De La Rue plans to restructure currency division

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The Independent Online
DE LA RUE, the world's largest producer of bank notes, yesterday announced a big shake-up of its currency business which could lead to job losses among its 3,800 strong UK workforce. The troubled group, which was forced to announce a profits warning last month and has mounted a search for a new chief executive, is to undertake a strategic review of the division over the next few months in an attempt to improve earnings.

De La Rue has been forced to respond to a decline in business at its banknote division, which has been dogged by overcapacity in the market. The division has been reorganised into four new streams including banknote and banknote paper, other paper and printing, its international business and special products, which will include the production of the new euro.

De La Rue appointed 36-year-old James Hussay as managing director of the bank note business. He was formerly managing director at Portals Group, the security and specialist papermaker which De La Rue acquired three years ago.

Michael Pugh, De La Rue's managing director of the security paper and print division, said: "The overcapacity in the bank note market has considerably affected our profitability and one of the first tasks will be for James to determine what further steps need to be taken to tackle this."

Brandon Gough, De La Rue's chairman who has taken on the day to day running of the business, added: "There is no magic formula. While we are the most efficient commercial banknote producer in the world and the most profitable, it was time to take a serious look at that business, to shake it up."

De La Rue also recently took a stake in an electronic terminals business run by France's Ingenico SA in an effort to improve its exposure in that area.

The group's profit warning triggered a slump in its share price, but news of the restructuring helped De La Rue's stock recover 5p to 289p yesterday.

The company warned that its physical security business had performed badly, wiping out almost pounds 10m from the division's operating profits. De La Rue was also hit by the economic crises in South-east Asia which accounted for 10 per cent of its total cash-handling equipment sales.

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