THREE hundred jobs are to go at Hampshire company De La Rue which has been hit by a sharp deterioration in business from financial institutions in Spain and Germany.

The bank note printer warned that difficult market conditions would continue in 2003 after reporting profits for the year almost halved to £48.1m.

Problems at its cash systems division saw sales plummet 21 per cent to £292.8m in the year to March 29.

The company hinted at job losses in February when it said further action was needed to reduce its cost base in Europe and refused to rule out redundancies.

De La Rue, based in Basingstoke, said the cost cutting was designed to underpin trading in current market conditions and restore profits.

The latest job cuts will be made at "a number of key sites" mainly across Europe. Last September it axed 350 jobs and closed a factory.

Restructuring of the cash systems unit is under way, with annualised cost savings of £7m targeted from the redundancies, at a cost of about £8m. De La Rue saw almost £200m wiped from its share price in one day last February after making a shock profits warning.

On top of the problems at the cash systems unit, De La Rue's global services division was hit by customers deciding to postpone identity systems projects. As a result, the division made an operating loss of £4m.

The unit makes security documents including passports for United Nations workers.

In March, the company completed the acquisition of the Bank of England's banknote printing operations, at Debden, Essex, for £10m.

In the current year, De La Rue said its currency division was expected to be broadly stable, despite the adverse impact of pension charges, while the banknote paper unit was expected to return to production levels closer to capacity. At the bottom line, the group fell into pre-tax losses of £4.7m compared with profits of £100.9m last year.