De La Rue said it was confident about its full-year performance as the value of its order book had risen, but also said market conditions remained volatile.

The cash processing solutions business, which includes the sale and maintenance of high-speed sorting machines to print works and banks, slid further into the red in the period, recording an operating loss of 4.7 million pounds.

This business accounts for about 10 percent of group revenue, according to the company's latest annual report.

The loss helped to push overall pretax profit in the six months to Sep. 26 down 38 percent to 12.8 million pounds.

Chief Executive Martin Sutherland told Reuters that demand at the cash-sorting machine business had been weak so far this year.

"Our order intake in the first half was quite poor hence we need to look at our pricing and therefore our unit cost of production," he told Reuters.

"We will review all options for that business moving forward."

De La Rue, which prints more than 150 national currencies and British passports, said print and paper volumes had been better than expected thanks to large orders from countries, which usually print their own banknotes, needing extra cash.

Its shares were 1.6 pct higher at 452 by 0844 GMT.

(Reporting By Costas Pitas. Editing by Jane Merriman)