De La Rue Warns On Banknote Sales On Quality Issues; Shrs -14%

20th Jul 2010 14:40

By Anita Likus Of DOW JONES NEWSWIRES LONDON (Dow Jones)--De La Rue PLC (DLAR.LN), the world's largest printer of banknotes paper, Tuesday warned that full-year sales will be materially lower than planned after it had to suspend production for some of its banknote paper at its main plant, which failed to meet certain quality specifications. The news sent shares sharply lower. At 1330 GMT, De La Rue shares were down 125 pence, or 14%, to 798 pence. The company, which is involved in the printing of about 150 national currencies and makes a range of security documents such as passports, fiscal stamps and authentication labels, said that "full impact on the current-year financial results and on the group's prospects has yet to be determined." De La Rue said that production irregularities at its Overton, Hampshire, U.K., plant have very recently been brought to the board's attention because they didn't meet specifications in quality. "As a consequence, the production and shipment of this specification paper has been suspended whilst the circumstances are fully investigated. Subject to the outcome of that process and clarification of the company's contractual position it is now expected that paper production and sales in 2010/11 will be materially lower than originally planned," it said in a statement. The quality issues have occurred at De La Rue's largest plant, in Overton, but the company couldn't specify which currency will be impacted. It also has a smaller plant at Bathford. De La Rue said it will make a further statement after assessing the financial and operational implications of these matters. It is due to release an annual general statement Thursday. -By Anita Likus, Dow Jones Newswires; +44 20 7842 9407; [email protected] (END) Dow Jones Newswires July 20, 2010 09:40 ET (13:40 GMT)