De La Rue revamps passports arm after losing out to French
Banknotes printer De La Rue is shaking up its passports division after losing out on the £500 million tender to make the new, blue British passport.
The 197-year-old company, which controversially lost the contract to French firm Gemalto, will focus on selling off-the-shelf security features to countries who print their own passports.
This will be instead of so-called “solutions”, which are computer systems used to manage ID information.
Chief executive Martin Sutherland said: “We want to focus the growth in the identity business on the supply of those security features.
“These are clever bits of materials science which make sure documents are difficult to counterfeit.
“The catalyst was the UK decision to take the contract elsewhere. It gave us a chance to pause and reflect and think about where the business will get the best growth moving forward.”
De La Rue has around 1000 patents for security features, which are more lucrative to sell than solutions.
Sutherland said he would cut costs and pour the savings into the new plan although no decisions has been made on where the cuts will fall.
The company, which has come under fire from activist Crystal Amber, has had a difficult year following a profit warning in March.
Sutherland, who flagged a review this year, will also focus on bolt-on acquisitions and product authentication to get its shares out of a hole. They are down by a third this year.
Half-year adjusted operating profits at the company, which prints the polymer ten and twenty pound notes, slid 36% to £17 million due to a different mix in the contracts.
Sutherland said there was a skew in profits towards the second half, but all orders were booked and full-year profits would be in line with estimates.
“I’m not overly concerned about where it is at the half year,” he said.
