De La Rue Plc rose the most in more than two years after the world’s biggest banknote printer said some delayed orders had been received.
The company expects to meet its forecasts for this fiscal year and is confident of increasing operating profit next year by more than 100 million pounds ($157 million), Basingstoke, England-based De La Rue said in a statement today. The shares gained 5.7 percent, the biggest advance since December 2010.
“The company has enough confidence in its performance to reiterate its guidance for 2014 full-year operating profit,” Alexander Mees, an analyst at JPMorgan Chase & Co., said in a note. He has an overweight recommendation on the stock and raised his price target to 1,170 pence from 1,140 pence.
The Bank of England wanted expressions of interest by yesterday for a 10-year contract starting in April 2015 to print an estimated 12 billion banknotes. De La Rue has held the contract since the bank appointed an external printer in 2003. De La Rue should retain the contract, Mees said in December.
The stock closed at 953.5 pence in London trading. The volume of shares traded was almost double the three-month daily average.
Mees had lowered his earnings estimates in November when De La Rue said a “handful” of currency print orders were delayed. “We see De La Rue as well-placed to maintain and increase its share of a growing market,” he said today.
Order intake since the start of October has been satisfactory as some delayed orders have come through while others are still to be confirmed, De La Rue said in the statement.
Thomas Rands, an analyst at Investec Plc, upgraded his recommendation on the stock to buy from hold and raised his price target to 960 pence from 940 pence.
De La Rue failed to win a contract with the Chinese government that would have added 2,500 metric tons of paper production to its order book, the Times of London said Jan. 28, citing unidentified company “insiders.”
De La Rue didn’t comment on the Chinese contract in today’s statement.