October 7, 2019 / 6:27 AM / 7 days ago

Passport maker De La Rue flies in turnaround specialist

(Reuters) - De La Rue (DLAR.L) has appointed turnaround specialist Clive Vacher as chief executive as the banknote and passport maker contends with a series of setbacks.

FILE PHOTO: The corporate logo of De La Rue is seen at De La Rue Malta at Bulebel Industrial Estate in Zejtun, Malta April 24, 2018. REUTERS/Darrin Zammit Lupi/File Photo

Vacher takes over immediately from Martin Sutherland, whose departure was announced after a May profit warning, but faces significant challenges alongside new chairman Kevin Loosemore.

De La Rue’s share price has more than halved since the profit warning, with the company also taking a one-off hit for non-payment from Venezuela and an investigation led by Britain’s Serious Fraud Office (SFO).

Vacher was previously CEO at semiconductor business Dynex Power and has held senior positions with industrials Pratt & Whitney (UTX.N), Rolls-Royce (RR.L) and General Dynamics (GD.N).

De La Rue is emphasizing Vacher’s credentials in business transformation and operational turnarounds, which may prick up the ears of all shareholders, said Russ Mould of investment broker AJ Bell, referring in particular to activist investor Crystal Amber Fund.

The fund owns a little more than 6% of De La Rue and last month said the company suffered from a lack of strong and knowledgeable leadership.

Crystal Amber did not respond immediately to a request for comment.

Shares in De La Rue were up 2.7% at 230 pence by 0955 GMT.

De La Rue did not disclose Vacher's remuneration but predecessor Sutherland's package for the year to March 30 was close to 1 million pounds ($1.23 million), the company's latest annual report here shows.

London-listed De La Rue, which produces passports for 40 countries, has designed about a third of the world’s banknotes in circulation and is the world’s largest commercial printer of passports.

The SFO opened a criminal investigation into the company in July over “suspected corruption” in its business in South Sudan, where De La Rue has designed and printed all new currency since the country’s secession from the north in 2011.

De La Rue has said it is cooperating with the SFO investigation.

The company's woes have been compounded by the loss here of its 400 million pound contract to produce Britain's passports ahead of the country's planned exit from the European Union.

To counter weakness in its traditional businesses, De La Rue has been shifting to new areas and it recently secured a contract with the UK tax authority and Saudi Arabia.

The company is also realigning operations to focus on its Currency and Authentication divisions.

“It also needs to prove that it has a strategy that leaves it well-positioned to cope with a world where cash is being used less and less,” AJ Bell’s Mould said.

Reporting by Tanishaa Nadkar and Pushkala Aripaka in Bengaluru; Editing by Bernard Orr and David Goodman

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