De La Rue to raise £100m, cease Gateshead printing

Banknote printer De La Rue said it was raising £100m and axing jobs at its Gateshead plant in England after losing the contract to produce UK passports after Brexit.

De La Rue on Wednesday said banknote and UK passport printing operations at Gateshead would stop, with some core services and roles retained at the site.

Half the £100m would be raised in a placing at 110p a share and the rest through a placing and open offer at the same price.

The company reported a 61% fall in full year adjusted operating profit to £23.7m pounds. Revenue fell 17% to £426.7m.

It reported strong global demand at its currency division as central banks looked to increase stock levels during and after the Covid-19 pandemic.

“This has resulted in a number of significant opportunities for the group's Currency division which are being actively pursued and the board believes that this strong demand for currency will continue for the remainder of full year 2020/21,” the company said in a statement.

One of the UK’s oldest companies, De La Rue issued a profits warning last year after losing the contract to print new post-Brexit blue British passports to Franco–Dutch firm Gemalto, outraging hardcore Brexiters.

On Tuesday Britain's Serious Fraud Office closed a year-long investigation into the firm over alleged corruption in South Sudan and that no further action would be taken.

The fraud agency said that after a “detailed review of the available evidence” it found that “this case did not meet the relevant test for prosecution as defined in the code for crown prosecutors”.

Chief executive Clive Vacher said the fundraising would help the company’s turnaround plan.

Vacher, who took charge of De La Rue last October last year, in February said "considerable" work was needed at the company as he unveiled plans to improve profitability by cutting costs and investing in polymer notes.