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De La Rue boss has 'no regrets' over UK passport row

The boss of bank note printer De La Rue has defended his short-lived battle with the UK Government over its decision not to renew its contract to print British passports.
Martin Sutherland, chief executive, said he had “no regrets” about his fiery response to losing the deal for UK passports, which De La Rue will continue to print until the middle of 2019.
“It has not harmed my position and all my conversations with investors are supportive,” he added. “We have a good strategy and are delivering solid results.”
De La Rue hit the headlines in March when it lost the 10-year, ?490m contract to design and print Britain’s passports to French-Dutch rival Gemalto, just days after its finance director quit and it warned on profits.
Mr Sutherland challenged Prime Minister Theresa May to visit the company’s Gateshead plant and “explain to my dedicated workforce why it's sensible to off-shore the manufacture of a British icon”. Despite taking heavyweight legal advice on how to contest the award he quickly abandoned the fight, saying it the “risk-reward does not stack up”.
De La Rue had spent ?4m on bidding to renew the passport contract, which employs 200 staff.
Revenues revenues at the company rose 7pc to ?493.9m in the year to March 25 while pre-tax profits nearly doubled to ?113.6m; however these figures were boosted by the ?60m sale of its paper-making business.
Stripping these out, revenue was 4pc better at ?426.4m, but operating profits fell 11pc to ?62.8m.
De La Rue boss has 'no regrets' over UK passport row

The bulk of De La Rue's business comes from currency printing with the Bank of England a main customer

Credit:
Alamy
Mr Sutherland dismissed the suggestion that the company’s weakened share price had left it vulnerable to a takeover, and said it was maintaining its current line-up of advisers: JP Morgan Cazenove, Investec and Rothschild.
He added: “We’ve got the strongest balance sheet we've had in five years, debt is down from ?120m to less than ?50m, the pension deficit has gone from ?237m to ?87.6m.”
De La Rue
Mr Sutherland said a review had been launched so De La Rue could learn from the passport contract debacle - a situation he called “unique”. He added: “It is too early to say what we can learn.”
Missing out on the prestigious contract had not harmed De La Rue’s ability to win work producing other countries’ identification products, he insisted, adding the company had recently agreed deals with Australia, Bangladesh, Malta and the Dominican Republic.
De La Rue boss has 'no regrets' over UK passport row

De La Rue chief executive Martin Sutherland says he has "no regrets" about his reactions to the loss of the UK passport contract
De La Rue is looking to expand operations outside its dominant money producing operation, branching out into analytics software used by central banks to forecast demand for money and security seals and stickers to guarantee the provenance of products.
“Demand for authentication has grown 100pc year on year,” Mr Sutherland said. “As online retail grows its important that consumers can know they are buying the real thing.”
De La Rue will boost investment in research and development 13pc this year. 
The company is also a market leader in producing the polymer used to print plastic banknotes, and doubled its output in the year to 810 tonnes.
De La Rue boss has 'no regrets' over UK passport row

An engraver checks printing plates for the ?5 note produced by De La Rue

Credit:
Alamy
The order book rose 6pc for the year ahead to ?363m, but this included UK passports, which will run out in the following financial year, potentially leaving a hole in the accounts.
De La Rue forecast profits at the same level in the coming year held its dividend at 25p a share.  
Shares rose 4pc on the results and Accendo Markets said investors were “rewarding De La Rue’s progressive thinking and overlooking the less-than-stellar guidance”.
Analyst Artjom Hatsaturjants added: “The ball is now in De La Rue’s court to prove investor ‘full faith and credit’ is justified and that the company can bounce back from setbacks in its traditional products.”
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