SHARES in De La Rue fell by 34 per cent on Friday after it issued a profit warning.

The Basingstoke headquartered company has announced that it expects profits to be £20million lower than in 2013/14 due to difficult market conditions, which are expected to continue into the next financial year.

De La Rue which prints banknotes for the Bank of England as well as the UK’s biometric passports said prices and margins for its printing services and secure paper were being squeezed.

Last year its operating profit was £89.3m.

Chairman Philip Rogerson, said: “While disappointing to announce this trading update De La Rue, as the market leading banknote printer, remains a strong, profitable and cash generative business. “We will continue to pursue efficiency gains, invest in the business and in R&D for the future.”

In early September De La Rue was named as the Bank of England’s preferred choice to print plastic banknotes.

It is expected to sign a contract in October to become the printer of England’s banknotes for the next 10 years, with work due to commence in April 2015.

However, it is believed that the value of the contract is lower than expected.

De La Rue said rates of growth in new business in recent months had been slower than expected and described the global transition to biometric passports as disappointing.

De La Rue produces banknotes for more than 150 countries, and passports or identity systems for over 65 governments.

De La Rue’s new chief executive Martin Sutherland is expected to take up his new post on October 13.

Having come from BAE Systems, he follows the departure of Tim Cobbold who left in March.

Today De La Rue shares are trading at 473.10p.