De La Rue Share Discussion Threads

[masurenguy] 28/11/2022 09:17

Vote for boss of De La Rue Kevin Loosemore, proxy shareholders recommend

The chairman of De La Rue has received backing from three key proxy shareholder agencies before this week’s investors’ vote to remove him from the banknote printer’s board. ISS, Glass Lewis and Pirc have recommended re-electing Kevin Loosemore, 63, on Friday. De La Rue’s other large shareholders include Schroders, Royal London and the Wellcome Trust.

ISS concluded that, “given lack of a detailed rationale from the dissident and the remaining eight months to the company’s AGM, where the entire board would be up for renewal, a vote for chairman Loosemore is warranted at this time”. Glass Lewis said it believed Crystal Amber “has not provided a sufficient quantitative case to suggest that its solutions would be a clear improvement upon the status quo” and said Crystal Amber’s case was “particularly thin”. Pirc said: “The serious concerns that would lead to otherwise ask the chair to resign have not been made publicly available at this time.”

Complete Article:

[gargoyle2] 25/11/2022 08:57

Re shareholdings, Loosemore bought £1 million worth in the June 2020 fundraise at 110p, Vacher a measly £150k. Both are obviously showing a loss on their investment so far, but no buying since then. I'm sure Vacher has nil-paid options coming out of his ears though.

[kaos3] 25/11/2022 08:29

I am glad the CA vibe is finally catching up -

for the long term good of DLAR, its employees, its customers, shareholders ...

[1choip] 25/11/2022 08:17

are there any directors own any shares?

[gargoyle2] 24/11/2022 21:21

Not impressed with Vacher at the H1 results. 'The turnaround plan saved the company'. Actually it was £100 million in cash that saved the company -- and it's now worth about £60 million.

And his answer to one of the Q&A questions about why management haven't bought any shares since the fundraise was pathetically standard. All the directors have different personal circumstances, bla bla. If a director's personal circumstances include a base salary of nealy half a million quid a year, I'd expect him to show a little more faith in his company.

Both Loosemore and Vacher need to go imo.

[newbold120] 24/11/2022 21:07

But whilst Crystal Amber slates Kevin, had Kevin not persuaded all of the instis to pony up £100m for the fundraising in July 2020 the company would have probably had a debt to equity swap and be owned by the banks, and Crystal would have lost all their money!

[newbold120] 24/11/2022 21:01

Bad business or bad management?

[kooba] 24/11/2022 12:47

Go back 12 years and the then management were saying no to a takeover because it grossly undervalued the company...at 905p..unfortunately there has been serial mismanagement for a decade that has left the business a shadow of its former self..it appears this is ongoing.https://www.theguardian.com/business/2010/dec/12/foreign-money-bids-for-de-la-rue

[wbodger] 24/11/2022 12:37

Thanks kooba for posting that. Jeez. That's a pretty thorough kicking, no? I hope it's not behind the wall, it deserves to be seen by everyone.

Why do they not try to listen to critics instead of shooting the messenger? Anyway a change looks inevitable now even if Loosemore survives next week (and he probably will).

[farrugia] 24/11/2022 11:45

The only people who seem to be making money here are the directors and Crystal Amber are right to be upset. They had 5 years to turn the ship round, and what do we really have here today? To see the extent of equity destruction here just go back 5 years.

[boll] 24/11/2022 09:31

There are quite a few audit going concern flags appearing in companies accounts these days for reasons that aren't slways that clear particularly around smaller and medium sized quoted companies. I would have thought tt if there were potential issues the banks wouldn't have agreed the loan changes. The ones I have seen are in the hospitality sector where its a going concern covid risk so essentially warns of the impact on finances should another lockdown occur. In DLARS case the 12 month order book has risen from £163m to £177m since end of March 2022 so I can't work out why the March annual accounts didn't contain a similar warning. Perhaps the auditors should be asked why they didn't have the same qualification at end of March.

[jensen10] 24/11/2022 08:01

Sorry and a spat with auditors to boot

[jensen10] 24/11/2022 07:59

I was willing to give the company the benefit of doubt and the way they managed expectations re the CA dispute gave hope that the company was on track. Well a 3rd profit warning, poor near term outlook and more jam tomorrow promised. There is no margin or sales expansion despite the aggressive cost costs. Why has it taken 2 years to identify a more sales driven 3xec for the authentication business - the one area with good growth potential? I will now be voting for the chair to be removed as deadline 28th November. What do others think?

[kooba] 24/11/2022 07:37

The TimesPlenty of companies get into fights with activist investors, but how many throw in a punch-up with the auditors? That's the novel approach from De La Rue: an outfit whose licence to print money has long been lost on its skint shareholders.You know what? All Clive Vacher's bleating about the dastardly number-crunchers from EY might have even been persuasive if it hadn't been for one thing: the banknote printer's boss lobbing in its third profit warning this year.Yes, Vacher objects to EY slapping a "material uncertainty related to going concern" badge on the half-year figures: one reason the shares dived 23 per cent to 77p, valuing the once FTSE-100 group at only £150 million. He says the "board and the management strongly disagree" with EY's assessment, arguing it's produced a worst-case "scenario that is neither plausible or realistic". Maybe he has a point, too, that De La Rue's banks have just allowed it to extend its debt facilities without raising similar concerns.Yet, the covenant in question is the "ebit/net interest" variety. And, while Vacher may moan about EY's "overabundance of caution", who wouldn't take that sort of stance?Forecast earnings before interest and tax, also known as operating profits, keep going down. By contrast, both interest rates and net debt - up from £71.4 million to £86.5 million year on year - keep going up. Vacher is guiding to adjusted full-year operating profits of as little as £30 million versus market estimates of £36 million. Rewind a year and Numis analysts were forecasting £56.5 million: a figure cut to £41.4 million after January's profits alert, £35.6 million after May's and now to £30.1 million. Why wouldn't EY be cautious?Vacher's not had the easiest gig. Taking charge in October 2019, he inherited a business poleaxed by the reign of predecessor Martin "blue passports" Sutherland. A month earlier, a new chairman had arrived: Kevin Loosemore, the former Micro Focus boss whose "click and repeat" $8.8 billion Hewlett Packard assets buy blew up badly. By November 2019, it was Loosemore warning over De La Rue's "ability to continue as a going concern".Then came Covid, forcing the duo into June 2020's £100 million equity raise at 110p. And Vacher, who says he's "saved" the business, insists that there's been improvement since: a revamp that's included getting out of a pricey paper-supply deal with Portals Paper at a cost of £19.3 million. He's also promising free cashflow next year, while arguing, rather conveniently, that he should be judged on the share price when he'd "exposed all the problems", May 2020's 37p, not the near-190p where he came in. Even so, you see why activist Crystal Amber, with almost 10 per cent, is trying to oust Loosemore at December 2's extraordinary general meeting. Here is a group that makes its latest profits alert bullet point No 16 of 16 first-half "highlights". A business, too, that reports a 47 per cent operating profit drop to £9.3 million and then picks a fight with its auditors. Yes, Loosemore was re-elected with 97.8 per cent of the vote at July's annual meeting and may well see off Crystal Amber. But the activist's Richard Bernstein complains of a "management not taking responsibility", adding: "You can kid some of the people some of the time . . .". The board is running out of time to prove him wrong.https://www.thetimes.co.uk/article/de-la-rue-attacks-auditor-over-going-concern-warning-x8prcsf77

[financialfred] 24/11/2022 06:20

Well the board got humiliated in the Q&A session by crystal amber. Crystal amber know the 2nd polymer line gathering dust in the Westhoughton plant and Kenyan staff in currency section being made redundant. Invest for a takeover or sale

[kinwah] 24/11/2022 04:24

MRF, I don't deny people will want cash for budgeting but we are at an unusual juncture. Governments are going from QE to quantitative tightening and printing less cash. Also as interest rates go from almost nothing to a few percent, cash lying around at home can be paid into the bank and earn interest or pay off debt. My best guess is there will a short term surge in demand for banknotes which isn't sustained and orders at DLAR then dry up as monetary conditions tighten. I can understand why EY may be cautious beyond the short term.

[masurenguy] 24/11/2022 01:21

De La Rue attacks auditor over ‘going concern’ warning

The chief executive of De La Rue has attacked his company’s external auditor, accusing EY of exhibiting an “overabundance of caution” in warning about its future as a going concern. In De La Rue’s half-year results, EY flagged a “severe but plausible downside scenario” under which, if key currency contracts are not won or fall outside the going concern period, and the company “is not able to secure alternative contracts, without sufficient and timely cost mitigation”, it would breach a covenant on its revolving credit facility. EY, one of the Big Four auditors, said it indicated that a “material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern”.

Clive Vacher who said his turnaround efforts had “saved” the company, said De La Rue’s “board and the management strongly disagree with the assessment of EY”, formerly known as Ernst and Young. Vacher, 52, said it was “based on analysis that is neither plausible nor realistic and done with an overabundance of caution from Ernst and Young”. He said that the company’s banks had signed an extension to its credit facilities within the past week “without expressing any concern about the covenant levels, in fact, they’ve stayed the same".

Complete article:

[david gruen] 23/11/2022 14:24

Yes, that's my point, it HAS to break 70p so don't jump in too soon.

[darryn1] 23/11/2022 14:11

Except it hasn't broken 70p and it is now up nearly 10% on this mornings low of 75p.

[masurenguy] 23/11/2022 12:51

DLAR is a sitting duck for an overseas predator. The only questions are, who, when and how much !

[yieldmonkey] 23/11/2022 10:15

Alas a qualified auditors is always a massive red flag for me so I am out with a hit.

No doubt the lending group will be meeting with management wanting to know how the group is going to stay clear of its covenants - pushing for equity issue, disposals etc.

I am surprised an overseas buyer has not snapped them up - chicken feed really - not doubt this will be announced 10 mins after I have sold!

[my retirement fund] 23/11/2022 10:02

I just get the feeling there was call option longs on better than expected which have suddenly been rendered worthless for such an immediate drop. Its a well known fact central banks across the western world are seeing an increased demand for cash as people begin to turn to cash for personal budgeting as they get cost of living squeezed. Next year should be fairly buoyant for them.

[gargoyle2] 23/11/2022 10:00

DLAR management meeting with Crystal Amber this afternoon, according to Vacher's answer to one of the questions on the results webcast.