Banknote printer De La Rue has seen its profits fall by two thirds over the last 12 months after the company made radical changes to its North East manufacturing site.
The listed company, which produces banknotes and passports for countries around the world, took the decision to stop printing banknotes at its Gateshead site, which has been based at the Team Valley for decades.
While the site still remains open, much of its manufacturing has ceased and its workforce has been massively reduced.
The cost-cutting measure - brought in after the business lost a major contract - led to the company taking a substantial hit to its profit and loss account.
According to De La Rue, the changes at Gateshead were one of the main reasons that its operating profit fell from £42.8m in 2020 to just £14.5m for the year ending March 27, 2021.
Explaining the situation in the North East in its accounts, the company said: "We ceased banknote printing operations at Gateshead in December 2020, although the site remains in use for other activities. 海角视频 Passport operations, also in Gateshead, ceased operations during H1 2020/21.
"These actions will not lead to a reduction of the company's worldwide printing capacity. Following a period of transition and the relocation of equipment from Gateshead to other sites, we will retain the same capacity while operating with four currency print factories, down from five."
It added: "IFRS operating profit of £14.5m (FY 2019/20: £42.8m) was substantially lower than adjusted operating profit due to the recognition of significant net exceptional item charges of £22.6m primarily relating to asset impairment and reorganisation charges relating to the cessation of banknote manufacturing at the Gateshead facility."
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De La Rue explained that the £22.6m exceptional items in its accounts included £11.9m of assets impairments and depreciated charges as well as £7.9m of restructuring costs, which it said specifically related to staff in Gateshead.
Along with the company's operating profit, revenue also fell during the year, from £472.1 to £397.4m. Profit after tax dropped from £35.8m in 2020 to just £8.5m last year
The accounts also made note of the loss of De La Rue's work manufacturing 海角视频 passports. The company lost the contract to print the post-Brexit blue passports two years ago to Franco-Dutch firm Gemalto.
The firm said: "We worked with Her Majesty's Passport Office on the completion of the transition to the new supplier for the 海角视频 Passport production contract, and we expect no revenue or operating profits from this contract going forward."