De La Rue slashes dividend as interim profits slide

Bank note printer De La Rue has posted a 36% drop in first-half profits amid pressure from tougher market competition that is expected to continue to hit margins into the next financial year.

Year-on-year revenue growth for the six month period to September slid 8% to £214.9m, while pre-tax profit fell 36% to £18.1m.

As a result, management have cut the interim dividend payment by 41% to 8.3p per share.

In September, the group announced its third profit warning in two years, as heightened competition impacted heavily on revenues.

In a statement released on Tuesday, the group said: “These difficult market conditions are anticipated to continue into the next financial year and together with certain contractual price reductions on a number of long term contracts, which will come into effect in 2015/16, will impact margins and profitability as previously stated.”

However, a silver lining for the future for De La Rue in the medium term was last month's announcement of the agreement of a 10-year sterling printing deal with the Bank of England.

Newly appointed chief executive, Martin Sutherland, reflected on his first set of results in the position: “I am delighted to have joined De La Rue and I am confident that, notwithstanding the current challenging market conditions, the fundamental strengths of the business and the operational improvements achieved in recent years, position the group well.”

As of 9:30am, the group’s share price climbed 1.26% to 557.6p per share.