De La Rue plc (LON: DLAR) have issued a warning to shareholders about its profit levels in a press statement released this morning.
Following the announcement, the share price of De La Rue has crashed significantly as the former UK passport printer speculates about tough Brexit market conditions.
Today the company issued a statement saying the following “De La Rue expects H1 2019/20 adjusted operating profits for the half year ended 28th September 2019 to be low-to-mid single digit millions. Full year 2019/20 adjusted operating profit will be significantly lower than market expectations”
This was also added “Management, led by the new CEO, is conducting a detailed review of the business and will update the market further when it reports its H1 2019/20 results on 26 November 2019.”
Additionally, De La Rue has specialized in printing bank notes giving it national recognition.
De La Rue are not the only firm that have speculated about tough market conditions, and will look to recover in the same fashion as the London Stock Exchange (LON : LSE) in its third quarter.
The banknote printer had already warned in May that operating profit for the 2020 financial year would be “somewhat lower” than 2019.
The firm also revealed a 78% sink in profits, before tax to £25.5m in its full-year results in May, down from £113.6m a year earlier.
Following this collapse, the sudden resignation of Chief Executive Martin Sutherland allowed Vacher to take the reigns earlier this month.
Additionally, problems were added when the Serious Fraud Office opened an investigation into the company over summer to probe suspected corruption in South Sudan.
De La Rue have experienced a tough 2019, after losing a British Passport Contract to French rival which lowered revenues.
AJ Bell investment director Russ Mould warned that De La Rue has failed “a major test” for its shareholders.
As a banknote printer in a world going cashless, “if it didn’t exist as a business today, would you really set it up?” he asked.
This poses a lot of questions for shareholders of De La Rue, as British firms such as Dunelm (LON: DNLM) and MoneySupermarket (LON: MONY) continue to be hit by ongoing Brexit complications.
Currently. shares of De La Rue are trading at 149.8p per share, falling 19.89% this morning. 30/10/19 10:13BST.
