Bank note printer De La Rue (DLAR) fell 27.3% to 109p on a major profit warning driven by supply chain issues, rising energy and raw material costs and staffing shortages linked to Covid.
As a result the company said it now expected adjusted operating profit for the 12 months to 31 March 2022 to be broadly similar to last financial year, in the £36 million to £40 million range, versus market expectations of approximately £45 million to £47 million.
This revised outlook still ‘demonstrates substantial year-on-year growth in our two core businesses,’ the company said. A claim which fell on deaf ears.
The company said the pandemic and supply chain issues would delay the results of its turnaround plan by about 12 months.
HEADWINDS TO CONTINUE INTO NEXT FINANCIAL YEAR
‘In addition, we see these factors continuing as incremental headwinds into financial year 2022-23, with the effect of slowing the company's adjusted operating profit growth profile,’ De La Rue added.
Numis analyst James Beard commented: ‘Whilst it is disappointing that these external challenges have worsened in recent months, management remains committed to its Turnaround Plan and still expects to deliver profit growth in the outer years.’
Beard notes management’s net debt expectations are unchanged adding that ‘we do not view the balance sheet as a concern’.
