UK’s De La Rue warns FY profit below expectations on dwindling cash demand
Struggling British banknote printer De La Rue warned its fiscal 2023
profit was set to miss market expectations and next year’s outlook was
uncertain, as demand for cash hit its lowest in over two decades.
This sent its shares to a record low.
The company said it was talking to lenders about amending its banking
terms due to the worsening outlook, while it has requested its pension
trustee to defer its next deficit contribution.
The over 200-year-old company works with governments, central banks and commercial organisations in more than 140 countries.
It had signalled in November significant doubts about its ability to continue as a going concern.
De La Rue shares, which have lost more than half of their value so
far this year, fell more than 30% to 33 pence this morning to a record
The company said it expected adjusted operating profit for the year
ended on March 25 to undershoot market expectations by a mid-single
It expected adjusted operating profit to be in the low £20m range for its fiscal 2024.
The banknote printer said the downturn in demand for currency was also causing significant uncertainty in its outlook for 2024.
The warning come at a time when the company is under pressure from
its third-largest shareholder, Crystal Amber Fund, to remove the
chairman and shake-up at the struggling banknote printer to revive its
performance and share price.
On the positive side, revenue at its authentication business, which
designs and makes secure documents as well as security features such as
holograms to authenticate goods, is expected to exceed £100m for the
first time in 2024,.
It said this is partly thanks to its Australian passport contract.