Shares in banknote printer plunge as chief exec Martin Sutherland agrees to go

This article is more than 1 year old

This article is more than 1 year old

The UK banknote printer De La Rue is parting ways with its chief executive a year after he lost the battle for a £490m contract to print the post-Brexit blue passport.

It came as the firm revealed a 77% drop in pretax profits and said tough competition would contribute to “somewhat lower” profits next year. The company is now set to cut £20m in costs.

Shares in the group plunged almost 30% to 330p.

The firm said it had agreed with Martin Sutherland that he would step down following a five-year stint as its boss, but that it had yet to appoint a successor. He will continue in his role until a replacement is found.

The news follows a highly publicised battle for the contract to print the UK’s post-Brexit passport, which was given to Franco-Dutch company Gemalto.

When it emerged that the government had chosen the firms’ foreign rival, Sutherland pledged to appeal the decision, challenging Theresa May to visit his factory and explain to his workforce why it was a “sensible decision to offshore the manufacture of a British icon”.

He gave up the appeal a month later, saying the company had made a “pragmatic business decision” after taking legal advice.

The company’s chairman, Philip Rogerson, said Sutherland had helped move the company from a “traditional manufacturing business to a service-oriented business”.

“The company is now well positioned to move to the next phase of this journey,” he said.

The firm announced Sutherland’s exit alongside its full-year results, which detailed a major drop in pretax profits from £113.6m to £25.5 and set out a sweeping cost cutting plan .

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Sutherland said the end of its UK passport contract in 2020 and “competitive pressure in the banknote print market” presented significant challenges for the business.

“To partially mitigate against this, today we have set out a three-year cost reduction programme intended to deliver in excess of £20m in annual savings by full-year 2022,” he said.

“In addition, we will be proposing a reorganisation of our business over the next 12 months designed to enhance our strategic focus and generate greater efficiencies.”

He said the past five years in his post have been marked by “significant structural change in the industry and real strategic change within the business”.

“With a clear strategic vision now in place and being executed, now feels like the right time for me to hand over to a new leader, to take things to the next phase. I wish the board and the company every success,” he said.