Yahoo Finance Death of cash hits Britain’s banknote printer hard
Collapsing demand for cash has forced the printer of Britain’s banknotes to warn of “significant uncertainty” about its future.
De La Rue said demand for cash has hit a 20-year low as people increasingly switch to cards and digital payments around the world.
Just 15pc of sales in Britain were made using cash in 2021 compared with 62pc in 2006, according to figures from UK Finance.
Plummeting banknote usage has forced De La Rue, which also prints passports, to slash its sales forecasts and issue its third profit warning in a little over a year.
The London-listed company said it faced “significant uncertainty” because of low order volumes.
Clive Vacher, De La Rue’s chief executive, told the BBC that banks increased orders for notes during the pandemic but were now delaying new purchases.
He said: “They always do that when there are crises, because of the security that having cash around them has.
“So we expected a downturn, which has indeed happened, but that downturn is probably extending deeper and probably for an extra nine to 12 months than we'd normally expect in the normal cycle of things.”
Shares fell as much as a third in early trading on Wednesday to 38p, valuing De La Rue at £75m.
The 200-year-old business was worth nearly £1bn a decade ago, but has suffered as consumers increasingly abandon cash.
De La Rue said demand for banknotes “has been at the lowest levels for over 20 years, resulting in a low order book going into” its next financial year.
The company was already struggling with surging energy prices and the loss of a contract to produce Britain’s blue passports after Brexit.
De La Rue said it was in talks with lenders about amending its banking covenants, in part due to the recent jump in interest rates.
It is also in talks with pension trustees to delay a payment into the staff fund of £18.75m.
The company expects full-year adjusted operating profit for 2024 to be “in the low £20m range”, which is half of earlier estimates of £40.1m.
