Prior to entering the close period for the year ended 25 March 2006, the Board of De La Rue plc issued the following trading update:
Trading since the half year has been strong throughout the Group, aided by the continued benefits of productivity initiatives and the strength of the U.S. dollar.
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Within Security Paper and Print, banknote volumes in the second half have been stronger than anticipated and levels are now expected to exceed last year. In addition, favourable customer mix has led to an improvement in margins in both the banknote and banknote paper activities. The division has also benefited from ongoing cost reduction and productivity initiatives. Consequently, operating profits are expected to be ahead of last year.
Cash Systems has continued to benefit from earlier than anticipated progress on the manufacturing rationalisation programme outlined in December 2004, and the strength of the U.S. dollar. However, the first half of 2006/2007 will see the critical phase in the completion of this programme. Growth in the Original Equipment Manufacture (mechanisms for ATMs), particularly in the Asian market, and the Desktop Products businesses has been ahead of our expectations.
Consequently, the Board now expects full year profit before tax, exceptional items and goodwill to be significantly ahead of 2004/2005 (on a comparable IFRS basis).
De La Rue anticipates entering the new financial year with good visibility for the first half in Security Paper and Print. The Board therefore remains confident of the outlook for 2006/2007.
16 February 2006
