De La Rue PLC (LSE:DLAR) shares tanked 20% on Wednesday after guidance for the full year was lower than analysts had been estimating.
The banknote printing and authentication group reported £164.3mln of revenue for the six months ended 24 September 2022, down 8% on a year ago, with adjusted operating profit tumbling 46% to £9.3mln, though this was in line with previous guidance given in July.
For the full-year, adjusted operating profit is expected to be £30-33mln, versus analyst estimates of around £36mln.
At the statutory level, De La Rue swung to an operating loss of £12.6mln from a profit of £13.8mln last time, reflecting an exceptional items charge of £21.4mln.
Much of these exceptional charges relate to the ending of the company's relationship with its former Portals paper business, which was said to be "going well", with orders placed with five paper mills at lower aggregate costs and a target of at least £4mln of annual upside reiterated.
Net debt increased 21.1% to £86.5mln and was said to remain "on track" for full-year guidance of £88-92mln, while existing bank facilities were extended to the start of 2025.
Nearing the end of its three-year turnaround plan, which it is said "saved De La Rue and has significantly increased resilience", the company's management outlined a plan for the next three years, with efficiency actions expected to save an annualised £12mln.
"De La Rue expects to be free-cashflow generating, after pension payments, next financial year onwards," it said.
The shares fell to 79.68p, wiping out gains made since July.