Banknote printer De La Rue has seen its half yearly pre-tax profit rise to £32.8m, up 20% on the same period last year.
The firm, which operates from a site in Gateshead said good progress had been made in the six months to September 28, 2013, on its ongoing cost reduction programme, which has achieved £10m of savings, putting it on track to deliver its targets by the end of the year.
Revenue at the company, believed to be the world’s largest integrated commercial banknote printer, fell by 5% from £245.4m over the six months to £234m compared with a year ago.
De La Rue, which was founded in Guernsey in 1813 and first listed on the Stock Exchange after the Second World War, announced in May it was accelerating its cost-cutting strategies, aiming to make annual savings of £40m, driving a targeted operating profit of more than £100m.
The group’s 12 month closing order book at 28 September, 2013, was £232m, up £25m since the year end, of which currency orders were up 14% at £180m.
Banknote print volumes were down 10% to 2.6bn notes, a figure it said was down to the timing of shipments between the first and second half of the current year.
Tim Cobbold, chief executive officer, said the firm has made good progress in a challenging market. He said: “Overall De La Rue performed well in the first half with operating profits up 18% at £39m, on slightly lower revenues.
“This improvement, despite more challenging trading conditions, reflects the good progress made on the ongoing cost reduction programme which is on track to meet the targets for the year.
“As previously announced the current overcapacity in the banknote paper market has led to a more difficult pricing environment in the printed banknote market.
“Accordingly the board still expects operating profit for the current financial year to be circa £90m.
“This is an increase of over 40% on the previous year and a 125% increase on the performance in 2010/11 when the improvement plan began.
“Despite the challenging market De La Rue is in good shape and benefiting from the many initiatives within the improvement plan.”
As part of its efficiency drive, De La Rue earlier this year closed two factories in the South of England, saving £6m a year, and relocated work to its Team Valley factory.
It increased staffing levels there by 100 to 400 and has invested around £13m in the Gateshead site since 2010.
De La Rue, which produces more than 150 national currencies and makes security documents including passports and driving licences, won the Queen’s Award for Enterprise for the 12th time in its 200-year history in April, for OptiksTM, one of its anti-counterfeit technologies.