De La Rue slashes forecast as banknote demand tumbles

De La Rue has slashed its full-year forecasts and begun talks with lenders as demand for fresh banknotes falls to a 20-year low while rising interest rates increase its debt servicing costs.

The currency and passport maker, which is due to report earnings on May 31 for the year ending March 2023, warned of “significant uncertainty” and low order volumes for the coming year.

De La Rue’s board said it expected full-year adjusted operating profit for 2024 to be “in the low £20mn range” compared with earlier unadjusted estimates of £40.1mn. It is in discussions with lenders to seek “an amendment to its banking covenants”.

The UK group has asked trustees of its defined benefit pension scheme for a deferral of its next deficit repair contribution, totalling £18.75mn.

The downgrade prompted the shares to tumble nearly 30 per cent in early Wednesday trading in London, depressing their decline over the past 12 months to more than 67 per cent.