Troubled security printer De La Rue plans to slash costs in a bid to turn around its fortunes.
The move comes after backers brought in independent advisers to review the firm’s finances.
De La Rue prints UK notes for the Bank of England. It used to undertake similar roles for many governments around the world, as a global leading high security printer. But its demise was highlighted last year when it failed to win the £490m contract to produce the new blue UK post-Brexit passports. That was awarded to the Franco-Dutch firm Gemalto.
The business, based in north Hampshire, UK, had already outlined plans to reduce costs by £10m. This latest round aims to slash a further £35m in the second half of its 2020-21 financial year and goes further than its previous pledge to cut £20m.
De La Rue said this latest move would allow it “to tender for currency orders it would previously have declined, and to improve margins on existing work”.
The firm, founded in 1821, has won plaudits for the security technology used in the latest £20 notes to combat counterfeiting. De La Rue will also design and produce the new £50 note.
But its failure to secure the passport contract dealt a major blow. Many expected that, for political if not economic reasons, the contact would go to a UK business.
As a result, debts rose from £107.5m in 2018 to £170.7m in November 2019. It failed to pay a dividend, reported a £9m loss and warned of “material uncertainty” over its future.
“[This] plan drives extensive cost reduction and, in parallel, offers a substantial investment opportunity for growth,” said chief executive Clive Vacher.
De La Rue shares rose more than 18 per cent on the news.