It attributed the fall to eurozone customers of its Cash Systems division holding back from reordering ATMs until the second half, after the euro changeover.
And despite a strong banknote order book in its security paper and print division, revenues there will drop due to unusually high numbers of new designs, which take longer to prepare. De La Rue has also failed to replace last year’s exceptional demand for euro banknotes.
Analysts then downgraded their profit forecasts by about 10%, causing De La Rue’s share price to dive 158.5p to 287.5p. As PrintWeek went to press it had slipped a further 16.5p to 271p, less than half the value of its 566p 52-week high.
Chairman Sir Brandon Gough said the group expected catch-up orders, resulting in full-year operating profits from continuing operations being only "marginally down" on last year.
But Merrill Lynch analyst Paul Steegers was sceptical: "It has said its first half is worse year-on-year, which implies that it must grow operating profit by 20% in the second half – a tall order."
He also said that further downgrades of 15-25% could not be ruled out. And chief executive Ian Much’s (pictured) strategic review of the group’s "under-performing" Security Products division could "result in closing down factories and possibly redundancies, which would incur high costs," added Steegers.
Story by Rachel Barnes
