Banknote printer De La Rue set to raise £100m amid job cuts
De La Rue has announced plans to raise £100m in a placing to support it through the pandemic and implement a turnaround plan.
In a separate final results statement, De La Rue reported underlying operating profits had slumped £60m to £23.7m in the year to 31 March. Revenues are down 17 per cent to £427m.
The firm has had its fair share of setbacks in recent years, including two profit warnings in 2019, a corruption probe by the SFO and a huge debt pile.
Debt rocketed from £107.5m in 2018 to £170.7m in November 2019, when it failed to pay a dividend as it dropped to a £9m loss.
The firm is therefore asking shareholders to stump up £100m in a bid to navigate the coronavirus crisis and its three year turnaround plan.
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The fundraising also comes as the firm announced plans to close its banknote printing operation in Gateshead, which the potential loss of hundreds of jobs.
The firm’s passport operations will also close in Gateshead as the contract transfers to a new supplier. De La Rue lost its fight to deliver a £490m contract to print Britain’s blue passports to rival Gemalto last year.
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There was some good news though as the Serious Fraud Office announced the end of its 11-month probe yesterday. It concluded the investigation had not met the sufficient threshold for prosecutors.
The SFO opened a probe in July 2019 over suspected corruption in South Sudan. In a statement yesterday, it said: “Following extensive investigation and a thorough and detailed review of the available evidence, the SFO has concluded that this case did not meet the relevant test for prosecution as defined in the Code for Crown Prosecutions.”
Chief executive Clive Vacher said: “We are now well underway with our plans to turnaround the company, with opportunities to grow our revenue and reduce our cost base. Our cost cutting initiatives will enable us to compete harder in the currency market.”
“The £100m equity capital raising we are announcing today will strengthen the group’s balance sheet and help us deliver the Turnaround Plan,” he added.
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