It’s never good when a company warns its results will fall towards the bottom end of expectations. When the warning is in the third paragraph of a directorate change announcement - as was the case with De La Rue (DLAR) - it looks even worse.
The currency and identification specialist's chief financial officer Jitesh Sodha is leaving to pursue a career outside of the company, but will stay with the business until the end of September to ensure a smooth transition. Investors balked at the news, sending the shares down 14 per cent on the day.
In 2015, management was forced to rethink its strategy, following overcapacity in the banknote market and increasing usage of online payment systems. That meant cutting headcount, selling its underperforming cash solutions business and trying to diversify away from banknote printing. That has borne fruit - pre-tax profits improved by 10 per cent during the first half.
The consensus range for expected operating profit this year is between £71m and £73m. Following this update, J.P. Morgan Cazenove reduced its operating profits to £71m and target price by 10p to 700p.
