Investec hails potential BoE contract win for De La Rue

8th Sep 2014 10:07

The news that De La Rue has won 'preferred bidder' status on a Bank of England bank note contract should help reassure investors, according to Investec which repeated its 'buy' recommendation for the stock on Monday.The company has been printing banknotes at the Bank's facility in Debden, Essex since 2003 under a contract that ends next April.De Le Rue said it will cooperate with the central bank over the coming weeks to make sure it conforms to due diligence checks before the new 10-year contract is awarded."The share price has been under severe pressure in recent months given investor concerns over the impact on the financials and sentiment from the potential loss of its highest profile contract," said analyst Thomas Rands from Investec."As such re-securing the contract should alleviate these concerns and we would expect the share price to bounce strongly this morning," he said.Investec maintained a 915p target price for the stock and highlighted the "attractive" dividend yield of 5.75%.The shares were up 3.3% at 767.5p by 10:12.