De La Rue PLC (LSE:DLAR) shares plummeted after the company downgraded its profits guidance for the year to March, saying its operations have been impacted by high levels of employee absences due to the COVID-19 pandemic, shortages in computer chips and raw materials and by increased supply chain costs.
In a trading update, the banknote and official documents printer forecast adjusted operating profit of £36mln-£40mln for the year to 26 March 2022, similar to last year and below market expectations of £45mln-£47mln.
De La Rue said that despite the revised profit outlook, its two core businesses showed substantial year-on-year growth of in adjusted operating profit of 35%-45%.
The impact from the challenging external factors is expected to increase into financial year 2022-23, slowing the company's adjusted operating profit growth profile, although it still expects to achieve "significant" year-on-year growth.
In view of the strong headwinds, the results from the company's turnaround plan, aimed at cutting costs and growing its Currency and Authentication businesses, are set to be delayed by around 12 months.
"Despite the macro challenges that are delaying aspects of the turnaround plan, De La Rue continues to increase adjusted operating profit in both divisions year on year, and the plan anticipates this to continue going forward," said CEO Clive Vacher.
"The company's leadership has worked hard to mitigate many of these external effects, with the cost reduction activities we have implemented since early 2020 having a significant impact in supporting our underlying performance while we navigate these external factors."
De La Rue said net debt expectations remain unchanged.
Shares fell over 27% to 108.53p in opening trade.