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

The company, which designs a third of banknotes globally, said demand for cash had fallen since Covid.

It said that this was "causing a significant degree of uncertainty" and meant its full-year profits would fall short of expectations.

The firm is having to renegotiate its loan agreements with its banks due to the tougher trading conditions.

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 everywhere, as people have shifted to using card - and particularly contactless - payments.

De La Rue said there are signs of recovery but is not sure when that will happen.

"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," it said.

The 200 year-old firm added it was in talks with its banks over its loan agreements because of lower profits and higher interest rates, following a succession of rises by the Bank of England.

De La Rue 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.

The scene inside the De La Rue banknote printing hall is a mixture of the mundane and the surreal.

The factory floor feels very familiar with hi-tech machinery, pallet carriers and staff that appear typical of many production centres.

But the "product", as it is called, turns your head. Millions of banknotes, in various stages of production, are here. Obviously, the security is extremely tight.

So many banknotes printed every day feels at odds with our everyday lives - when, for many people, cash use is a rarity as we pay for goods and services with cards and smartphones.

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

The company, 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.

-bbc