De La Rue Share Discussion Threads

[kaos3] 22/3/2023 08:26

it looks to me I ll buy at 45p once again ....

Iamstu where are you ...dejavu ... a repetition coming ... rock and roll and huge profits

[scepticalinvestor] 22/3/2023 08:20

Oof, bargepole this

[simmsc] 21/3/2023 13:34

The shares have jumped today on "activist investor" hope it appears. And an activist investor becoming (or remaining) vocal is potentially what might save us here. Thank you CA for making your thoughts known and applying pressure to management.

[kooba] 21/3/2023 10:39

Well spotted have taken the liberty to post in full.De La RueThe past is often a reliable indicator of the future. During the period under review, De La Rue delivered its third profit warning of 2022. Since January 2022, the Fund has found it necessary to update De La Rue shareholders on the faltering turnaround plan and offer solutions, which management has repeatedly ignored. De La Rue management chose instead to blame both Crystal Amber, as a long-term significant shareholder and incredibly, in November, its auditor EY, for arriving at the same conclusions as Crystal Amber. The failure of the De La Rue executives and the board as a whole to take responsibility for mistakes and instead blame others is symptomatic of their inability to grasp the nature of De La Rue's predicament.In September 2022, we stated that De La Rue stands out as a case study of how poor leadership is the ultimate destroyer of shareholder returns. In July 2020, De La Rue completed a GBP100 million fundraise which was priced at 110 pence a share. Crystal Amber provided GBP18 million of this funding and at the time was an 18% shareholder in De La Rue. The "honeymoon" period following the fundraise and a buoyant market within its currency division resulted in the share price increasing by 70% and Crystal Amber reduced its shareholding to just under 10%.In early July 2022, the Fund wrote to the Chairman and Chief Executive of De La Rue to request that Crystal Amber, as a near 10% shareholder, be invited to nominate a director in a non-executive capacity. At the end of September 2022, it was disappointing to be informed by De La Rue that it had rejected this request.On page 14 of De La Rue's interim results released in November 2022, a reference was made to a material uncertainty going concern audit qualification. This relates to potential banking covenant breaches. Coming only two years after the GBP100 million equity raise in July 2020, market participants were understandably alarmed, and the share price fell sharply. Immediately following the publication of the interim results, Crystal Amber wrote to the directors of De Le Rue in a personal capacity. In that letter, Crystal Amber highlighted several specific concerns, including the effect on revenues and profits of making 300 staff redundant at the Kenyan print facility and ceasing print operations. The company wrote to deny that this was the case. However, on 20 January 2023, it announced the closure of its Kenyan print facilities. Whilst it said that this was not expected to affect revenues to March 2023, it made no reference to the effect on revenues for the year commencing on 1 April 2023. Revenues from Kenya comprise around 12% of total revenues from the Currency division.De La Rue's current market capitalisation is GBP103 million. Adjusting for the 2020 capital raise would bring this down to GBP3 million. When Kevin Loosemore became Chairman in October 2019, before the GBP100 million fundraise, De La Rue's market capitalisation was GBP205 million. Immediately prior to announcing the 2020 fundraise, De La Rue's market capitalisation was GBP125 million. This is a like-for-like 98% reduction in returns to shareholders.Management has sought to blame factors outside of its control. However, the blunt reality is that it has made operational and strategic mistakes. Margins have shrunk because De La Rue has failed to secure new business in both its Currency and Authentication divisions. Despite savage cost-cutting, margins in both divisions are unacceptable. Driving down costs in an attempt to avoid a fourth profit warning is not a good strategy. It is revenue that matters: removing headcount means that when business is won, orders cannot be fulfilled. Even after significant investment funded by shareholders, the business still fails to generate cash and it is all too evident that the turnaround plan has failed.

[slicethepie] 21/3/2023 07:08

Damning inditement of loosemore failings in the crystal amber rns today.

[kooba] 19/3/2023 14:30

The main issue with currency is that the company has expanded aggressively in polymer note production and now has excess capacity ..they have moved to next gen but the market hasn't it seems.Currency could be somewhat cyclical around covid but there seems no sign of an upturn just yet or big move to polymer that the company bet on.Authentication which was meant to be the high growth arm has seen growth stall and margins contract sharply. Again no real evidence that a corner has been turned there either.There may be a perfect storm at the moment across the businesses that the company can navigate ..but unfortunately the persistent poor trading updates against the £100m financed 3 year plan means the current management are already being questioned and their promises of it all being sorted in just a few more years looks untenable. Vacher was appointed Oct 2019 as a turnaround specialist the money was raised in June 2020..so the 3 years is up and just saying a few more years is not what was promised.The real issue on new contracts is in the accountsWorries about currency contracts prompted auditor EY to set out a "severe but plausible downside scenario" in which De La Rue breached its debt covenant. "Therefore, there is a material uncertainty that may cast significant doubt on the group's ability to continue as a going concern," the firm said.https://www.investorschronicle.co.uk/news/2022/11/23/de-la-rue-downgrades-forecasts-again/This is not what you want sitting in your accounts when looking for new or repeat contracts.The irony in the £100m fundraise was that"The package relieves the dire financial situation for the company and would mean it no longer carries a "going concern" warning from its auditors."Now a few years later we are in the same position and now have a market cap of only £108m..valuing the pre new money business that once commanded a Ftse 100 position at £8m.There has been some serial poor management here and no sign yet that anyone is fashioning a sustainable business out of it.

[pugugly] 19/3/2023 12:08

Bank notes now usually only used by the elderly who do not trust digital banking and (imo) very wise as at serious risk of going pear shaped if you get only one letter or digit wrong OR the black economy (builders fiver! now £50 ++)

DLR's bank note commodity are is in serial decline in virtually every country - Management appear to have failed to recognize this - Still trying to sell buggy whips when the world no longer uses horse drawn buggies - Apart from the Amish or the Russian Army!!

[my retirement fund] 19/3/2023 10:35

I think everyone has been frustrated as Vacher has ruthlessly held on to his job and salary and practically driven the company to insolvency and wasted and destroyed the entire value of the company in an industrial scale manner.

[slicethepie] 19/3/2023 10:10

The problem with dlar is it is still being operated like the big company it once was, you only have to look at the opulent headquarters to see. Loosemore has the wrong skills to run a company that needs to watch every penny. We need a ruthless turnaround specialist to salvage what is left. CA must be very frustrated as they have seen the value destroyed by incompetent management over the last 5 years.

[kooba] 18/3/2023 20:34

Yep I found it and I read it as it goes..was pointing out that to get sovereign contracts you need stable finances to get any long term contracts you need stable finances ..the auditor warning is not a help in the markets in which they operate where they rather want to know you'll be around in a few years.

[jensen10] 18/3/2023 14:21

It appears all 4 shortlisted companies were subsequently disqualified.....similar reasons to DLAR.

[kooba] 18/3/2023 13:58

One has to hope that the material uncertainty going concern audit opinion in the accounts doesn't put anyone off giving them major long term contracts...i guess some sovereigns might be a bit concerned at that qualification! Struggling to remember when they last surprised on the upside , 3 profit warnings and business losses seem predominant.Whilst this contract tender below looks messy it does show potential issues for the company I guess.https://www.thecitizen.co.tz/tanzania/news/business/bot-ordered-to-refloat-sh822-billion-tender-award-for-banknotes-reprint-4108584"The BoT Tender Board informed Ms De La Rue that it had not been shortlisted due to its failure to meet the financial capability commitment required."

[simmsc] 18/3/2023 13:41

The problem (or beauty) with this company is that it can suddenly, out of the blue, announce a big long term contract win and we are back above 100p. And it has a tendency to do this just when you think it's all over. With the low share price, pressure from CA and other shareholders and all this spare capacity they will be pricing aggressively no doubt to get deals done.

[castleford tiger] 18/3/2023 12:54

looking like a death spiral now.

what price was the last fundraising?

[jensen10] 18/3/2023 12:14

Looks like 1.2mm shares sold in the closing auction. Decent volume for a change but all at the close before the weekend and a big discount to price traded in session.

[dealy] 18/3/2023 10:08

Fire Sale of small caps this week. Hedge funds lost money all over the place (bonds, banks) so dumping smaller holdings.

[financialfred] 16/3/2023 20:16

Vacher and Co have wasted £100M equity investment. All those people made redundant and cost savings for nothing. Price will drop closer to annual results. Yet idiots will still buy their shares...

[gargoyle2] 16/3/2023 14:50

A new milti-year low here -- how much value has Vacher p*ssed away here over the last three years?

[my retirement fund] 03/3/2023 12:52

Looks like JP Morgan have acquired an option for 4.6% of the share capital. Hmmmm ???

[kooba] 27/2/2023 18:53

Well there is a bit of volume..about 4.6% holding through the market.Fund to fund internal movement or a change of ownership ? Only a few holders have 4.6% or more.We should see an rns if a change of owner.

[gargoyle2] 22/2/2023 13:26

My heart jumped at the sight of a 'Director shareholding' RNS today -- Vacher buying at last? Putting some of hos own money, and a show of faith, into good old DLAR? But no, just a few more free options for him.

[blanketstacker] 04/2/2023 09:07

Thanks kooba for 2 Feb 15:19 post. A considered and thoughtful post. CRS want this broken up to release value. I agree.