Last checked at 
* Sees FY profit lower than market view
* Sees H1 profit in low-to-mid single digit millions
* Shares plunge to 21-year low
(Adds shares, background, analyst comments)
By Yadarisa Shabong and Indranil Sarkar
Oct 30 (Reuters) - De La Rue shares plunged to
their lowest in more than two decades on Wednesday after the
British passport and banknotes printer cut its profit forecast
for the second time in five months.
Analysts said the move by new chief executive Clive Vacher
was aimed at resetting expectations as he sets out on reviving a
business hit by weak profit margins and a fraud probe.
De La Rue, which prints around seven billion banknotes and
15 million passports a year, said it expected annual profit to
be significantly lower than market expectations, with the
first-half result likely to be in the low-to-mid single digit
millions compared with 17 million pounds ($22 million) a year
earlier.
The company did not specify the reason for the downgrade in
its brief update and declined to comment further.
Its shares, listed on Britain's small-cap index,
fell as much as 30% to a 21-year low of 131.6 pence.
De La Rue has had a series of setbacks this year, including
a one-off hit for non-payment from Venezuela and a British
investigation into suspected corruption in South Sudan. De La
Rue has said it is cooperating with the probe.
"Into this scenario walks new chief executive Clive Vacher.
He is an old hand at turnarounds and appears to be following the
playbook – wasting very little time from his arrival at the
start of the month to reset expectations," said Russ Mould,
investment director at AJ Bell.
De La Rue had said in May that operating profit this year
would be "somewhat lower" than last year, pointing to a margin
squeeze from competitive pressures in banknote printing.
"It's clearly the problems from the outgoing leadership,"
CMC Markets analyst David Madden said.
The warning in May was followed by the company replacing
Chief Executive Martin Sutherland with turnaround specialist
Vacher in October, who faces an uphill task alongside new
chairman Kevin Loosemore.
De La Rue's woes have been compounded by the loss of its 400
million pound contract to produce Britain's passports ahead of
the country's planned exit from the European Union.
To offset weakness in its traditional businesses, De La Rue
had been shifting to new areas, securing contracts with the UK
tax authority and Saudi Arabia and focusing on its currency and
authentication divisions.
($1 = 0.7763 pounds)
(Reporting by Yadarisa Shabong and Indranil Sarkar in
Bengaluru; Editing by Arun Koyyur and Mark Potter)
