De La Rue shrugs off paper woes

Banknote printer De La Rue has played down the impact of quality issues on its business in its interim management statement but admitted it was still negotiating with its biggest customer on the matter.

De La Rue, which has been the target of a bid by French firm Oberthur Technologies, expects to print full year currency volumes of six billion banknotes and 10,000 tonnes of banknote paper, it said, in line with its expectations.

The world’s largest maker of security paper said it was still managing the fallout from serious failings at a paper factory that led to profit warnings and a slump in its shares.

“The Board has not, to date, seen evidence of an adverse impact of the recent paper production issues on the rest of the business,” it said in a statement.

It cautioned that discussions with “the principal customer affected by these issues,” thought to be the Reserve Bank of India, “have not yet concluded.”

“While these discussions are ongoing banknote paper supplies for this customer remain suspended,” it said.

The company said the new UK passport had boosted its identity systems division and it expects that business to be at full production levels before the end of the financial year.

But its security products division has been affected by the reduced banknote print run, which has reduced sales of its holographic add-ons.

Its cash processing solutions has traded as forecast, it said. Cash flow also remains in line with forecasts.