SHARES in banknote printer De La Rue have fallen by about 10 per cent this morning as it reported a drop in profits amid "difficult market conditions".

But the business which operates the world's largest banknote factory at its Gateshead site said the results were in line with expectations and bosses hope to reap the benefits of its turnaround strategy.

Business Editor Andy Richardson gets a glimpse inside the De La Rue factory 

Martin Sutherland, chief executive who joined the business last October, said: “In my first seven months, I have strengthened the leadership team and restructured the organisation to better align the business with its strategic needs as well as initiating a number of actions to achieve substantial cost savings which will be largely reinvested in the business to drive growth.

"I have completed a review of the business and formulated a clear Strategic Plan to deliver growth and improved profitability in the long term through a greater focus on customers, innovation and delivery.”

De La Rue's Team Valley site produces passports and postage stamps as well as about ten million foreign notes a day. Last month the firm announced it was making about 10 per cent of its 600 Gateshead workers redundant as part of efforts to cut costs.

De La Rue has invested about £5.5m in its Gateshead site over the last three years.

In today's announcement it revealed full year operating profit dropped by 22 per cent to £69.5m for the year ending March 28, down from last year’s figure of £89.3m, as pricing pressures led to lower margins in its currency business. Pre-tax profit during the period fell 25 per cent on the same time last year, to £38.9m.

The firm recently won a 10-year deal worth about £1bn with the Bank of England to print sterling banknotes, including new plastic notes, which will be made at its plant in Debden, Essex.