THE company that prints UK banknotes, passports and postage stamps insisted jobs at its flagship North-East factory are safe despite group profits falling by more than a third.

A price war in the global banknote-printing industry and a strong pound has hit 201-year-old De La Rue, which employs 600 staff at its Gateshead sites.

The business received a major vote of confidence in September when the Bank of England (BOE) renewed its 10 year deal to produce sterling.

A range of plastic notes, which will include a new £5 featuring Winston Churchill, will be made at De La Rue’s plant in Debden Essex from 2016.

Its two factories on Team Valley, Gateshead, where UK passports and postage stamps as well as foreign currencies are made, remains key to the firm’s long term plans, recently-appointed chief executive Martin Sutherland told The Northern Echo.

Mr Sutherland had the pleasure of signing the BOE deal shortly after he joined the world’s largest privately owned banknote printer, but he accepted the business faced significant challenges.

“I have only been with De La Rue for six weeks but I can see that innovation is key to everything that we do,” said Mr Sutherland. “It is a very challenging market so we have to offer our customers an even wider range of high quality products at the right price.

"Gateshead is our flagship UK site. We have made a major investment there in recent years. It has a skilled, loyal workforce and it continues to be very important to us. We don’t envisage making any changes to staff numbers there," he added.

The Gateshead site this year marks its half century. It is the largest commercial banknote factory in the world, producing about ten million banknotes a day - up to 3.1 billion a year. Despite cutting back at other sites, including at its Dulles facility in the US, De La Rue has invested about £5.5m in Gateshead over the last three years.

In yesterday’s trading update the firm said revenues for the six months to September 27 fell 8 per cent to £215m, sending pre-tax profits tumbling by 36 per cent to £18m.

The downturn in revenues is a result of falling income from its banknote-printing business, even though the firm printed a slightly higher number of notes than last year. Industry experts think there are too many players in the market many of them

government-run manufacturers, which has put pressure on prices.