De La Rue Impacted by Low Banknote Demand

De La Rue has recently provided a trading update, which indicates both a small (mid-single digit percentage) drop in profitability below market expectations (of £30-33 million) for 2022/23 but an uncertain outlook for 2023/24, with a potentially sharp reduction in profits. The share price fell 20% on the news.

According to the company, the downturn in demand for banknotes, impacting both De La Rue and the wider industry is causing a significant degree of uncertainty in terms of the outlook for the current financial year, to March 2024. Demand has been at its lowest levels for over 20 years, resulting in a low order book going into the current year, albeit that there are encouraging signs that the market is recovering, with a significant number of new tenders actively underway.