De La Rue, the bank note printer, is to shut two factories and cut 200 jobs after ending its output of products including personal cheques.
The company, which prints national currencies for about 150 countries, yesterday said the market for the cheques and for other products such as coin bags was dwindling.
"The demand for personal cheques just is not there any more," Ian Much, chief executive of De La Rue, said.
"They, along with export stamps, vouchers and coin bags are low margin and declining product areas, and there is too much capacity out there."
De La Rue hopes to sell its plant at Peterborough that makes these products. The operations of its Byfleet plant in Surrey, which mainly prints stamps, will be folded in to the operations of a factory in Dunstable and closed.
Unveiling half-year figures, De La Rue said its order to produce Saddam-free dinars for Iraq was already improving its profitability. "The delivery has gone very well so far but the bulk of the order will come through in the second half of the year," Mr Much said.
The order helped maintain profits at £19.7m before tax for the six months to 27 September, above expectations. De La Rue said it had a strong order book. The shares climbed 9.6 per cent to 292p.
Mr Much said De La Rue had struggled from a downturn in spending from banks on machines used to count cash. It has already announced 350 job cuts in this area. It is now scaling back to concentrate on security-marked paper and print products, such as passport books, identity cards, travellers' cheques and bank notes.
Negotiations are beginning with staff representatives and some Byfleet workers may be allowed to relocate to Dunstable. The company said the move would save the business £3m a year.
The company also reiterated that it would have to restart contributions to its pension fund. This has a deficit of around £40m, and plugging the shortfall will cost De La Rue around £7m a year. The company took a £3.7m charge in the interim figures.Reuse content