Bank note printer De La Rue slumps as it warns on annual profit
Nov 23, 2009 (Reuters) – De La Rue Plc (DLAR.L), a banknote printer, warned Wednesday that its annual profit would not meet market expectations. They reported a drop in half-year results due subdued currency markets and governments using up large stocks from COVID-19.
London-listed shares plunged 23%, to 77 pence by 0830 GMT
De La Rue stated that the adjusted operating profit will be between 30 million and 33 million pounds (between $35.7 million and $39.3 million) for the year ending March 2023.
This is lower than the analyst expectations of 36 millions pounds.
The company stated that “Due to unpredictability in the external environment, especially when it comes timing of customer orders,” the possible outcomes for adjusted operating profits this year are larger than usual.
“There are some encouraging indicators that central banks will need the currency (notes again) again. Clive Vacher, Chief Executive Officer, said that volumes will recover in the short-term, but it is not certain when.
De La Rue is transforming its business by investing in polymer notes, cutting costs and turning around the company. The Bank of England has awarded the contract to De La Rue for the design and production of the new polymer notes.
Britain will issue gradually coins, banknotes, and stamps bearing the image King Charles. The makers of its currency stamps have indicated that they will begin the slow transition from the Queen Elizabeth image. It is expected that the new currency will enter circulation in mid-2024.
De La Rue reported a nearly 47% decrease in its adjusted operating profit to 9.3million pounds during the six-months ended September.
The company also presented its plans for the next three year, which included “solid returns” on investment and continued growth in its authentication business.
($1 = 0.8405 pounds)
Reporting by Amna Karaimi and Yadarisa Shahong in Bengaluru; Editing done by Savio Da’Souza & Emelia Sithole–Matarise
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