A licence to print money, but De La Rue still can't make any

De La Rue might have a licence to print money – but it is having a hard time making it and last night the crisis-wracked banknote printer's shares plumbed fresh depths amid fears of that one of its biggest customers is preparing to cash in its chips.

The revelation came as the company, bruised by production problems at its Overton plant, published the latest in a series of grim updates. Its executive chairman Nicholas Brookes declined to identify the customer but reports have suggested it could be the Reserve Bank of India, the country's central bank.

De La Rue, which prints currency, supplies banknote paper to governments around the world and worked on the new Iraqi bank notes, said it had "not heard" whether it will "continue or not continue supplying this customer," said to be one of its company's biggest.

The company's woes date back to the summer, when it said quality and production irregularities would hit sales. Weeks later, its chief executive James Hussey resigned and, in September, the company revealed that some employees had "deliberately falsified certain paper specification test certificates for a limited number of customers". As might be expected, banknote paper must meet certain detailed standards. but De La Rue said its probe had shown that in certain cases "a small number" of parameters had "fallen marginally short of specification". The company put on a brave face, telling investors that it had fixed the issues and was confident that "neither the physical security nor the security features in the paper have been compromised".

The errors have hit half yearly pre-tax profits by £35m – in line with a warning in September – and depressed banknote paper output by nearly 29 per cent. Banknote print volumes were down nearly 30 per cent over the same period.

De La Rue also confirmed that an internal investigation conducted with the City law firm Herbert Smith had concluded and that "it will continue its dialogue and co-operation with the appropriate authorities", including the Serious Fraud Office. On the management front, its finance director, Colin Child, continues to act as chief operating officer. Mr Child will continue in that role, and Mr Brookes will remain as executive chairman, until De La Rue appoints a new chief executive officer.

Looking ahead, the company said its outlook remains clouded as "customer discussions are yet to be concluded", adding: "Pending this, the financial impact on the group for the full year and subsequent years remains unclear."

The disclosures sent De La Rue shares down 11 per cent to 557.5p. The stock has fallen by around 40 per cent since the beginning of July.

JP Morgan Cazenove analysts said that while yesterday's results offered some answers, "material uncertainty remains". "The statement addresses some of the many unanswered questions, but the most important aspect remains unclear – whether the group will suffer the loss of a material contract," they explained.

Start your day with The Independent, sign up for daily news emails
News
newsAnother week, another dress controversy on the internet
Life and Style
Scientist have developed a test which predicts whether you'll live for another ten years
health
Life and Style
Marie had fake ID, in the name of Johanna Koch, after she evaded capture by the Nazis in wartime Berlin
historyOne woman's secret life as a Jew in wartime Berlin
News
news... and what your reaction to the creatures above says about you
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn