De La Rue Share Discussion Threads

[dealy] 06/4/2023 09:41

The share price performance of this company matches that of hundreds of other small / mid caps in growth tech. The problem lies with the fact that the investment community has become a forced seller of such stocks. No buyers coupled with a bit of selling equals very low share prices

[orkneyarab] 06/4/2023 07:41

Morning Mr happy, I see you're spreading the love again this morning. Any fake short placed on this one?

[terminator101] 06/4/2023 07:33

They say there's no such thing as bad publicity. They also say that those that say that are totally wrong. Got a long way to fall yet.

[kooba] 06/4/2023 07:01

Seems the situation is getting some attention , covered in a few publicationshttps://www.cityam.com/de-la-rue-faces-shareholder-revolt-as-fund-calls-for-chair-to-go-over-failed-turnaround-plan/https://www.thetimes.co.uk/article/de-la-rue-failing-on-every-measure-warns-activist-q368lnv2dhttps://www.proactiveinvestors.co.uk/companies/news/1011358/de-la-rue-faces-renewed-call-for-change-from-activist-fund-1011358.htmlThe board refused CRS board representation a while back , I'm wondering if they regret that now? I'm sure the board will come out fighting and lets hope they have some positive news on trading or alleviating the qualification on their accounts..but likely will just blame external factors and the pesky shareholder that is impacting on the value! Unfortunately i don't think that will be enough anymore , the evidence of failure is clear with a series of profit warnings and their auditors risk warning on the accounts , the shares are reflecting this failure not a shareholder trying to avert further value destruction.

[kooba] 05/4/2023 21:38

Doubt it , but I hope the management wake up to their failings and acknowledge accountability and not further defect to external factors , a change at the top is required and a new plan to safeguard remaining value put forward urgently. As things stand a FSP might be appropriate !!

[kooba] 05/4/2023 21:26

Well the gauntlet is down and I think CRS make some very valid points on delivering on the 3 year plan ..it seems focused on strategy and accountability failings and factually points out that the company has seemingly "lost" the £100m raised in 2020 into the black hole that is DLAR , debt is back to where it was , there is a qualification on the accounts and the business is shrinking ..back to 3 years ago. What is not mentioned so much is that previous sector leader has shed many employees in the process cutting costs whilst investing in Polymer where demand is not really picking up and they have lost pricing power across both divisions from being a leader they are struggling to maintain market share and margins ....attributed to Napoleon"When you notice that an enemy is making an error, take care not to interfere with the enemy from completing it so you can take advantage at the right time"I think their competitors are enjoying seeing the demise of this sector leader and their strategic efforts and are happy to let this once great company's decline continue..there is still strategic value in both businesses but it is decreasing as the company's financial position deteriorates. The 3 year plan has failed and another 3 years of the same is not the answer.

[financialfred] 05/4/2023 20:50

Thanks Kooba, think de la rue are sunk sell up your shares while you can.

[castleford tiger] 05/4/2023 09:22

2 and half years salary!

[kooba] 05/4/2023 08:43

On the London Stock Exchange, the term 'small cap' refers to companies with a market capitalisation between £50m and £230m. Small-Cap Chair & Non-Executive Director RemunerationAccording to Alvarez & Marshal Chairs serving on FTSE SmallCap companies earned an average of £143,500. For Chairs for lower quartile businesses £119,500 and upper quartile businesses £173,300.De La Rue £96.24 million Market capitalisationNow less than the money raised June 2020! So whilst Chairs renumeration generally has jumped over the past few years the Chairs renumeration here appears toppy relative to the reducing valuation.On the flip the Chair did put some money in on that fundraise so is underwater along with all other shareholders 06/07/2020 Kevin Loosemore 917,840 @ 110.00p £1,009,624.00 PlacingSo that is £500k down his leg!!

[slicethepie] 05/4/2023 07:29

Loosemore is paid £200k as chairman –wow for a £100m mkt cap company!

[kooba] 05/4/2023 07:18

REACH5 April 2023CRYSTAL AMBER FUND LIMITED("Crystal Amber", the "Company", or the "Fund")Letter to be sent to De La Rue plc shareholders with Notice of requisitioned General MeetingOn 31 March 2023 the Fund announced that it had sent to the board of De La Rue plc ("De La Rue") a requisition notice requiring De La Rue to convene a general meeting at which a resolution will be proposed to remove Non-Executive Director and Chairman Kevin Loosemore ("the Requisition"). The Requisition also proposed to appoint Pepyn Dinandt as a Non-Executive Director and Chairman. Crystal Amber advises that it has provided De La Rue with the text of a letter which Crystal Amber has requested is included with the notice of general meeting when it is posted to shareholders by De La Rue in due course. The text of the letter to all the shareholders of De La Rue is set out below and can be viewed on the Fund's website at: https://crystalamber.com/news." CRYSTAL AMBER FUND LIMITED("Crystal Amber", the "Company", or "Fund")Statement regarding De La Rue plc ("DLR")Failed Turnaround Plan, major governance and stewardship concerns and chronic share price underperformance at DLR requires replacing Chairman.Dear Fellow Shareholder,On 30(th) March 2023, Crystal Amber sent to the board of DLR a requisition notice requiring DLR to convene a general meeting at which a resolution will be proposed to remove Non-Executive Director and Chairman Kevin Loosemore ("the Requisition"). The Requisition also proposes to appoint Pepyn Dinandt as a Non-Executive Director and Chairman.Why this is essential?THE TURNAROUND PLAN HAS FAILED BY EVERY MEASUREIn February 2020, DLR announced a three-year Turnaround Plan. In the summer of 2020, it raised GBP100 million via an equity issue at 110p a share. Crystal Amber was the lead investor, providing GBP18 million of rescue capital to support the Turnaround Plan. At the time, the directors stated that by the end of Turnaround Plan in March 2023, they were targeting: 1. annual revenue growth of 9% (from GBP350 million to GBP453 million). 2. mid-teens and growing operating margins. 3. Authentication revenues of GBP100 million by FY21/22, with strong operating margins. 4. positive free cash flows capable of supporting sustainable cash dividends. 5. a net debt/EBITDA ratio of below one. 6. balance sheet strength with a long-term gearing policy of below one times net debt/EBITDA The reality is: (based on current market consensus estimates for the year to March 2023) revenue will be GBP340.5 million, falling 25% below forecast. Operating margins will be 8.9%. Authentication revenues for FY21/22 were GBP90 million. H1 operating margins for Authentication of 10.8% compared to 15.8% for FY19/20.Negative free cash flow. No dividends. Net debt/EBITDA margin of 1.7. Net debt/EBITDA of two times. Net debt is forecast at GBP103.3 million. This is GBP0.5 million higher than three years ago, before the GBP100 million equity capital injection.DLR's stock market value is now GBP100 million, after the GBP100 million equity investment, so on a like for like basis, the entire GBP125 million pre-money stock market valuation has been destroyed.Since March 2021, DLR's share price is down by 75%.STEWARDSHIP FAILINGS RESULTING IN MATERIAL UNCERTAINTY GOING CONCERN AUDIT QUALIFICATIONThe company's failure to renegotiate its banking covenants when renewing its banking facilities following discussions to pay Portals GBP20 million to exit its paper commitments, represents in our opinion a gross failing of stewardship. Consequently, DLR is still incurring substantial additional and avoidable costs. This culminated in November 2022 with a material uncertainty going concern audit qualification. The company's Finance Director has since resigned.GOVERNANCE FAILINGS DEPRIVING SHAREHOLDERS OF UP TO GBP10 MILLION CASH PROCEEDS FROM SELLING THE HIGH SECURITY PRINT BUSINESSIn the Turnaround Plan, DLR trumpeted being "the only major high-security printer in sub-Saharan Africa within the cheques and cards market." Last December, Crystal Amber wrote to the directors of DLR highlighting the inevitable effect on revenues and profits of its decision to make 300 staff redundant at its Kenyan print facility and cease print operations. Annual revenues were around GBP30 million and profits approximately GBP3 million. DLR wrote to Crystal Amber to deny any intention to cease its Kenyan operations. On 20 January 2023, DLR announced the closure of its Kenyan print facilities.Aside from the detrimental effect on future revenues and profits, DLR's management chose to close a profitable division rather than undertaking a sales process. We understand that a disposal could have realised cash proceeds of up to GBP10 million, helping to reduce debt. Closure has also adversely impacted commercial opportunities in this long-established region.EXCESSIVE COSTS PAID TO PROFESSIONAL ADVISERSCrystal Amber understands that the Chairman is failing to control fees paid to professional advisers including but not limited to Rothschild & Co., Slaughter & May and Brunswick PR. Crystal Amber asks the board to provide shareholders with a breakdown of these material costs.STATEMENTS TO MARKET PARTICIPANTSThe interim results presentation in November 2022 referred to the company's second polymer line at Westhoughton being "fully operational." The company failed to disclose that this line has been mothballed because there are no orders requiring fulfilment. This follows GBP20 million of capital investment.CHAIRMAN'S FAILURE TO TAKE RESPONSIBILITY AND PROTECT SHAREHOLDERS' INTERESTSDespite as set out above and in our opinion the overwhelming evidence that the board and the Executives have failed to deliver, Chairman Kevin Loosemore continues to fail to take responsibility. Instead, he blames external factors, including "the cycle." The Chairman has failed to hold management to account and protect shareholders' interests. By contrast, Crystal Amber understands that competitors including Oberthur, G&D, Crane NXT and SICPA are trading well.URGENT CHANGE REQUIREDAn immediate change of leadership is essential. Crystal Amber has concluded that it is necessary to replace Non-Executive Director and Chairman Kevin Loosemore. Crystal Amber believes that Pepyn Dinandt should replace Kevin Loosemore as Non-Executive Director and Chairman.Pepyn Dinandt has a long and successful track record in building businesses by delivering on value creation programs and securing exits. He is currently Chief Executive of the Climate Control Systems and Automotive Controls division at the Eberspaecher Group, a large family-owned Tier 1 automotive supplier. By the end of 2023, this global division is forecast to have approximately EUR900 million revenues and 3,500 employees.Commenting, Pepyn Dinandt said: "The last two years have been a disappointing and costly one for a once proud, great British company. The buck stops with the leadership. I believe that if we act quickly, with focus and operational execution, DLR can recover and thrive. It is now for DLR's long-suffering shareholders to decide if they wish to condone this woeful record or seek to end this spiral of destruction of shareholder value."CRYSTAL AMBER URGES SHAREHOLDERS TO VOTE IN FAVOUR OF RESOLUTION 1 TO REMOVE KEVIN LOOSEMORE AS A DIRECTOR.CRYSTAL AMBER URGES SHAREHOLDERS TO VOTE IN FAVOUR OF RESOLUTION 2 TO ELECT PEPYN DINANDT AS A DIRECTOR.Yours faithfully,Chris WaldronChairman

[blanketstacker] 01/4/2023 08:08

Nice summary kooba. Management have failed, and must go. They have requested another three years! Unfortunately I just cannot see CRS getting enough backing. Perhaps time to move on, before another fundraising?

[kooba] 01/4/2023 05:50

The company historically makes a trading statement early mid April covering year end 31st March. They have not announced a date yet but would be surprised if one wasn't put out. CRS latest move may change their thoughts ..they are obviously working on ways to shore up financeshttps://news.sky.com/story/de-la-rue-seeks-pension-deferral-as-banknote-printers-woes-continue-12824413But it's likely they will have to come clean on the finals before any GM can be held.They can take max 21 days to call a GM and a further 28 days to hold one , their defence of the Chair cannot ignore the company's poor trading record or failure of the 3 year plan or the precarious financial position the company again finds itself in.I think CRS having been instrumental in ousting the last disastrous management and being a cornerstone to the £100m fundraise May 2020 to repair balance sheet and push through the 3 year plan can't believe where the company finds itself. The board needs to accept responsibility for its strategic failure.

[jensen10] 31/3/2023 17:50

Smart move by CA. Forces board to pre announce early as they may have been waiting until May. If CA thesis is right then Loosemore position is untenable and change happens. Shares probably pop higher. If results surprise and rebut CA thesis the shares also pop higher. End game close

[terminator101] 31/3/2023 12:24

Seems the overvalued fluff just keeps falling huh

[cromw3ll] 31/3/2023 12:01

wow looking back over the long term chart and the share price is nearing all time lows. Something seriously has to change in management!

[kooba] 31/3/2023 11:43

Share price reaction on low volume not great i'm sure the board will cite the "destabilising"impact of one shareholder.Unfortunately the shares are down 75% over 2 years..52% over 1 year and 36% year to date..i think that is rather down to them and not a shareholder complaining about them!The ftse all share up about 8% over 2 years and flat over 1 and ytd but still the relative perforce over 2 years is even worse with over 80% underperformance of relative index. How is the plan going??

[kooba] 31/3/2023 09:53

The company has a trading update coming up next week or so as today is their year end. I imagine once again this has been requisition has been lodged for a reason..maybe CRS analysis has shown they are struggling to make the already reduced 3 times numbers.The bigger concern though is around the banking covenants i guess with a material uncertainty in the interims this will likely fall onto the finals as well which could impact getting new or repeat business which could see a further deterioration in trading so i guess CRS is trying to get ahead of it. Previously Loosemore has managed to convince institutions things are well ..unfortunately Kenya appears a major hurdle to him being able to convince that the board is either on top of the business or being straight in answering shareholder questions. I seem to remember CRS raised Kenya issues back at the AGM and the last challenge in the Autumn..and was dismissed by the company ..only to be proved 100% right in January it seems. If Institutional trust has been tested and it should have been and it appears there is not enough non-executive challenge from the top in the executives meeting the strategic goals clearly set out to shareholders when they were asked to fund the 3 year plan ( now 3 years ago!) then hopefully some might wake up to prevent the slow motion car crash that the company is on course for.

[castleford tiger] 31/3/2023 07:48

something does need doing for sure.

tiger

[kooba] 31/3/2023 07:04

Here we go again31 March 2023CRYSTAL AMBER FUND LIMITED("Crystal Amber", the "Company", or the "Fund")Crystal Amber Fund Limited requisitions general meeting at De La Rue plc to replace Chairman and appoint a new director as ChairmanCrystal Amber, the activist investment fund, announces that it has sent to the board of De La Rue plc ("De La Rue") a requisition notice requiring De La Rue to convene a general meeting at which a resolution will be proposed to remove Non-Executive Director and Chairman Kevin Loosemore ("the Requisition"). The Requisition also proposes to appoint Pepyn Dinandt as a Non-Executive Director and Chairman. Details relating to Pepyn Dinandt are set out below in Appendix 1.Background and reasons for the Requisition:1. Since 2018, Crystal Amber has been a shareholder in De La Rue. Crystal Amber currently holds approximately 9.8% of the total issued share capital of De La Rue.2. Crystal Amber notes that De La Rue's current market capitalisation is GBP103 million. This is after the July 2020 equity fundraise of GBP100 million, meaning that since July 2020, the like-for-like valuation of the business has fallen to GBP3 million. Prior to the fundraise, the market capitalisation was GBP125 million.3. Crystal Amber notes that 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.4. Crystal Amber notes that in December 2022, it 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 directors of De La Rue wrote to Crystal Amber to deny this. However, on 20 January 2023, De La Rue announced the closure of its Kenyan print facilities. Whilst the announcement said that this closure was not expected to affect revenues to 31 March 2023, it made no reference to the effect on revenues for the year commencing on 1 April 2023. Prior to the closure of the Kenyan print facilities, the revenue from Kenya comprised around 12% of total revenues from the Currency division of De La Rue.5. Crystal Amber notes that in the period to 26 March 2022, after the GBP36 million cost cutting, De La Rue's pre-tax profits from continuing operations were GBP24.2 million. The current market consensus estimate for the year to 31 March 2023 for De La Rue is for pre-tax profits of GBP22 million.6. Crystal Amber believes that unless it takes immediate action, De La Rue's audit report for the year to March 2023 is likely to include a material uncertainty going concern qualification. This could have an adverse impact on De La Rue, not only as regards tendering for new contracts but importantly for retaining existing customers and contracts.7. Crystal Amber believes that an immediate change of leadership is required. Therefore, it has concluded that it is necessary to replace Non-Executive Director and Chairman Kevin Loosemore. Crystal Amber believes that Pepyn Dinandt should replace Kevin Loosemore as Non-Executive Director and Chairman. Further details relating to Pepyn Dinandt are set out below in Appendix 1.8. Crystal Amber notes that De La Rue has a rich history and long-established reputation within banknote printing. With a broad range of central bank customers, it is naturally placed to lead industry growth, given the right strategy and operational execution. This Requisition seeks to honour these characteristics and the strategic value they give to De La Rue and to protect them for De la Rue's shareholders and stakeholders.Appendix 1Pepyn Dinandt has spent almost 20 years working on behalf of and with private equity firms including KKR, Apollo and Towerbrook. He has a long and successful track record in building businesses by delivering on value creation programs and securing exits. He is currently Chief Executive of the Climate Control Systems and Automotive Controls division at the Eberspaecher Group, a very large family-owned Tier 1 automotive supplier. By the end of 2023, this global division is forecast to have approximately EUR900 million revenues and 3,500 employees.

[lefrene] 25/3/2023 20:00

dealy it's been building since 2008 when QE and low interest rates fostered the zombie company model. The NY Repo Market crash of 17-9-19 was the next signal for massive QE ($6.6 trillions), it's been a sort of financial hologram ever since. The current banking crisis is the Repo Market crash finally coming into the daylight.

I've looked at dlar several times, as from time to time it looked cheap, for a while their move into other security areas looked promising, but evidently it's not working out. The people running the company seem to be learning on the job and none too fast, and seem not to understand the industry they are in. It doesn't take much skill to cut costs, but it does take skill to get out there and bring in business, once you have decent cashflow, then you can look to see how best to use it. But without growing cashflow, you don't have anything.

[dealy] 25/3/2023 17:35

Good article. What shocks me through is dozens of other similar size companies in various industries and countries are constantly struggling with profitability. It's almost like only giant companies are profitable and don'tbehave some lingering debt concerns. Eventually this is going to result in lots of job losses which will soon start to seriously affect economic growth.

[farrugia] 24/3/2023 11:11

nice signal from Odey Asset - this is value not bargepole
I think what people miss is that this company has the intellectual property for governments to raise taxes on things.