Business

Banknote printer De La Rue’s chair quits after turnaround plans criticised | De La Rue


The chair of British banknote printer De La Rue has resigned after months of attempts to oust him and criticism of the company’s leadership by one of its largest shareholders.

De Le Rue said on Friday that Kevin Loosemore had resigned as a director, “to draw a line under recent speculation surrounding the leadership of the company”.

Loosemore, a City veteran who was previously the chair of the software company Micro Focus and has served on boards of companies including the building society Nationwide, will step down at the end of April.

De La Rue, which can trace its history back more than 200 years, is responsible for printing about a third of all banknotes in circulation worldwide including the new Charles III design being produced for the Bank of England.

Loosemore’s resignation comes after a difficult few months for the London-listed company, which issued its third profit warning in 12 months on Wednesday after it revealed demand for banknotes was at its lowest in 20 years.

De La Rue has faced months of criticism of its turnaround plans from the activist investor Crystal Amber Fund, which is the third-largest shareholder, with a stake of 9.8%.

banknote
The Charles III design produced by De La Rue for the Bank of England. Photograph: Bank of England/AFP/Getty

The investment fund’s founder, Richard Bernstein, told the Guardian after the announcement of Loosemore’s resignation: “The focus must now be on De La Rue’s recovery. Its strategic value cannot be underestimated.”

Crystal Amber first made attempts to oust Loosemore in late 2022. However, he received the backing of 83% of De La Rue’s investors at a shareholder meeting called last December.

Crystal Amber launched another effort to remove Loosemore on 31 March, and called on the banknote company to take “immediate action”. In a statement to the financial markets, the fund warned that De La Rue’s audit report for the year to March 2023 was “likely to include a material uncertainty going concern qualification”.

It said such a move could damage De La Rue’s attempts to tender for new contracts and retain existing customers and contracts.

De La Rue has blamed the knock to its order books on falling demand for paper money, as consumers opt for card and contactless payments. Its share price has lost half of its value since the start of 2023, and has tumbled by almost two-thirds since last April.

skip past newsletter promotion

De La Rue said its board was launching an “accelerated recruitment process” with an external search company to find Loosemore’s successor. It added that it aimed to appoint a new non-executive chair on 2 May, or as soon as possible after that date.

The company said shareholders would be able to vote on the re-election of any appointee to the board in the usual way at the annual shareholder meeting in July.

Crystal Amber has nominated Pepijn Dinandt, the chief executive of the German automotive supplier Eberspächer Group, to be a candidate for chair. De La Rue said Dinandt, who also has a background in private equity, would be a candidate in the process and had “indicated his willingness to serve”.

De La Rue, which is based in Basingstoke, Hampshire, was originally founded as a print business in Guernsey in 1813.



READ SOURCE