De la Rue profits warning

[Bouleversee]

The buying opportunities are coming thick and fast. Are any others strategically ignorant enough still to hold De la Rue, which has announced, in the middle of a profits warning, that its CFO is departing "to pursue his career outside of the company" . The share price fell dramatically and is now back to what it was 5 yrs ago, with a p/e of 12.82 and yield of 5.18%. I inherited some of these from my husband, worth very little now. JP Morgan Cazenove are recommending overweight, with a target of 700p. Am debating whether to top up or whether it would be throwing good money after bad. I seem to remember seeing it mentioned on the HYP board years ago but not sure whether it would be considered a HYP candidate; how choosy can we be these days?

[monabri]

The buying opportunities are coming thick and fast. Are any others strategically ignorant enough still to hold De la Rue, which has announced, in the middle of a profits warning, that its CFO is departing "to pursue his career outside of the company" . The share price fell dramatically and is now back to what it was 5 yrs ago, with a p/e of 12.82 and yield of 5.18%. I inherited some of these from my husband, worth very little now. JP Morgan Cazenove are recommending overweight, with a target of 700p. Am debating whether to top up or whether it would be throwing good money after bad. I seem to remember seeing it mentioned on the HYP board years ago but not sure whether it would be considered a HYP candidate; how choosy can we be these days?

Definitely not a buy...not even remotely.

Negative equity ( liabilities exceed assets) and falling revenues.

[Bouleversee]

Thaks, Mon. I must say they have never appealed to me in the past. I wonder why they are being recommended with a t.p. of 700p.
Let's see who the new chap is and how he shapes up.

[UncleEbenezer]

They seem to be adopting the Ryanair strategy: very publicly throw toys out of the pram when crossed.

Give us licence to name our price in taxpayers money!

[robbelg]

It might well work.

There's a lot of angry voices about the passport contract going abroad, I think there's a good chance that DLAR will end up with the contract.

Competitive bidding can be overruled by "National Security"


Rob

[monabri]

Can you imagine the French giving such a contract to the Brits?

[vrdiver]

DLAR print security paper (passports, banknotes) for a lot of countries, so claiming that the UK should keep it in house rather goes against what most of their customers do. It's a poor argument at best, when you consider that companies involved in security products (arms, money, passports, surveillance) many of them British, only exist by selling to foreigners, the idea that a government shouldn't purchase from abroad falls at the first hurdle.

My last recollection of DLAR hitting the news was something about making a mess of some Indian notes? Seems like they are not quite the "best in class" and have been treated as such (neither cheapest nor most reliable).

VRD

[ayshfm1]

I don't know the detail of the passport case but I do have some experience of business in France. It is not a level playing field, I see no reason why we should play fair.

As members of the EU we were an easy mark, we followed the rules they ignored them. I saw countless examples working for a French firm. One of the worst - many UK people sent in job applications for jobs that had been designated for French people only, they didn't know it but they were wasting their time. Totally illegal under EU rules, known about and ignored.

Post the EU we should finally be free to reciprocate.

Still enough anti EU ranting, UK passports should be produced by a UK firm, we need to control completely their production, that they might not is likely down to a pro EU civil servants causing mischief. Again I've been involved in enough procurement exercises to know that the "winner" can be selected by simply adjusting the weightings. In this case applying proper weighting to national security would have done the trick.

In fact as far as "rules" are concerned in business - "There is no spoon".

(Disclosure) I hold DLAR it's been a woeful investment

[Bouleversee]

I also hold so would have liked them to get the contract. From a security point of view, however, I have heard that the relevant bits will continue to be produced here; also that at the moment some of the components are produced abroad. What I'd like to know is how the French can fulfil the contract, whatever that entails, for £50m less than De la Rue's quote or is that a fleabite in this context? Perhaps the Government should have given De la Rue an opportunity to match the French quote though I suppose that would be against the rules. I wonder what the contract covers and what the total cost is.

[monabri]

I don't know the detail of the passport case but I do have some experience of business in France. It is not a level playing field, I see no reason why we should play fair.

As members of the EU we were an easy mark, we followed the rules they ignored them. I saw countless examples working for a French firm. One of the worst - many UK people sent in job applications for jobs that had been designated for French people only, they didn't know it but they were wasting their time. Totally illegal under EU rules, known about and ignored.

Post the EU we should finally be free to reciprocate.

Still enough anti EU ranting, UK passports should be produced by a UK firm, we need to control completely their production, that they might not is likely down to a pro EU civil servants causing mischief. Again I've been involved in enough procurement exercises to know that the "winner" can be selected by simply adjusting the weightings. In this case applying proper weighting to national security would have done the trick.

In fact as far as "rules" are concerned in business - "There is no spoon".
G
(Disclosure) I hold DLAR it's been a woeful investment

I used to work for a Anglo-French company..a 50:50 alliance supposedly...with 8 French directors and a solitary Brit.
As for rules....they could get away with things (exports to "other countries" shall we say) that we were simply not allowed to do.

[absolutezero]

It might well work.

There's a lot of angry voices about the passport contract going abroad, I think there's a good chance that DLAR will end up with the contract.

Competitive bidding can be overruled by "National Security"


Rob

I suspect this is probably what will happen.

[absolutezero]

I don't know the detail of the passport case but I do have some experience of business in France. It is not a level playing field, I see no reason why we should play fair.

As members of the EU we were an easy mark, we followed the rules they ignored them. I saw countless examples working for a French firm. One of the worst - many UK people sent in job applications for jobs that had been designated for French people only, they didn't know it but they were wasting their time. Totally illegal under EU rules, known about and ignored.

The problem is, the British are a sporting nation so we play by the rules.
Silly us.

[ayshfm1]

Mine was solidly French and regarded by the French state as economically important for the area. When it got into financial difficulties it received a state bailout, which was again illegal under EU rules. However no one batted an eyelid.

You learned fast how the game was played.

It's not that I disliked the EU quite the contrary to be honest I just wished the civil servants in Whitehall would play the same game their French opposite numbers were in the Palais de l'Elysée. Sadly they never learned.

[AleisterCrowley]

I ... I've been involved in enough procurement exercises to know that the "winner" can be selected by simply adjusting the weightings. In this case applying proper weighting to national security would have done the trick.
...

t

Ah yes, very true.
Alter the subjective scores and weightings until the answer you wanted at the start pops out...and it's demonstrably fair and balanced!
Only useful for eliminating bids where a basic 'tick box/must have' requirement isn't present. The rest is bovine ordure

[westmoreland]

i don't like companies that have to bid for work - it's a weak business model unless their expertise / offering is valued higher than rivals.

sustainability of the dividend is important in protecting downside when a business goes through rough patches. from 2013-15 the dividend was not covered by free cash flow, and has only just been covered in the last 2 years. any further trouble and the dividend is in trouble IMO.

[vrdiver]

Well, today's RNS tells us that De La Rue won't be appealing the passport tender.

Share price is down 5% as I write.

Full year revenue for the Group is expected to increase by c6% year on year, with growth across all product lines. Full year underlying operating profit is anticipated to be in the low to mid £60s million range, reflecting the write off of the c£4m bid costs related to the UK passport tender and delays in the shipment of certain contracts in the last week of the period.

At this early stage of the new financial year, the Group is cautious about the outturn for the full year, however starts off with a satisfactory order book underpinned by 16% growth in total order intake driven by strong growth in Identity Solutions and Product Authentication.

The paper transaction announced on 1 February was completed on 30 March 2018. This has strengthened the Group's balance sheet, with net debt significantly reduced to c£55m as at 31 March 2018.

Further to the announcement on 22 March 2018 and having considered all options, the Group today announces it will not appeal against HMPO's decision on the UK passport tender. De La Rue will continue to fulfil its existing contract and assist with transition to the new supplier and is therefore expecting no impact on the Group's performance in the next 18 months.

VRD

[Breelander]

Well, today's RNS tells us that De La Rue won't be appealing the passport tender.

https://www.investegate.co.uk/de-la-rue ... 00042463L/

[TUK020]

My favourite April Fool's joke this year:

The EU commission did a press release on the morning of April 1st to announce that all EU passports would be switching from burgundy to Royal Blue....

[westmoreland]

the pension deficit alone is £189m - equal to about 7 years of their free cash flow.

[Bouleversee]

According to City AM, Woodford-backed Crystal Amber has increased its stake in De la Rue so perhaps we shouldn't rush to sell at this juncture.