Banknote maker De La Rue warns on profits again
Shares have now fallen 65% this year after a second profit warning spooked investors.
Passport and banknote maker De La Rue continued its freefall on Wednesday as bosses issued a second profit warning in five months.
The company, which suffered heavily from losing out on the Government’s contract to make new blue UK passports, said profits will be “significantly lower than market expectations”.
Investors took flight, with shares plunging 20% in early trading, down 36p to 151p. The share price has now sunk nearly 65% since the start of the year.
New chief executive, turnaround specialist Clive Vacher, said he is “conducting a detailed review of the business and will update the market further”.
He replaced Martin Sutherland, who quit in May following a previous profit warning.
De La Rue said it expects adjusted operating profits for the six months to the end of September “to be low-to-mid single-digit millions.”
Mr Vacher’s turnaround will also have to contend with a Serious Fraud Office investigation into alleged corruption at its South Sudan business.
There is also an £18 million black hole in the accounts after the company revealed in May that the Venezuelan central bank has been struggling to pay its bills.
De La Rue manufactures about a third of the world’s banknotes and employs more than 2,500 people.
But last year it lost the contract to print British passports to a French company and led to activist investors calling for a major overhaul of the business.
The pressure resulted in non-executive resignations, including chairman Philip Rogerson, who stood down to be replaced by Kevin Loosemore.