De La Rue issues profit warning after 'challenging' first half

23rd Oct 2013 07:25

Banknote printer and ID solutions firm De La Rue said it will miss its profit guidance this financial year due to 'challenging trading conditions' which resulted in a small dip in revenues in the first half.The company said that operating profits for the 12 months ending March 30th 2014 will be around £90m, a 40% increase year-on-year but below its three-year target to raise the bottom line to £100m from £40m in 2010/11.Operating profits in the six months to September 28th increased by 18% year-on-year to £39m as ongoing cost reductions helped it offset the impact of marginally lower revenues.In the Currency division, banknote print volumes fell 10% to 2.6bn notes, while banknote paper volumes were up 4% at 4,700 tonnes. However, as a result of the continuing overcapacity in the banknote paper market, the firm has seen a worsening pricing environment with recent confirmed orders. "The board is pleased with the level of order intake in the Currency division but anticipates that the pricing environment in the second half of 2013/14 will continue throughout 2014/15."Over at its Solutions unit, Identity Systems performed strongly during the period but Cash Processing Solutions continued to struggle and is expected to make a loss in the first half and the full year as a whole. De La Rue hopes this business will break-even the following financial year.BC