De La Rue's future in doubt as loan payment deadline looms

De La Rue has said once again that its ability to continue as a going concern is at risk, as it continues negotiations over the sale of its two operating divisions.

The 200-year-old firm confirmed in May that it had put its authentication and currency businesses up for sale, saying "a number of parties" had expressed an interest as it delayed the publication of its full-year results. Now, it has said that the sale of at least one will be needed to cover a £235m loan that becomes payable next June.

Those were released this morning and revealed solid sales growth of 12.5 per cent to £103m ($133m) for its authentications unit – thought to be the most likely to command a quick sale – meeting a long-held objective to drive annual revenues above the £100m threshold.

Currency sales fell almost 19% to £207 million, however, in part as a result of a global downturn in the demand for notes due to online banking and contactless payments, although De La Rue said that the unit's order book is "strong."

Without a deal, the company may not be able to continue operating beyond September 2025, although the company said it was "confident that the range of strategic options and the progress being made with them will ultimately allow the group to repay the revolving credit facility in full before its expiration."

In a statement, chief executive Clive Vacher said both businesses had "successfully navigated substantial trading challenges faced in the last financial year" and "enter the current financial year well positioned to take advantage of the increasing opportunities available to them."

He pointed to a recovery in the currency market, which has been depressed due to banks stockpiling cash during the pandemic, as well as the fact that authentication had locked in "all four substantial contracts that it was targeting for renewal in the last year" and quate to £150m in future revenue.

De La Rue chair Clive Whiley said that since the May announcement the company had seen "more entities" get involved in the sale negotiations. "These workstreams continue and we will provide a further update ahead of our annual general meeting on 25 September," he added.