De La Rue highlights 'challenging' banknote paper market
Friday, February 1, 2013
De La Rue has highlighting increased competition and pricing pressure in the banknote paper market as it revealed that full year paper volumes are expected to be down 18% on 2011/12.
In this morning's interim management statement (IMS) for the period from 30 September 2012 to date, De La Rue confirmed that its financial results for 2012/13 are expected to be "similar to those for 2011/12".
However, while banknote volumes for the year are expected to be on a par with the 6.4bn notes produced in 2011/12, banknote paper production looks set to fall some way short of last year's 11,000 tonnes, with De La Rue currently estimating this year's output at around 9,000 tonnes.
The world's largest currency printer highlighted the "challenging" market conditions for banknote paper and said that while some of the delayed orders referred to in its November IMS had been received, others were still to be confirmed.
De La Rue cited additional capacity from other manufacturers and "continued evidence of pricing pressure" as reasons for the tougher market.
Meanwhile, the Solutions division was said to be trading "satisfactorily" and the group's improvement plan was said to be on track to deliver the target savings, with the board confident of achieving its aimed-for £100m-plus operating profit in 2013/14 as a result.Tweet