A bounce back in demand for cash helped banknote and passport printer De La Rue voice confidence in its own future today, as it tries to move on from a string of profit warnings.
The 200-year old company makes around a third of all of the banknotes in the world. Its exposed to the rise in popularity of digital payments put the survival of the firm in doubt this year, and set up drama in the boardroom after a string of profit warnings.
Clive Vacher, De La Rue’s CEO, said today: “There is now no ‘material uncertainty’ with respect to De La Rue’s continuation as a going concern,” adding: “We have witnessed encouraging signs of recovery with strong bid activity, a positive win rate, and the significant majority of FY24 banknote print volume already contracted.”
In April, its chairman, Kevin Loosemore, resigned after a long campaign to oust the City veteran was led by its shareholder Crystal Amber Fund, an activist investor.
His departure came after De La Rue said in April that demand for banknotes crashed to its lowest in 20 years as it tore up is profit guidance for the year. It came after central banks delayed orders for stocks of cash, having increased them during the pandemic, leaving them with more supplies to work through.
Today, it repeated its profit guidance for next year, as revenue for 2023 fell to £350 million from £375 million. Its annual loss was £29.6 million from profit of £24.2 million a year ago, after one-off charges of almost £50 million relating to redundancies, relocation costs and other restructuring efforts. The numbers were in line with lowered forecasts issued in April, at the time of its latest profit warning.
De La Rue’s new chairman, Clive Whiley, who has been in the job since mid May, added: “It is my conviction that the fundamentals of De La Rue’s business remain sound.”
The company now offers “authentication services” for digital payments, as part of its strategy to ease its reliance on demand for traditional cash. It said that this part of its business, which uses payment tracing technology for government and business, was on track to generate £100 million in revenue in 2024.
Its shares added 4p to 40p.
