De La Rue shares slump on latest profit warning
Wednesday, October 30, 2019
De La Rue has issued a second profit warning in five months, sending its shares plummeting, and said its full year 2019/20 adjusted operating profit “will be significantly lower than market expectations”.
In a trading update published today (30 October), covering its H1 2019/20 period from 1 April to 28 September 2019, the Basingstoke-headquartered security printer said it expects its adjusted operating profits for the period to be in the “low-to-mid single-digit millions”.
The firm’s share price accordingly slumped by more than 20% to 145.67p as markets opened this morning. It has fallen by around 80% since the start of 2018, following a string of setbacks including the loss of the flagship UK passport contract.
It was also forced to make an £18.1m provision for a bad debt relating to a Venezuelan customer that is currently unable to pay its bill while in July the SFO launched a probe into its activities in South Sudan.
Clive Vacher, a business transformation specialist, was appointed as De La Rue’s new chief executive earlier this month following the completion of a handover by Martin Sutherland. This followed the appointment of Kevin Loosemore as the company’s new chairman on 1 October.
“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,” the company said in today’s statement.