British banknote maker De La Rue is cautiously optimistic about the demand for cash, fuelled by high inflation and central banks restocking notes, it said today, after reporting a 15% drop in half-yearly profit.
Demand for banknotes had slumped to a two-decade low earlier in the year, De La Rue said in April, as central banks stockpiled cash during the pandemic and digital banking and contactless payment become more popular.
But the designer of currency notes, including the new King Charles banknotes, said it has seen demand recover with inflationary pressures driving banknote orders from some countries.
"We are seeing good signs of recovery, but not quite yet to sort of pre-pandemic levels, or levels that we saw at the early stages of the pandemic," CEO Clive Vacher said in an interview.
The company designs around a third of the world's banknotes and its headquarters houses what it calls the largest currency design studio, offering governments and central banks varied levels of security features to prevent counterfeiting.
"What we have seen over the last sort of 18 to 24 months is that despite significant inflation worldwide, there's been a sort of counterbalancing factor, which is that countries, particularly in the areas of the world where we are strongest, have got a lot of pressure on their budgets, so they have delayed purchasing decisions on banknotes," Vacher said.
The company, more than 200 years old, reported an adjusted operating profit of £7.9m for the six months to September 24, compared with £9.3m a year earlier.
It had forecast being slightly ahead of break-even.
Shares in the company, which have lost nearly half of their value in the last two years, were down 6% today as it kept its annual outlook unchanged despite results coming in better than its previous expectations.
