104.4)

 

NOTES TO THE CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS - UNAUDITED

 

 

 

1

 


 

NOTES TO THE CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS - UNAUDITED

 

 

 

2

SEGMENTAL ANALYSIS

 

 

The Group has two business units, Currency and Solutions.  Currency is a single operating unit.  Solutions consists of three operating units: Cash Processing Solutions, Security Products and Identity Systems.  The Board, which is the Group's Chief Operating Decision Maker, monitors the performance of the Group at an operating unit level and there are therefore four reportable segments.  The principal financial information reviewed by the Board, is revenue and operating profit before exceptional items, measured on an IFRS basis.

 

The Group's segments are:


·   

Currency - provides banknote paper, printed banknotes and banknote security features


·   

Solutions

Ø Cash Processing Solutions - primarily focused on the production of large banknote sorters and authentication machines for central banks, complimenting the Currency business



Ø Security Products - produces security documents, including authentication labels, brand licensing products, government documents, cheques and postage stamps



Ø Identity Systems - involved in the provision of passport, ePassport, national ID and eID, driving licence and voter registration schemes

 

Analysis by operating segment






2013/14

2012/13

2012/13



Half Year

Half Year Restated*

Full Year Restated*



£m

£m

£m


Revenue by operating segment










Currency

145.4

139.7

298.1


Solutions





   Cash Processing Solutions

32.0

37.8

61.2


   Security Products

22.6

25.1

45.1


   Identity Systems

40.7

45.7

84.4


Eliminations

(6.7)

(2.9)

(5.1)



234.0

245.4

483.7







Operating profit by operating segment










Currency

23.7

22.4

38.0


Solutions





   Cash Processing Solutions

(3.2)

1.1

-


   Security Products

5.2

4.0

8.9


   Identity Systems

13.4

5.7

16.3



39.1

33.2

63.2


Defined benefit pension administration cost - unallocated

(0.6)

(0.8)

(1.7)


Operating profit before exceptional items

38.5

32.4

61.5


Exceptional items - Currency

(1.8)

(1.5)

(1.8)


Exceptional items - Cash Processing Systems

(2.3)

-

-


Exceptional items - Security Products

(0.8)

(0.7)

(2.1)


Exceptional items - unallocated

0.5

(1.4)

(3.7)


Operating profit

34.1

28.8

53.9


Net finance expense

(5.7)

(5.0)

(10.2)


Profit before taxation

28.4

23.8

43.7


* Restated to reflect the amendments to IAS19 Employee Benefits - see note 1.

 

 

NOTES TO THE CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS - UNAUDITED

 


Analysis by operating segment (continued)






2013/14

2012/13

2012/13



Half Year

Half Year

Full Year



£m

£m

£m


Assets by operating segment










Currency

234.2

222.8

220.8


Solutions





   Cash Processing Solutions

51.1

48.8

49.3


   Security Products

25.9

19.6

21.8


   Identity Systems

36.9

43.9

45.5


Unallocated assets

123.6

96.4

106.5



471.7

431.5

443.9







Liabilities by operating segment










Currency

(124.1)

(108.3)

(112.2)


Solutions





   Cash Processing Solutions

(19.3)

(21.1)

(21.9)


   Security Products

(10.4)

(10.9)

(8.9)


   Identity Systems

(20.5)

(27.9)

(23.8)


Unallocated liabilities

(401.8)

(307.4)

(343.7)



(576.1)

(475.6)

(510.5)

 

3

EXCEPTIONAL ITEMS



2013/14

2012/13

2012/13



Half Year

Half Year

Full year



£m

£m

£m


Site relocation and restructuring

(2.3)

(3.6)

(7.6)


Legacy indirect tax issues

(2.1)

-

-


Total exceptional items

(4.4)

(3.6)

(7.6)







Exceptional items - tax

0.7

5.0

6.5







Exceptional costs of £2.3m (Half Year 2012/13: £3.6m, Full Year 2012/13: £7.6m) were incurred in the period in relation to the ongoing implementation of the Improvement Plan, in addition, £2.1m of charges were incurred in relation to the resolution of an overseas historic indirect tax liability. The cumulative exceptional charges taken in respect of the Improvement Plan is £34.0m.  The cash cost of exceptional items in the period was £6.1m (Half Year 2012/13: £7.5m, Full Year 2012/13: £17.3m).




Tax credits relating to exceptional items arising in the period were £0.7m (Half Year 2012/13: £0.9m, Full Year 2012/13: £2.1m).  There were no prior year tax credits on exceptional items in the period (Half Year 2012/13: £4.1m, Full Year 2012/13: £4.4m). 

 

4

TAXATION

 


A tax charge of 21.0 per cent (Half Year 2012/13: 23.1 per cent, Full Year 2012/13: 23.4 per cent) has been provided based on management's best estimate of the effective rate of tax for the year arising on the profits before exceptional items giving rise to tax for the period of £6.9m.  This is offset by tax credits of £0.7m on exceptional items as described in note 3.

 

NOTES TO THE CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS - UNAUDITED

 

 

 

5

EARNINGS PER SHARE




 



2013/14

2012/13

2012/13

 



Half Year

Half Year

Full year

 



pence per share

pence per share

Restated*

 pence per share Restated*

 


Earnings per share




 


Basic earnings per share

21.9

22.1

37.4

 


Diluted earnings per share

21.7

21.9

36.9

 


Headline earnings per share




 


Basic earnings per share

25.7

20.7

38.5

 


Diluted earnings per share

25.4

20.5

38.0

 


 

Earnings per share are based on the profit for the period attributable to equity shareholders as shown in the Group condensed consolidated income statement.  The weighted average number of ordinary shares used in the calculations is 99,779,861 (Half year 2012/13: 99,544,705) for basic earnings per share and 100,843,747 (Half Year 2012/13: 100,451,204) for diluted earnings per share after adjusting for dilutive share options.

 


 

The Directors are of the opinion that the publication of the headline earnings per share is useful as it gives a better indication of underlying business performance.

 

 






 


Reconciliations of the earnings used in the calculations are set out below.

 






 



2013/14

2012/13

2012/13

 



Half Year

Half Year Restated*

Full year Restated*

 



£m

£m

£m

 


Earnings for basic earnings per share

21.9

22.0

37.2

 


Exceptional items

4.4

3.6

7.6

 


Tax on exceptional items

(0.7)

(5.0)

(6.5)

 


Earnings for headline earnings per share

25.6

20.6

38.3

 


* Restated to reflect the amendments to IAS19 Employee Benefits - see note 1.

 

 

6

EQUITY DIVIDENDS



2013/14

2012/13

2012/13



Half Year

Half Year

Full year



£m

£m

£m


Final dividend for the year ended 30 March 2013 of 28.2p paid on

1 August 2013

28.1

-

-


Interim dividend for the period ended 29 September 2012 of 14.1p paid on 9 January 2013

-

-

14.0


Final dividend for the year ended 31 March 2012 of 28.2p paid on

2 August 2012

-

28.1

 

28.1



28.1

28.1

42.1


 

The Directors declared a dividend of 14.1p per share for the half year ended 28 September 2013 which will be paid on 8 January 2014 and will utilise £14.1m of shareholders' funds.  In accordance with IFRS the interim dividend has not been accrued in these condensed consolidated interim financial statements. 

 

 

NOTES TO THE CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS - UNAUDITED

 

 

7

FINANCIAL INSTRUMENTS








Carrying amounts versus fair values












The fair value of financial assets and liabilities, together with the carrying amounts shown in the balance sheet, are as follows:



Total fair

value

Sep 2013 £m

Carrying

amount

Sep 2013 £m

Total fair

value

Mar 2013 £m

Carrying

amount

Mar 2013 £m


Financial assets






Derivative financial instruments:






- Interest rate swaps

0.2

0.2

-

-


- Forward exchange contracts designated as cash flow hedges

0.8

0.8

3.3

3.3


- Short duration swap contracts designated as fair value hedges

0.1

0.1

0.1

0.1


- Foreign exchange fair value hedges - other economic hedges

1.7

1.7

0.6

0.6


- Embedded derivatives

0.1

0.1

0.9

0.9


Total financial assets

2.9

2.9

4.9

4.9








Financial liabilities






Derivative financial instruments:






- Forward exchange contracts designated as cash flow hedges

(4.0)

(4.0)

(3.5)

(3.5)


- Short duration swap contracts designated as fair value hedges

(0.1)

(0.1)

(0.1)

(0.1)


- Foreign exchange fair value hedges - other economic hedges

(0.1)

(0.1)

(1.3)

(1.3)


- Embedded derivatives

(1.6)

(1.6)

(0.2)

(0.2)


Total financial liabilities

(5.8)

(5.8)

(5.1)

(5.1)








Fair value measurement basis for derivative financial instruments








Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date.








The valuation bases are classified according to the degree of estimation required in arriving at the fair values. Level 1 valuations are derived from unadjusted quoted prices for identical assets or liabilities in active markets, level 2 valuations use observable inputs for the assets or liabilities other than quoted prices, while level 3 valuations are not based on observable market data and are subject to management estimates. The financial assets and liabilities detailed in the above table are level 2 valuations. The details of how the fair value of each class of financial instrument is determined are covered on page 80 of the Group's Annual Report 2013.

 

Financial risk management

 

The Group's financial risk management objectives and policies are consistent with those disclosed in the Group's Annual Report 2013.

 

 

 

NOTES TO THE CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS - UNAUDITED

 

 

 

8

ANALYSIS OF NET DEBT



2013/14

2012/13

2012/13



Half Year

Half Year

Full year



£m

£m

£m







Cash at bank and in hand

41.3

20.8

24.8


Short term bank deposits

-

3.5

-


Bank overdrafts

(4.6)

(1.9)

(3.1)


Cash and cash equivalents

36.7

22.4

21.7


Other debt due within one year

(125.4)

(86.3)

(98.4)


Borrowings due after one year

-

-

-


Net debt at end of period

(88.7)

(63.9)

(76.7)

 

The Group has a revolving credit facility of £200m. As the draw downs on this facility are typically rolled over on terms of between one and three months the borrowings are disclosed as a current liability. This is notwithstanding the long term nature of this facility which expires in December 2016.

As at 28 September 2013, the Group has a total of undrawn committed borrowing facilities, all maturing in more than one year, of £69.7m (29 September 2012: £88.6m in more than one year). The amount of loans drawn on the £200m facility is £125.4m. Guarantees of £4.3m have also been drawn using the facility.

 

9

RETIREMENT BENEFIT OBLIGATIONS

 





The Group has pension plans covering the majority of employees and these plans are devised in accordance with local conditions and practices in the country concerned.  The assets of the Group's plans are generally held in separately administered trusts or are insured.








2013/14

2012/13

2012/13



Half Year

Half Year Restated*

Full year Restated*



£m

£m

£m


UK retirement benefit obligations

(198.7)

(133.9)

(166.7)


Overseas retirement benefit obligations

(2.4)

(2.2)

(2.4)


Retirement benefit obligations

(201.1)

(136.1)

(169.1)


Deferred tax

40.4

31.5

39.0


Net retirement benefit obligations

(160.7)

(104.6)

(130.1)







The majority of the Group's retirement benefit obligations are in the UK:








£m

£m

£m


At 30 March 2013 / 31 March 2012

(166.7)

(143.3)

(143.3)


Current service cost included in operating profit

-

(4.1)

(7.8)


Administrative expenses

(0.6)

(0.8)

(1.7)


Curtailments

-

-

-


Net interest cost

(3.6)

(3.3)

(6.6)


Re-measurement (losses) and gains arising over the period

(28.5)

14.5

(29.7)


Cash contributions and benefits paid

0.7

3.1

22.4


At 28 September 2013 / 29 September 2012 / 30 March 2013

(198.7)

(133.9)

(166.7)

 

 

NOTES TO THE CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS - UNAUDITED

 

 

9

RETIREMENT BENEFIT OBLIGATIONS continued






2013/14

2012/13

2012/13



Half Year

Half Year Restated*

Full year Restated*


Amounts recognised in the consolidated Balance Sheet:

£m

£m

£m


Fair value of plan assets

757.1

734.9

761.1


Present value of funded obligations

(948.2)

(861.8)

(920.2)


Funded defined benefit pension plans

(191.1)

(126.9)

(159.1)


Present value of unfunded obligations

(7.6)

(7.0)

(7.6)


Net liability

(198.7)

(133.9)

(166.7)







Amounts recognised in the consolidated Income Statement:





Included in employee benefits expense:





Current service cost

-

(4.1)

(7.8)


Administrative expenses

(0.6)

(0.8)

(1.7)







Included in net finance cost:





Net retirement benefit obligation finance cost

(3.6)

(3.3)

(6.6)







Total recognised in the consolidated Income Statement

(4.2)

(8.2)

(16.1)


* Restated to reflect the amendments to IAS19 Employee Benefits - see note 1.







Principal actuarial assumptions:

2013/14

2012/13

2012/13



Half Year

Half Year

Full year



UK

UK

UK



%

%

%


Future salary increases

-

-

-


Future pension increases - past service

3.70

3.40

3.70


Future pension increases - future service

3.20

2.60

3.30


Discount rate

4.30

4.20

4.50


Inflation rate

3.30

2.60

3.40









The mortality assumptions used to assess the defined benefit obligation for the UK plan are based on tables issued by the Continuous Mortality Investigation Bureau. At 28 September 2013, 29 September 2012 and 30 March 2013 mortality assumptions were based on the PxA92 birth year tables multiplied by a rating of 125% and allowance for medium cohort mortality improvements in future, with a 0.5% mortality improvement underpin.   The resulting life expectancy for a 65 year old pensioner is 20.6 years.

 

 

10

RELATED PARTY TRANSACTIONS

 


During the year the Group traded with Fidink (33.3% owned).

 

The Group's trading activities with Fidink in the period comprise £9.3m for the purchase of ink and other consumables on an arms length basis.  At the balance sheet date there was no outstanding balance with this company.

 

 

NOTES TO THE CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS - UNAUDITED

 

 

11

CONTINGENT LIABILITIES


De La Rue has extensive international operations and is subject to various legal and regulatory regimes, including those covering taxation matters. While the outcome of litigation and other disputes can never be predicted with certainty, having regard to legal advice received and the insurance arrangements of the Company and its subsidiaries, the Directors believe that adequate provision has been made to cover these matters.   The Group provides guarantees and performance bonds which are issued in the ordinary course of business.  In the event that a guarantee or bond is called provision may be required subject to the particular circumstances, including an assessment of its recoverability.

In July 2010 the Board commissioned an investigation by external lawyers into issues that had been brought to its attention internally. The investigation, which was completed in October 2010, found nothing of substance to support the matters raised other than in respect of some paper production issues where it was found that a small number of the many detailed specification parameters of some paper had fallen marginally short of specification. It was also established that certain paper specification test certificates had been deliberately falsified. The Board reported the findings of the investigation to the appropriate authorities, who are considering the matter, and has implemented a number of measures arising from the findings of the investigation.

Provision has been made in prior years for the costs associated with the paper production issues identified at this stage including the write off of trade receivables and other costs relating to the investigation, production and rectification of these matters.

Provision has not been made for the potential cost of resolutions or for potential fines from regulatory authorities. The nature and extent of these resolutions will be the subject of ongoing discussions, the outcome of which cannot be estimated reliably at present. The timing, response and outcome of the consideration by the authorities of the reported findings of the investigation is also uncertain and the financial consequences, if any, cannot be estimated reliably at present.

 

 

12

CAPITAL COMMITMENTS






2013/14

2012/13

2012/13



Half Year

Half Year

Full year



£m

£m

£m


The following commitments existed at the balance sheet date:





Contracted but not provided for in the accounts

19.9

10.6

19.9

 

13

DE LA RUE FINANCIAL CALENDAR: 2013/14










Ex dividend date for interim dividend

4 December 2013




Record date for interim dividend

6 December 2013




Payment of interim dividend

8 January 2014




Financial year end

29 March 2014



 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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