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De La Rue PLC on Wednesday said it swung to a pretax loss in a ‘challenging’ half year, largely due to a decline in currency revenue.
The Hampshire-based banknote printing company said its pretax loss in the six months that ended September 24 was £15.9 million, swinging from a profit of £10.9 million a year prior.
Revenue fell by 8.3% to £164.3 million from £179.2 million, led by a 12% currency revenue decline to £116.4 million from £132.7 million due to a subdued market, said De La Rue.
It added its first half adjusted operating profit was £9.3 million, down 47% from £17.4 million a year prior but in line with its July guidance.
De La Rue now expects its financial 2023 adjusted operating profit to be between £30 million and £33 million, which is below the £36 million analyst consensus.
It also predicted to be free-cashflow generating after pension payments from its financial 2024 onwards.
De La Rue said it was nearing the end of its 3-year turnaround plan, claiming it saved the company, significantly increased its resilience. Further efficiency actions are expected to save around £12 million per year by the end of financial year 2024, it added.
‘We have turned a loss-making currency business into one that is profitable and increasingly stable. Our targeted investment programmes are proceeding well, with the second polymer [banknote] line completed and operational within budget, and the near-doubling of our Malta factory proceeding at pace,’ said Chief Executive Officer Clive Vacher.
Shares in De La Rue were down 17% to 82.90 pence in London on Wednesday morning.
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