3 weeks ago I wrote an article on shareworld about De La Rue. The share price had suffered due to some quality problems, and although I thought it looked cheap, I was looking for a better entry point than 700p - preferably 600p.
Today De La Rue announced an update on the quality problems. To me this looks like good news - the recognized financial impact so far has been a meagre £35m before tax (£25m after tax) vs a drop in market cap of almost £300m. Although the final bill will likely be higher, I find it hard to believe it will be more than 10 times higher.
The market disagreed, and at one point De La Rue had dropped almost 10% to 640p. I didn't manage to move quickly enough to get that price, but I was happy to buy in at 677p. De La Rue is now just over 4% of my portfolio.
In other news I see that my views on Connaught (that there was an 80% chance of them being worth nothing) seem to have come true. Today's announcement has put paid to any lingering hope that they might trade their way out of trouble.
1 comment:
What do you make of the bid approach from Oberthur?
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