Shares digital

Banknote printer De La Rue is expected to unveil a series of corporate changes at its full-year results later this month, potentially including a higher dividend and plans to return up to £4 a share to investors if it sells the cash systems arm.

Such activities may attract significant interest from the City when the results are published on 22 May, but it is the recent 12% drop in the share price that has prompted Evolution analyst Andrew Darke to upgrade his rating on the stock to add from reduce. He was spooked by the company’s high rating at the start of 2008, but says the recent share price weakness has put the shares back on a more ‘attractive’ valuation.

If De La Rue does decide to strip back its business to just the security paper and print operations, this would still leave an attractive company, says Darke, with ‘significant entry barriers, strong cash generation and solid growth prospects, albeit currently close to peak margins.’

by Dan Coatsworth