De La Rue H1 profit falls

Britain's De La Rue, the world's largest non-government printer of banknotes, reported a 6-percent fall in first-half profit, hit by one-off charges, but said demand remained strong.

The company, which has a major plant in Malta, produces notes in over 150 national currencies and security documents such as passports. It posted a pretax profit of 44.2 million pounds ($73.4 million) on sales, 3 percent higher at 252.2 million pounds in the six months to Sept. 26.

Movements in the value of sterling against the U.S. dollar and euro added 14 million pounds to revenues but profits were hit by the cost of reorganising its cash processing arm.

Demand for bank notes is driven by rising Gross Domestic Product and the recirculation policy of nations as well as the need for higher quality bank notes to counter increased counterfeiting activity.

"The underlying requirement for banknotes is as strong today as it was three years ago so I don't see any indication that there is any weakness in volume," Chief Executive James Hussey told Reuters in an interview.

Earlier this year the group won a 10-year contract worth 400 million pounds to design and produce biometric UK passports and hopes the deal will help it win more lucrative passport work.

"The UK passport deal builds our credibility, giving us a customer in the first world, where we have traditionally operated in the second and third world. It potentially brings us into a new space," said Hussey.

The company, which increased the dividend by 3 percent, said margins improved by 2.4 percentage points to 20.2 percent, helped by an unusually favourable mixture of work won by its currency unit.