The banknote printer pinpointed a decline in trading volumes within its currency business unit, which accounts for a major part of De La Rue’s sales, for the drop from £528.3m the previous year.

Basingstoke-based De La Rue has also previously cited additional capacity from other manufacturers, such as Germany’s Giesecke & Devrient and Oberthur in France, for the tougher trading conditions.

As a result, the group has accelerated the “improvement plan” it launched in 2011 by increasing its cost-savings target by £10m to £40m for 2013/2014.

This plan includes cost reduction measures, such as the consolidation of De La Rue’s Stroudley Road and Dunstable factories into its Westhoughton and Gateshead facilities, which is now complete and generating annual savings of £6m.

Tim Cobbold, chief executive of De La Rue said the group delivered an operating profit of £63m “despite a much more challenging banknote paper market”.

While underlying pre-tax profits were up 2% during the 12 months to £59.1m, this excludes the £7.6m cost associated with implementing the on-going improvement plan.

Cobbold added: “Overall order intake reflected the difficult market conditions and an historically low level of overspill volume available to the commercial producers.

“It was also impacted by the previously announced delay to a number of important orders, some of which have since been received.”

De La Rue’s latest results come as its contract to print the UK’s banknotes remains in the balance after the Bank of England (BoE) issued a tender notice asking up to five operators to bid for the £1bn contract late last year.

The contract, which could potentially run for up to 14 years, will start in April 2015 and sees alternative suppliers bidding to print up to 12bn banknotes at BoE’s Debden, Essex facility.

De La Rue also remains blighted by the paper production problems that impacted the group in 2010, resulting in the departure of then chief executive, James Hussey.

The group was forced to temporarily suspend aspects of its paper production at its largest plant in Overton, Hampshire, following the discovery of “quality and production irregularities” at the facility.

In its latest results, De La Rue said that provisions have been made in previous years for the costs associated with the investigation and production surrounding the issue.

However, it said that no provisions had been made for the “potential cost of resolutions or for potential fines from regulatory authorities”.

The group added: “The nature and extent of these resolutions will be the subject of ongoing discussions, the outcome of which cannot be estimated reliably at present.

“The timing, response and outcome of the consideration by the authorities of the reported findings of the investigation is also uncertain and the financial consequences, if any, cannot be estimated reliably at present.”