LONDON, Oct 23 (Reuters) - Currency printer De La Rue said on Wednesday it would miss its profit target for this year after increasing competition in its core banknote printing business hit the prices it could charge.
The British firm said it would make around 90 million pounds ($145.9 million) in operating profit in 2013/14, lower than the 100 million pound target it set in its three year improvement plan introduced in 2010/11.
That sent shares in the group down 6.6 percent, making it the top faller on the FTSE mid-cap list and wiping 64 million pounds off its market value to 909 million pounds.
De La Rue has been warning of pricing pressure since May last year, when it said competitors had been adding capacity to manufacture banknote paper. It now says that has also fed through to printed banknotes division.
Banknote print volumes in the first half were down 10 percent while banknote paper volumes increased by 4 percent notwithstanding the challenging market.
The firm, which makes over 150 national currencies as well as UK passports, said that, despite the competitive pressure, it was happy with the level of orders overall in its currency division.
A step up in its cost-cutting drive in May began to bear fruit in the first half, with operating profit estimated to be 18 percent higher than the same period last year on marginally lower revenue.
It added that its cash processing business, which makes cash sorting equipment and software, would report an operating loss for the full year after a decline in trading.
De La Rue is currently rebidding on its flagship contract, which it has held since 2003, to supply British banknotes for the Bank of England.
The Group’s 12 month order book at end-September was 232 million pounds up 25 million since the start of the year.