In a trading statement issued this morning (24 January), the security printer said that pandemic-related issues had “become more pronounced” since the half-year. 

“The Omicron and Delta variants have caused substantially increased employee absences in our manufacturing facilities globally, which will result in lower total operational output for the full year.” The group stated.

“More recently, the Group has also been affected by supply chain shortages in chips and other process raw materials and has experienced a degree of supply chain cost inflation.”

De La Rue said that, as a result, adjusted operating profit was likely to be in the range of £36m-£40m, similar to the prior year. Market expectations had been £45m-£47m.

However, De La Rue said the revised outlook “still demonstrates substantial year-on-year growth in our two core businesses”.

Following the announcement the group’s share price fell from 150p to 104p, a new 52-week low. It subsequently recovered slightly and was down 22.8% at 115.77p at the time of writing. (52-week high: 214.94p.)

De La Rue announced its radical three-year Turnaround Plan in February 2020, now says that the results will be delayed by approximately 12 months because of the global impacts, which it also flagged as “incremental headwinds into financial year 2022-23, with the effect of slowing the company's adjusted operating profit growth profile”.  

CEO Clive Vacher commented: “Despite the macro challenges that are delaying aspects of the Turnaround Plan, De La Rue continues to increase adjusted operating profit in both divisions year on year, and the Plan anticipates this to continue going forward.  

“While this trading update is disappointing, it should be seen as a delay to reaching our Turnaround Plan objectives, rather than indicating that a change of direction is required.”

He said the group’s leadership has worked hard to mitigate many of the external effects, and cost reduction activities implemented since early 2020 were “having a significant impact in supporting our underlying performance while we navigate these external factors”. 

“The markets in which we operate, and our position in them, remain strong, and we continue to execute substantial investment for the future."