Banknote firm De La Rue tumbles after finance chief departs
Shares nosedived as investors digested the news.
Shares in banknote maker De La Rue tanked on Tuesday after the firm warned over profits and announced the departure of its finance chief.
The Basingstoke-based group, which also specialises in passport printing, said in an unscheduled stock market announcement that it is expecting full-year results to come in at the “lower end of the current consensus range”.
De La Rue did not give a reason for the lower guidance. Consensus estimates for operating profit currently sit in the range of £71 million to £73 million.
Shares nosedived over 11% to 538p as investors digested the news.
In addition, De La Rue’s chief financial officer Jitesh Sodha is stepping down from the firm with immediate effect in order to “pursue his career outside of the company”.
Mr Sodha will remain in the business until the end of September in order to ensure an orderly transition while a suitable successor is identified, the group added.
Chief executive Martin Sutherland said: “Jitesh has been a valued member of De La Rue’s management team. He has been instrumental in the execution of our strategic plan to diversify our business.
“I would like to thank Jitesh for his support and contributions during his tenure and wish him every success in the future.”
De La Rue was the firm behind both the new polymer £5 and £10 notes and last year reported a 6% rise in annual pre-tax profits to £58.2 million on revenue of £461.7 million.
The company, which has produced banknotes since 1860, has also received a fillip from the fall in sterling since the Brexit vote, as it makes more than 80% of its revenues outside the UK.
In a research note, JP Morgan Cazenove said: “There is nothing to be read into Mr Sodha’s departure about the state of the business or its prospects; it is the result of personal motives.
“We have lowered our estimate from the top of the range to the bottom.
“We understand trading continues to track broadly in line with expectations but the timing of the update ahead of the year-end causes De La Rue to adopt a prudent stance.”