Trading for the period since 25 September was in line with management expectations for the second half of the financial year, with the currency division on target to produce 6bn printed banknotes and 10,000 tonnes of banknote paper in the current financial year.

Following the paper production problems experienced at the firm's Overton mill last year, De La Rue's discussion with the principal customer, which chief executive Tim Cobbold confirmed to Dow Jones Newswires as RBI, remain ongoing, leaving the question of whether the printer will retain the contract unanswered.

However, De La Rue pointed out that, to date, it has seen no evidence of an adverse impact from the paper production problems on the rest of the business. It added that it has historically outsourced a proportion of its paper requirements, the majority of which could be produced in-house.

De La Rue said that the performance of its Cash Processing Solutions division had been consistent with the first half of 2010/11, while its Security Products Division continued to be affected by lower internal component sales by the Holographics business as a result of reduced banknote print and paper volumes.

The company's Identity Systems Division is increasing volumes following the launch of the new UK passport in October and expects to be at full production levels before the financial year end.

Cobbold said: "My first month at De La Rue has confirmed the potential to build on the considerable strengths of the business by extending our customer base and improving both how we work and the service we deliver to our customers around the world.  My immediate focus is to develop and begin to execute the detailed plans that will underpin the value strategy shareholders rightly look to the Board to now deliver. I shall provide a full update at the announcement of our preliminary results at the end of May."