De la Rue to report on Wednesday

De La Rue will announce its full-year figures for 2013 on Wednesday. The consensus is for an operating profit of £89 million and revenue of £512 million.

Despite being the world’s largest banknote printer by market share, De La Rue has issued two profit warnings in the past 18 months. The company has cited increased competition for the reason behind the warnings. The stock is trading at 799; it has fallen 25% since the profit warning in November 2012 and is not showing any signs of recovery from the warning in October 2013.

De La Rue was contracted by the Bank of England to print sterling notes, but the firm lost a portion of its business when the BoE revealed that Innovia would be providing the polymer for the new plastic notes it intends to use.

As the company has issued two profit warnings in the less than two years, expectations have been managed to the downside. Slightly better-than-expected figures could drive the price towards 872, but if profits are poor we could breach the 2014 low of 737.

De La Rue chart

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.