The board said it planned to simplify the group's structure in order to concentrate on its two main businesses: security paper and print, and cash systems.

It has announced a raft of changes in cash systems including 350 redundancies. It will also sell or reposition its Sequoia Voting Systems business and pledged to eliminate its losses by the year end.

The changes will involve exceptional costs of almost 25m in the second half.

The security paper and print division has already undergone a significant amount of restructuring, and De La Rue said there was "further potential to develop this business".

Sales in the six months to 25 September rose 9.7% to  318.3m, while pre-tax profits prior to exceptionals jumped 30% to 25.8m,  boosted by a 51% increase in banknote volumes thanks to the Iraq contract.

"Given the strong first half and good visibility in our principal markets, the board remains confident of the full year outlook," said De La Rue chairman Nicholas Brookes.  "Generating efficiencies and overhead savings will also be a major objective to improve our year-on-year performance."

De La Rue shares moved up slightly on the news, by 6.4p to 349.4p.