De La Rue: A Tale of Innovation, Challenges, and Potential Sale

De La Rue, a company with roots dating back to the 18th century, has a rich history of innovation and adaptation. Founded by Thomas De La Rue, the company initially focused on producing playing cards before expanding into a wide range of printing services, including railway tickets, security printing, and banknotes. However, a lack of focus and outdated technology led to financial struggles in the early 20th century.

A turning point came when De La Rue secured lucrative contracts in China in the 1930s, enabling the company to re-focus and diversify its offerings. By the 1990s, De La Rue had established itself as a leader in payment systems, banknote printing, and security printing. However, challenges emerged in the late 1990s, with the loss of key contracts and a decline in market value.

In recent years, De La Rue has faced significant setbacks, including the loss of the contract to print British passports post-Brexit and multiple profit warnings. Activist investor Crystal Amber stepped in, pushing for changes in management and strategy. The appointment of turnaround specialist Clive Vacher as CEO marked a new chapter for the company, but the impact of Covid-19 and supply chain disruptions further compounded its challenges.

As pressure mounted, De La Rue announced the conditional sale of its authentication division to Crane NXT for £300mn, aiming to reduce debt and pension deficits. Talks of a potential bid for the remaining business have sparked interest among investors. Crystal Amber, one of the largest shareholders, has played a significant role in shaping De La Rue’s future.

The company’s journey reflects the cyclical nature of business, with periods of growth, decline, and restructuring. The potential sale of De La Rue raises questions about its future as a banknote printer in a competitive market. The outcome of the bid will determine the company’s trajectory and its presence on the London Stock Exchange.

In conclusion, De La Rue’s story is a testament to the importance of effective management and strategic decision-making in navigating challenges and seizing opportunities. The company’s fate serves as a reminder that in the dynamic landscape of business, adaptation and innovation are key to long-term success.