Bank note printer De La Rue says strong performance has helped to offset the loss of its 海角视频 Passport contract, which triggered North East job losses.
The company, which still has a small number of staff at its Gateshead site, also operations in Bolton, Basingstoke and Debden. It said adjusted operating profit for the six months ended September 25 2021 was up by 165.6% to £17.0m and that its turnaround plan and cost reduction activities continue to strengthen performance compared to the last two years’ comparable periods.
It also said its turnaround plan and cost reduction activities continue to strengthen performance compared to the last two years’ comparable periods.
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Revenues rose almost 1% to £179.2m, while operating profit from continuing operations was up 200% to £13.8m.
It said trading to date for the full year has been positive and the outlook continues to be in line with the board’s expectations.
It said IFRS operating profit was £13.8m, up from £4.6m, as the previous half year included charges of £10.2m – a figure which included significant charges relating to the cessation of banknote printing at the group’s Gateshead facility.
Adjusted operating profit was £17.4m, which includes 165.6% growth in its two ongoing divisions, which its said more than offsets the impact of the loss of the 海角视频 passport contract.
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The listed company, which produces banknotes and passports for countries around the world, stopped its 海角视频 passport operations in Gateshead during the first half of the 2020/21 financial year, after losing the contract to print the post-Brexit blue passports two years ago, to Franco-Dutch firm Gemalto.
The results included £1.5m of restructuring charges relating to the end of banknote production at Gateshead, mostly the costs of relocating equipment to different manufacturing locations.
The firm made big changes at the Gateshead site in December 2020, taking the decision to stop printing banknotes at Team Valley after many decades, massively reducing its North East workforce to leave a team which works in the currency and authentication divisions.
In January the company revealed it was opening a new facility at Westhoughton, near Bolton, to specialise in manufacturing De La Rue’s Safeguard polymer substrate, which is used in its banknotes.
Clive Vacher, chief executive officer of De La Rue, said: “Our first half results have shown substantial improvement in the group’s financial and operational performance. We continue to make progress in executing our Turnaround Plan, which is delivering both operating improvements and cost reductions.
“These, coupled with our increasing market competitiveness, have resulted in stronger adjusted operating profit and excellent cashflows generated from operating activities. The results from our two ongoing divisions, authentication and currency, have more than offset the cessation of the 海角视频 passport contract last financial year.
“We are continuing to invest in authentication and currency in line with our turnaround plan. In H1 2021/22, we announced a substantial expansion of our facility in Malta that will increase manufacturing capacity and flexibility for both divisions.
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“We will achieve this additionally without exceeding the original total turnaround investment of £79.8m. Our polymer expansion plans in the 海角视频, which will see a doubling of production capacity, are on track, with the new production line being operational early in Q4 this financial year.
“We continue to monitor and work to mitigate headwinds in commodity and energy costs, and challenges in the supply chain. The De La Rue team has additionally overcome some Covid-19 disruption in H1 2021/22, and I am pleased that we have performed strongly despite these challenges.”