De La Rue lifts profit expectations as currency demand recovers

British banknote maker De La Rue has bumped up its profit expectations for the first half of the year after it reported seeing signs of recovery in its currency business.

The Basingstoke-based firm said it now expects adjusted operating profit to be “marginally ahead of previous guidance” given in June.

Shares in the company, which prints banknotes for the Bank of England and other central banks across the globe, moved higher after the update.

De La Rue posted a pre-tax loss during the year to March having repeatedly issued profit warnings to shareholders.

Earlier this year, it revealed that demand for banknotes had slumped to the weakest level for 20 years.

But it reassured investors that demand for currency was picking up as governments have largely run down the stocks built up during the pandemic.

It also said that inflation was providing a boost with goods and services now costing more worldwide.

The firm, which has a separate authentication division which provides software for governments and businesses, previously said it expects to broadly break-even over the first half of the financial year.

But profits are now likely to come in slightly ahead of that and net debt is expected to be improved, the group said on Friday.

It comes as the business has cut costs over the past few years in efforts to strengthen its finances against weaker market conditions.

Its full year expectations remain unchanged at levels “in the low £20 million range” over 2023 to 2024.

Shares in De La Rue were up by about 4.5% following the update.