De La Rue in new slide as the worries persist

De La Rue shares took another clobbering today after the banknote printer failed to explain the "paper production" issues that claimed the chief executive's head in August.

Investors were hoping for news from the internal investigation into a matter that has been embarrassing and costly to a somewhat secretive business.

The company, based in Basingstoke, warned in July of "quality and production irregularities" that sent the shares into freefall.

Chief executive James Hussey soon departed.

Today De La Rue reported that revenue in the half year tumbled £41 million to £210 million, while profits almost halved to £28 million.

The results of the internal probe have been sent to the Serious Fraud Office, but no details were given.

The SFO's own investigation continues.
De La Rue said it is in the "closing stages" of appointing a new boss. The shares lost 56p, 9%, to 567p.

Nicholas Brookes, executive chairman, said: "Issues in paper production at one of our facilities have, as previously advised, had a significant impact on the group's performance during the first half. The board took decisive action to eliminate these issues, and we are encouraged by the support of our customers and the level of orders and enquiries in recent weeks."

The company said that the financial impact of the problems were £35m, comprising £12m on trading losses and £23m for exceptional items.

There is speculation that an important customer, rumoured to be the Reserve Bank of India, may not renew its contract.

De La Rue, founded in 1813, prints notes for the Bank of England and 150 other countries.