A licence to print money fails to rescue De La Rue

The banknote printer De La Rue has said that the weak euro had handed its European competitors a price advantage as it revealed sharply lower annual profits.

Its shares dropped by 9 per cent as De La Rue revealed that pre-tax profits nose-dived by 35 per cent to £38.9m in the year to March on revenues down from £513m to £472m. It is cutting its dividend by 41 per cent to 16.7p.

Martin Sutherland, De La Rue’s chief executive, said profits were being hurt in the short-term as competitors benefited from the weak euro.

“These results are in line with our revised expectations and include the benefit of further operational efficiencies,” he said. “However, these have been outweighed by the impact of the challenging market conditions.”

Jobs cuts at its Overton and Gateshead plants have helped make £7m savings.

While pricing pressures hit its banknote printing business, which prints 150 national currencies, returns at its microchip and passport processing systems unit were “lower than expected”.

Mr Sutherland, who was presiding over his first full-year of results, faces a stiff challenge in turning around the business, which has issued three profits warnings in the past two years.

Mr Sutherland, who previously ran BAE’s cyber business, said: “I have completed a review of the business and formulated a clear strategic plan to deliver growth and improve profitability in the long term.”

De La Rue has won a 10-year contract with the Bank of England to print sterling at the Bank’s printing plant at Debden in Essex.

This includes next year’s new notes featuring Winston Churchill and Jane Austen.

Its shares fell by 49.5p to 504p.