De La Rue slumps as it warns on profit, CFO resigns

Shares in banknote manufacturer De La Rue slumped on Tuesday as it announced the departure of its chief financial officer, Jitesh Sodha, and warned that results for the year will be around the lower end of the current consensus range.

Sodha, who plans to step down to pursue his career outside of the company, will resign as a director with immediate effect but stay on with the business until the end of September to ensure an orderly succession while a suitable successor is identified.

Chief executive Martin Sunderland said: "Jitesh has been a valued member of De La Rue's management team. He has been instrumental in the execution of our strategic plan to diversify our business. I would like to thank Jitesh for his support and contributions during his tenure and wish him every success in the future."

Casually slotted in to the RNS entitled "Directorate Change" was a warning that full-year results for the company - which is due to update the market on the outturn for the year in the third week of April - would come in at the lower end of consensus forecasts. The market consensus for underlying operating profit for the financial year ending 31 March 2018 is between £71m and £73.4m.

Mike van Dulken, head of research at Accendo Markets, said that while the timing of the warning is interesting, just weeks ahead of the April update and May's full-year results, what's more intriguing is the lack of detail.

He pointed out that the shares had been weak since 8 March, down 8% from their 650p ceiling of the last few months. However, they had also been holding above 590p for the last year.

"So today’s breakdown to flirt with post-referendum lows understandably has investors wondering what’s up with H2, anything meaningful on contracts/operations surely having to be reported."

At 1005 GMT, the shares were down 14% to 520p.