Passport and banknote-maker De La Rue says it is progressing with a plan to turn around the business, after warning it expects to see a large drop in profit.
The firm, which has a manufacturing plant in Gateshead as well as bases in Basingstoke, Debden and Bathford, said it expects to see the fall following struggles in its currency arm.
The company predicted that adjusted operating profit for the 12 months ending March 27 would be between £20m and £25m, in line with earlier guidance.
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The figure marks a major drop on the previous year, when adjusted operating profit reached more than £60m, and comes largely because business is drying up in its currency division during the first half of the financial year.
De La Rue said last month that trading has been “satisfactory” in more recent months.
The firm’s 2,500 employees make the Bank of England’s new plastic notes, along with around a third of the world’s banknotes.
It marks the end of a tough year for the passport-maker, forcing it to embark on a turnaround plan which it announced last month to cut costs and improve efficiencies.
De La Rue’s new boss Clive Vacher announced plans to cut costs by around £35m over three years as part of the plan.
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The plan was devised following three months of data-driven work by the extended leadership team and covers three years from the 2020/2021 financial year to 2022/2023.
Its plans for the currency division to return to growth in its margins was driven by cost reductions, and investment in polymer and related features where it could see attractive market growth opportunities.
The previous target had been to cut £20m from the company’s expenditure.
In the update to shareholders for the year ended March 27, the business said net debt at the end of the financial year is expected to be £105m, a reduction of more than £65m from six months ago.
It said: “The group is progressing well with its turnaround plan announced on 25 February.
“The company is monitoring developments related to Covid-19, and actively taking steps to protect its employees in line with guidance from governments. At present, it is too early to quantify the potential impact on the 2020-2021 financial year.”