The company that’s reprinting Britain’s banknotes following the accession of King Charles III saw its shares tumble 25% after it issued a profit warning.
De La Rue Plc slumped after it said full-year adjusted operating profit would miss market expectations, days before a shareholder vote on the future of the money printer’s chairman that comes amid a battle with an activist shareholder.
The firm is suffering from a surge in input costs such as energy, while its market has been subdued as customers use stocks built up during the pandemic, it said in a statement.
“Our supply chain is showing inflationary trends and we are struggling to pass these additional costs onto customers,” Chief Executive Clive Vacher said in an interview. “There are times where there is excess
capacity and times where capacity is constrained.”
De La Rue said that full-year adjusted operating profit will be between £30 million and £33 million versus analyst consensus of £36 million.
Chairman Kevin Loosemore’s position will be put to a shareholder vote on Dec. 2 after Crystal Amber Fund Ltd, which owns a 9.8% stake in the firm, called for his removal. The activist shareholder says De La Rue hasn’t laid out a plan for growth and should participate in “consolidation.”
Vacher said in the interview that an independent review concluded the current group structure is most appropriate.
Separately, he said that the firm is already seeing signs of increased cash demand in some countries due to inflation, but cautioned that “it’s too early to see whether it is a trend.”