De La Rue’s turnaround plan could result in the loss of up to 260 jobs, as the company considers closure of its security printing facility in Gateshead.

Production of banknotes and passports will be halted at the plant in the northeast of England, which has been hit by the loss of the contract to produce the UK passport two years ago. UK passport production will stop shortly as the contract transfers to Franco-Dutch firm Gemalto.

The move comes as De La Rue has cued up a £100m fundraising to finance a shift in its business to new areas such as product authentication and polymer banknotes, after a series of profit warnings over the last couple of years.

The cash injection would do away with any concerns about the company’s ability to continue operating – voiced last year by new chief executive Clive Vacher – and provide the funds needed to complete its three-year turnaround plan ending in fiscal 2022/23.

In its just-published annual results, De La Rue revealed a 17 per cent drop in adjusted revenues for fiscal year 2019/20 to £427m ($528m), with currency down by almost a third to £282m and authentication up 60 per cent to £68.5m. Operating profit fell 61 per cent to £23m.

“We are now well underway with our plans to turnaround the company, with opportunities to grow our revenue and reduce our cost base,” said Vacher.

“Our cost cutting initiatives will enable us to compete harder in the currency market, while the development of security features and polymer will drive growth for this division.

“Authentication and polymer continue to show strong growth and we see an increasing pipeline of new opportunities,” he added, suggesting countries may replace banknotes more frequently because of the coronavirus crisis, and be more likely to switch to polymer.

On the other hand, some experts think the pandemic will hasten the decline of cash and accelerate the use of contactless payment.

The bulk of the fundraising – some £80m – would be spent on the turnaround plan, with another £15m earmarked for polymer note production.

It comes shortly after the Serious Fraud Office said it was dropping a corruption investigation into the company’s activities in South Sudan.