De La Rue boss to depart after losing UK post-Brexit passport gig

UK banknote printer De La Rue announced on Thursday that Martin Sutherland had agreed with the Board of the company to step down as Chief Executive Officer and as a Director of the Company.

News of his departure followed Sutherland's failure just over a year ago to clinch the £490m contract to print the post-Brexit blue passport. Ironically, the deal for the post-Brexit passports was finally awarded to Franco-Dutch company Gemalto.

The group also revealed a 78% drop in its full-year pretax profits to £25.5m and warned that tough competition would lead to lower profits next year. The company is now set to slash £20m in costs.

During the period, the company also took a £18.1m hit from a credit loss linked to the "outstanding accounts receivable of a customer in Venezuela currently unable to transfer funds due to non-UK related sanctions."

Net debt meanwhile, jumped from £49.9m to £107.5m, mainly due to a roughly £40m increase on account of the timing of revenue and the balance due from Venezuela.

The group also plans a reorganisation of the business over 2020 to “enhance our strategic focus and generate greater efficiencies”.

That includes simplifying the business to focus on two divisions – currency and authentication.

“By aligning the group structure into two divisions focused on our chosen markets, we will not only optimise the operations of each division to the market dynamics they face, but we will also give ourselves future strategic options,” De La Rue said.

For the full year ending on 31 March, De La Rue posted a 6% rise in adjusted operating profits to £60.1m on the back of a 12% to £516.6m increase in revenues, led by the performance of its currency division, the company's main unit.

In Currency, sales were up 16% to £398.9m thanks to higher volumes in banknote printing and the growth of security features, while in Identity Solutions they fell by by 4% to £78.4m and in Product Authentication & Traceability they declined by another 2% to £39.3m.

The board said it was already selecting possible candidates to be succeed Sutherland and that he would continue to serve as CEO until his successor is in place in order to assist an orderly transition.

Sutherland said: "After nearly five years leading this great Company I am proud of what we have achieved together. It has been a time of significant structural change in the industry and real strategic change within the business. With a clear strategic vision now in place and being executed, now feels like the right time for me to hand over to a new leader, to take things to the next phase. I wish the Board and the Company every success."

Chairman Philip Rogerson said: "For the past five years Martin has brought tremendous energy and strategic insight to moving the Company from a traditional manufacturing business to a service-oriented business building on leading edge technological solutions, as well as refocusing the business on its core strengths and bringing greater balance to the portfolio.

“The company is now well positioned to move to the next phase of this journey. I would like to take this opportunity to thank Martin on behalf of the Board and colleagues for all that he has achieved. I would also like to thank him for his commitment to ensuring a smooth handover of his responsibilities. We will be conducting a search for his successor, which will begin immediately."

De La Rue kept its full-year payout per share at 25.0p.

Shares in the group plunged almost 20% to 370p.