De La Rue hit by supply disruption inside its forex enterprise

Banknote printer De La Rue reported lower first-half sales after its currency business was affected by the timing of deliveries.

The Hampshire-based group, whose customers include the Bank of England, said its turnover fell by 10.2 per cent to £145.1million in the six months ending 28 September.

Revenue rose by 4.4 per cent to £50.2million in its authentication arm, which De La Rue has agreed to sell to industrial technology company Crane NXT for £300million.

However, its currency division saw sales slump by 16.3 per cent to £194.9million as some deliveries shifted into the second half of the financial year.

Adjusted operating profits nonetheless surpassed expectations, declining by 7.6 per cent to £7.3million, while lower exceptional charges helped its pre-tax losses more than halve to £6.5million.

Since then, De La Rue’s currency business has expanded its order book to a five-year high of £338million thanks to multiple contract wins, including some polymer-based banknote deals.

Weaker performance: Banknote printer De La Rue has reported lower first-half sales

As a result, the company has reiterated its guidance for adjusted operating profits to hit the ‘mid-to-high £20millions’ this financial year.

Clive Vacher, chief executive of De La Rue, said: ‘The material new orders that we have won in recent months will begin to convert into increased revenue as we move into the next financial year and solidly underpin our growth expectations.

‘With these firm foundations, our ongoing currency business is now well positioned to take full advantage of an improving market, with a substantial upward step change in activity in 2025 and beyond.’

De Le Rue intends to become a solely banknote design and printing operation once it formalises the sale of its authentication business, which it expects to happen during the first half of 2025.

The group intends to use money from the disposal to repay a major loan and reduce its pension scheme liabilities.

Last year, De La Rue was allowed to defer paying about £20million in pension deficit contributions after warning that the lower global demand for banknotes was causing serious uncertainty.

Founded slightly over 200 years ago, the company prints banknotes for over half the world’s central banks, such as the Bank of England.

Dan Coatsworth, investment analyst at AJ Bell, said: ‘There is significant pressure on the current management team to demonstrate the business still has life in it despite the structural headwinds it faces.

‘The authentication sale will at least provide the business with a useful injection of cash and give it some breathing space.’

De La Rue shares fell 5 per cent to 104p on Thursday morning, although they have still risen by around 42 per cent over the past year.