De La Rue shares slump after second profit warning: Loss of new blue passports contract and unpaid Venezuela debt to blame
- De La Rue shares plunge 20 per cent after second profit warning in five months
- Profits for six months to September ‘to be low-to-mid single-digit millions’
- Hit by passports contract loss and £18billion unpaid debt by Venezuela
Passport and banknote maker De La Rue has issued a second profit warning in five months.
The company, which suffered heavily from losing out on the Government’s contract to make new blue UK passports, said profits will be ‘significantly lower than market expectations’.
Investors took flight, with shares plunging 20 per cent in early trading, down 36p to 151p. The share price has now sunk nearly 65 per cent since the start of the year.
De La Rue shares nosedive after second profit warning; Loses on UK Government’s passport contracts and £18 billion Venezuelan debt also caused a major shortfall in the company’s margins
There is also an £18million black hole in the accounts after the company revealed in May that the Venezuelan central bank has been struggling to pay its bills.
De La Rue manufactures about a third of the world’s banknotes and employs more than 2,500 people.
But last year it lost the contract to print British passports to a French company and led to activist investors calling for a major overhaul of the business.
The pressure resulted in non-executive resignations, including chairman Philip Rogerson, who stood down to be replaced by Kevin Loosemore.
Newly appointed chief executive and turnaround specialist Clive Vacher, said he is ‘conducting a detailed review of the business and will update the market further’
New £20 De La Rue banknote are less susceptible to wear and tear
He replaced Martin Sutherland, who quit in May after the company issued its first profit warning.
Mr Vacher’s turnaround will also have to contend with a Serious Fraud Office investigation into alleged corruption at its South Sudan business.