British banknote maker boosted by produce new banknotes for Iraq.

Guardian ^ | 09/20/03 | Geoff Gibbs

[Pikamax]

British banknote maker boosted

Geoff Gibbs Saturday September 20, 2003 The Guardian

De La Rue, the world's largest commercial security printer, is heading for an unexpectedly large first half profit after beating the deadline to produce new banknotes for Iraq. The British firm was awarded the contract to print the new Iraqi dinar by the coalition provisional authority in July, when it was given a target issuance date of October.

But De La Rue, which is involved in the production of national currencies for more than 150 countries, disclosed yesterday that deliveries of the new notes have already begun. Further significant deliveries are expected in the remainder of the first half of its financial year.

Production of a new series of notes is designed to unify the currency across Iraq and address the problem of the poor quality of notes in circulation.

The company said at its annual meeting two months ago that work on the Iraqi contract would be concluded in the present financial year, which runs to the end of March 2004.

Although De La Rue refuses to discuss the details of such contracts, City analysts believe the work could account for about £8m of the £48m profit they are pencilling in for the group for the year.

In a trading update yesterday, directors reported that underlying trading during the first half had been in line with expectations and that the group's cost reduction programme was continuing on schedule.

"Accordingly, as a result of the earlier than anticipated deliveries of the Iraq banknote order, the group expects to report interim results significantly ahead of expectations previously indicated at the time of the annual meeting in July," they told investors. De La Rue shares rose 6% to close at 306.5p.