We Expect Modest Growth to Continue at De La Rue

De La Rue has a business model that allows it to literally print money

Brett Horn 19 April, 2010 | 3:54PM

Fair Value Estimate: 910p ¦ Economic Moat: Wide

Thesis
(Last updated 29/03/10)

De La Rue is a leading player in an industry where an established reputation is the key to success. The company's business centres on the design, printing, and handling of currency and other security documents. Many small and some large countries outsource all or some portion of these processes. The products De La Rue deals with are highly sensitive, and having an established record is crucial, as the risk governments would face in dealing with unproven vendors is too great. As a result, the industry is characterised by a few large global firms and other smaller firms that concentrate on specific countries. We think top players like De La Rue benefit from a wide economic moat.

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About Author

Brett Horn  Brett Horn is an associate director in the equity research department.

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