(Reuters) -Banknote printer De La Rue (LON:DLAR) Plc warned on Wednesday that annual profit would miss market estimates and reported a plunge in half-year results due to subdued currency markets as governments used up the vast stocks built up during COVID-19.
Shares in the London-listed company plunged 23% to 77 pence at 0830 GMT.
De La Rue said adjusted operating profit is expected to come in between 30 million pounds and 33 million pounds ($35.7 million to $39.3 million) in the year ending March 2023.
That is below the company-provided analysts' expectations of 36 million pounds.
"Due to the unpredictability of the external environment, particularly when it comes to timing of customer orders, the potential range of outcomes for adjusted operating profit this year is larger than normal," the company said.
"There are some encouraging signs that central banks are going to need the currency (notes) again. In the relatively short term, however, it is quite unpredictable exactly when we will see volumes recover," Chief Executive Officer Clive Vacher told Reuters.
De La Rue has been turning around its business, including by investing in polymer notes and cutting costs. The company holds the contract to design and make the Bank of England's new polymer notes.
Britain will gradually issue coins, banknotes and stamps bearing the image of King Charles and the makers of its currency and stamps have said they would begin the slow process of switching from using an image of the late Queen Elizabeth. The new currency is expected to enter circulation by mid-2024.
De La Rue reported a near 47% drop in adjusted operating profit to 9.3 million pounds for the six months ended September.
The company also outlined its plan for the next three years which entails "solid returns" on investments with continued growth in its authentication business. ($1 = 0.8405 pounds)