De La Rue warns of job cuts as financial challenges continue

Another financial quarter, and another warning from currency and authentication specialist De La Rue that its annual profits may fall below market expectations.

The company – which swung to a loss in the first half of £12.6m ($15m) on revenues down 8 per cent to £164m – has said it expects adjusted operating profit for the year to be in the £30m-£35m range, below analyst consensus estimates of around £36m.

De La Rue is also seeking another £13m in "efficiency actions" that have led to speculation that further job losses could be on the way at the company, which is facing criticism and pressure from major shareholder Crystal Amber.

The company has called a general meeting on December 2 to vote on the role of chairman Kevin Loosemore, after Crystal Amber called for his resignation.

Authentication was the best performing category, with sales up 2.5 per cent to £45.5m despite a 15 per cent slowdown in PC sales which affected a security label agreement with Microsoft, and reduced demand for technology used to protect an unidentified COVID-19 vaccine. Meanwhile, currency including polymer banknotes fell 12.3 per cent to £116.4m.

Shares in De La Rue lost around 21 per cent of their value in trading today after the interim update, down to £79.35 at the time of writing.

Chief executive Clive Vacher, who was brought in two and a half years ago to oversee the turnaround of the company, said that in the interim "we have dealt with significant legacy issues, and created a company that is well positioned to weather the current operating environment."

He outlined a new plan for the next three years "aimed at continuing growth in authentication and solid returns on the investments made in currency."

New authentication managing director Dave Sharratt – who took over from Andrew Clint earlier this year – is putting a greater focus on targeted sales growth and execution to build on contracts such as recently onboarded tobacco-related schemes in Qatar, Bahrain and Oman.