CURRENCY printer De La Rue stepped up its cost-cutting drive yesterday after increasing competition and order delays pushed its full-year revenue down eight per cent in the tough banknote market.
The firm said that it would now aim to make annual savings of £40m under its improvement plan in the 2013-14 year, £10m higher than its original target. Underlying pre-tax profit rose two per cent to £59m for the 2012-13 year, in line with analyst forecasts, but excluding a £7.6m charge mostly related to the cost of implementing the improvement plan.
The eight per cent fall in revenue to £484m was primarily down to lower volumes in its currency division which accounts for more than 60 per cent of De La Rue’s revenue.
The 12 month order book in the division was down 14 per cent to £158m, though the firm said that it saw a strong pipeline of new opportunities, which it expected to convert to orders for delivery in 2013-14.
“We enter the new financial year with increased cost savings identified and a strong pipeline of order opportunities, more than 10 per cent higher than at the same time last year,” chief executive Tim Cobbold said.
The firm said in February that it was seeing fierce competition in the banknote market after some rivals added new capacity. That was after it issued a profit warning in November on delays in some of its currency contracts. It said yesterday some of these orders have now been received.
Its flagship contract with the Bank of England is up for renewal this year with an announcement expected by the end of the year.