De La Rue sheds UK staff as more directors move on

The shake-up at De La Rue rumbles on, with the chairman resigning after 170 layoffs are announced at its Gateshead banknote and security printing plant.

The job losses at the plant have been blamed on the loss of the UK passport contract, according to the Unite trade union, which said the 170 job losses come on top of 100 passport printing jobs due to go in the autumn. There will still be about 200 workers doing currency printing at Gateshead.

Unite national officer Louisa Bull blamed the lyoffs on the decision to award the printing of post-Brexit UK passports – worth £490m – to French-Dutch firm Gemalto, saying it was “short-sighted and blinkered…and seriously undermined the financial viability of the Gateshead operation.

”Most European countries regard the printing of passports as a national security matter which should be done in the home country,” she asserted, adding: “the final distasteful irony is that Gemalto has now outsourced the printing of UK passports to a Polish firm.”

It’s worth noting however that the downsizing comes as De La Rue pivots away from manufacturing-based operations and towards and towards a technology-led business in areas like product security and brand protection. Earlier this month the company also announced the sale of its international identity solutions business to US rival HID Global, after issuing a profit warning that weighed heavy on its share price.

Meanwhile, De La Rue has also announced more boardroom departures, less than one month after revealing that chief executive Martin Sutherland is stepping down.

Chairman Philip Rogerson has said he plans to retire, as part of an “orderly succession process” once a new CEO has been found and settled in. Senior independent director Andy Stevens will also leave by the end of the year, due to “other commitments”, says De La Rue in its annual report.

Bubbling away in the background at De La Rue is a battle with activist shareholder Crystal Amber which has called the company’s problems “self-inflicted”, maintained it is now a takeover target, and taken issue with the remuneration packages being offered to Sutherland and Rogerson.

The investment fund, headed by Richard Bernstein, is incensed that Sutherland will leave with a £954,000 payout made up roughly half from bonuses – despite the company’s recent performance and the staff redundancies. Bernstein is also unhappy with Rogerson and his £194,000 annual fee, calling for his resignation earlier this week.

Just written to the Chairman of De La Rue asking him to now stand down. This culture of enriching 'fat cats' whilst making loyal staff redundant is abhorrent. We have asked that as a first step, the CEO's bonus is returned. It should be shared amongst those being made redundant.

— Richard Bernstein (@CrystalAmberRB1) June 26, 2019

De La Rue says it has been facing a tougher competitive environment and was also hit by an £18m charge last year caused by the Venezuelan central bank being unable to pay its bill due to sanctions.

The company revealed a drop in pretax profits for the last financial year, despite a 12 per cent hike in revenues to £517m, although operating profit rose 6 per cent to just over £60m.