RISING demand for new currency will increase profits at a North-East banknote maker, bosses have said.

De La Rue, which has factories at Gateshead, says it expects full-year operating profits to reach about £62m.

The company says the figure is higher than previous expectations and comes after a strong performance on contracts in its currency division.

In a trading update for the year to March 26, the business also revealed net debt was £5m lower than a year ago at £106m.

Late last year, De La Rue unveiled plans to overhaul its operations, which could see British postage stamps no longer printed in the UK.

The firm issued proposals to switch production between Gateshead and Malta, saying the move will create up to ten jobs in the North-East, where its banknote making is complemented by passport printing.

Under the changes, officials say the Gateshead banknote operation, which is already the largest facility of its kind in the world, will take on some contracts held by De La Rue’s Malta site.

The plans will mean Gateshead loses agreements to make security identifications, such as stickers used to validate Microsoft products.

The firm employs 550 people at its Tyneside plants, but was last year forced to make some staff redundant amid profit warnings.