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Delays hit De La Rue
BANKNOTE printer De La Rue warned its annual profit would be lower than expected after a number of key orders expected in the second half of this year were pushed back.
The firm, which operates from a site in Gateshead, prints about 150 currencies as well as passports. It reported lower than expected orders in its first quarter update in July but work in the second half of the year was expected to hike profits for the full-year.
"It will now be too late for these orders to benefit the current financial year, and as a result the board expects that the financial results of the group for 2012/13 will be similar to those for 2011/12," the firm said in a statement on Tuesday.
The news is the latest setback for the company, which has faced problems over the past few years, including a production crisis at its Hampshire paper mill in 2009/10.
De La Rue said it was confident the delayed orders would be received in its next financial year, adding to a number of important orders already secured. Its order book for the next 12 months was flat at £248m.
The group said banknote print volumes had risen 4 per cent to 2.9 billion notes, but banknote paper volumes had fallen 15 per cent to 4,500 tonnes as a result of increased competition.
Half year group operating profits came in as expected, up 5 per cent on the same period the previous year at around £33m, on sales of £245m, which were 3 per cent higher than those generated in the same period in 2011.
"We have continued to make good progress with the Improvement Plan and this together with lower cotton prices has offset the effects of the paper volume movement and an adverse currency 'mix' compared with the corresponding period," the group said.
"The board remains confident that the delayed orders will be received for shipment in 2013/14 and in delivering the Improvement Plan, which has a target 2013/14 operating profit of in excess of £100m."