Banknote maker De La Rue has announced that it will be conducting an equity raising, seeking £100m in gross proceeds in order to invest in its turnaround plan.
The De La Rue share price has increased by 300% since mid-May to 160p, following a strong surge in a previous trading update that indicated it was a resilient business despite the pandemic.
In an announcement to the market, De Lla Rue revealed that it will use the proceeds to provide the company with the ‘operational and financial flexibility’ to carry out its proposed turnaround plan announced earlier in the year.
Specifically, it will be looking to use some of the investment to cover growth in in its authentication division as well as invest in some of the security features business for the group.
Operational efficiency will look to be enhanced with investment in new equipment, specifically to double the currency’s division capacity for polymer production.
Clive Vacher, CEO looked to reassure investors that they’d be backing a winner if they participate:
“Earlier this year we announced a three-year Turnaround Plan to restore the Company’s financial performance and return it to growth. I am pleased to report that we are already delivering strong results on this front.
“Today we are launching a £100 million gross equity raise which will provide the Company with the financial and operational flexibility to ensure the Turnaround Plan’s success. With this capital we will be able to strengthen our balance sheet, reduce our costs and invest in the exciting growth opportunities we see in Authentication, polymer banknote production and security features. I firmly believe this will drive improved returns and create long-term value for our shareholders.”