De La Rue Share News (DLAR)

- Adjusted profits rise 20 per cent- Revenues fall as banknote print volumes slip- 'More difficult pricing environment' in printed banknotesOngoing cost savings meant that De La Rue managed to increase profits by a fifth in the first half despite a slip in banknote print volumes.The banknote printer, ID systems and cash processing group reported a profit before tax and exceptional items of £32.8m in the six months to September 28th, up 20% from £27.4m the year before."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 company said.However, group revenues fell by 5% from £245.4m to £234m.In the Currency division, which accounts for around 60% of sales, revenues were up 4% at £145.4m. Banknote print volumes were down 10% due to the timing of shipments between the first and second half. This was offset by a 4% improvement in paper volumes, "albeit with lower contributions on external paper sales, reflecting the continuing overcapacity in the banknote paper market".In De La Rue's Solutions business, revenues declined by 12% to £95.3m as the company experienced lower sales in the Cash Processing Solutions, Security Products and Identity Systems units.Nevertheless, the 12-month order book was £232m, up £25m since the start of the period. Currency orders were particularly strong and up 14% at £180m. Meanwhile, the dividend per share was held at 14.1p.The company assured that it would meet its operating profit target of £90m this year - representing 40% growth - but warned that the overcapacity in the banknote paper market has led to a "more difficult pricing environment" in the printed banknote market."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."BC