Shares dropped over 10 per cent for De La Rue this afternoon, after the currency maker warned against rising costs and supply shortages.
The company warned 2023 profits would be hit, stating it saw “substantial degree of uncertainty in the outlook”.
“The board now expects that adjusted operating profit for full year 2023 will be broadly flat versus full year 2022, and weighted towards the second half”, the Basingstoke based firm said.
The rising cost of raw materials such as the chemicals and polymer has battered the supply chains, which are only worsened by freight cost hikes.
While chief executive Clive Vacher said the company was “working hard to bat away” the problems, the company missed analyst expectations.
The 201-year-old firm reported an adjusted operating profit of £36.4m for the full year, down from £38.1m the previous year. Revenue also dipped to £375.1m, from £397.4m.
Commenting on the results, AJ Bell Investment Director Russ Mould said: “De La Rue’s shares have had a great run under CEO Clive Vacher and investors will be hoping that the firm is not returning to type with its latest profit warning and admission that even the forecast of flat operating earnings is reliant upon a pick-up in the second half.”
“The market had swelled something – the shares had already all but halved over the past year. DLAR won’t be the last firm to be tripped up by rising input costs this year but given its patchy track record investors may be less forgiving than they would be with other companies.
“It now remains to be seen whether the share price slides tempts anyone to revive talk of a takeover bid, a tale that never seems to go stale”
Shares are down over 37 per cent in the year to date.