De La Rue says demand for banknotes at its lowest in 20 years

Banknote maker De La Rue has warned full-year profits will fall short of expectations after demand for currency hit its lowest level in 20 years.

De La Rue added it was in talks with its banks over its loan agreements because of lower profits and higher interest rates.

The 200 year-old firm said the downturn in demand for money "is causing a significant degree of uncertainty".

It said there are signs of recovery but is not sure when that will happen.

It is understood that the downturn in demand for banknotes is global, rather than specifically in the UK.

While the UK saw a rapid decline in the use of cash during Covid lockdowns as online retailing soared, other countries in the developing world continued to use notes and coins.

But since then demand for cash has fallen, according to De La Rue.

The firm said: "The demand for banknotes has been at the lowest levels for over 20 years, resulting in a low order book going into fiscal year 2024."

De La Rue also detailed the impact that a succession of interest rate rises by the Bank of England has had on the business.

It now expects its full-year profit to be in the "low £20m range" while the interest costs on its loans has risen.

It said it is "in discussions with its lending banks in relation to seeking an amendment to its banking covenants, reflecting the revised outlook and also reflecting the increase in the company's funding costs resulting from higher Bank of England base rates".

De La Rue employs 1,800 people globally and works with 140 countries.

All current Bank of England banknotes are printed by the firm at a site in Debden, Essex.

It is also printing the new banknotes featuring the image of King Charles, although those will not enter circulation until the middle of next year.

De La Rue, which is headquartered in Basingstoke, Hampshire, has contracts with central banks around the world.

For some of those banks, it prints money, while for others, it provides polymer for banknotes well as other services.

More than a third of all new bank notes globally issued in the past five years were designed by De La Rue.