De La Rue chairman told to quit: Latest profit warning from big investor brands is a ‘Liz Truss moment’ for ticket boss
The De La Rue boss is under increasing pressure to step down after his company’s disastrous latest update was called a ‘Liz Truss moment’ by a top shareholder.
In another setback for long-suffering investors, shares of the 201-year-old banknote printer fell 23% after issuing its third profit warning of the year.
De La Rue – which makes banknotes for countries around the world but lost the contract to print UK passports post-Brexit four years ago and is laying off staff to save money – warned that she could even go bankrupt.
Under fire: De La Rue shares have lost 50% of their value this year and 60% since Kevin Loosemore (pictured) took over as chairman in October 2019
Shares have lost 50% of their value this year and 60% since Kevin Loosemore took over as chairman in October 2019.
The update fueled tensions between De La Rue and activist investor Crystal Amber – his second largest shareholder with a 9.9% stake – who called on Loosemore to step down and pushed to appoint a representative to the board.
Crystal Amber stepped up her campaign yesterday, with founder Richard Bernstein describing the latest profit warning as a ‘Liz Truss moment’ for Loosemore – referring to the former Prime Minister’s short and troubled tenure, who resigned just after seven weeks.
Calling on the company to launch a strategic review, including a potential sale, Bernstein told the Mail: “This is the third profit warning in 2022 for De La Rue.
There’s nothing in today’s update that says why there won’t be a fourth in the spring.
‘Making staff redundant is not a strategy – it is a tragedy. De La Rue was a big company, but it is outclassed by its competitors.
Rather than accepting responsibility, the president blames everyone – including us as shareholders – for being a distraction from voicing our legitimate concerns.
“It’s not about Loosemore’s survival as president. It’s about De La Rue’s long-term survival. Kevin Loosemore needs to accept his responsibilities and get out of town now.
Slump: De La Rue makes banknotes for countries around the world but lost post-Brexit UK passport printing contract four years ago and is laying off staff
Bernstein’s comments were the latest salvo in an ongoing battle between his company and De La Rue.
Earlier this year, Loosemore accused Bernstein of suggesting “market manipulation” tactics when the investor said he wanted to come up with a strategy that could help rebuild De La Rue’s share price. Bernstein fired back, claiming Loosemore’s comments were defamatory.
Behind closed doors, Bernstein suggested that Loosemore consider quitting. In an unusual move, De La Rue called a shareholder vote – due to take place next Friday – on the chairman’s future, apparently in a bid to prove they had the backing of most investors.
But after yesterday’s profit warning, shareholders may be a bit more reluctant to weigh in on Loosemore.
De La Rue reported a 46.6% drop in profit for the six months to September 24 to £9.3million as it grappled with soaring costs and a slowdown in currency orders.
With first-half revenue down 8.3% to £164.3m, the company said annual profits could now be as low as £30m, or around £6m from less than analysts’ forecasts.
And it raised further concerns with a warning that in a “serious but plausible” scenario, he could go bankrupt.
De La Rue has had four torturous years since losing the lucrative post-Brexit UK passport printing contract in 2018. In May, he crashed off the FTSE 250 index.