De La Rue's final deal looks surprisingly positive
De La Rue has been around for over 200 years. In its earlier life, the company expanded across the globe and ended up winning contracts from clients as diverse as the Bank of England and far-flung money-printing authorities in Mauritius and Kuwait. But the decline of cash in recent decades, and the loss of a contract for printing British passports in 2018, have caused financial pain and plenty of profit warnings.
In 2022 the company had a public fight with its auditor EY over a warning in its accounts that the company may struggle to survive as a going concern. Then in 2023 the group requested to defer payments intended for its pension scheme and activist shareholder Crystal Amber Fund called for a new chair and business plan. The shares then traded at a fraction of their current value.
Enter Clive Whiley in 2023. Since his appointment to lead the board, De Le Rue's shares have increased nearly fourfold thanks to a focus on cutting costs. The group is also in the process of selling its authentication business, which helps governments detect fraud, to U.S. industrial technology company Crane NXT (CXT.N), opens new tab.
Buyout group Atlas is effectively taking over the remaining banknote business, the last vestige of a once-sprawling empire. The rise of digital money might, in one sense, make that seem like a dicey bet. In 2023, opens new tab in the United Kingdom, opens new tab, for example, only one in five transactions were made in cash, according to the British Retail Consortium.
Yet Atlas may have its eye on the classic private-equity playbook of boosting cash flows by taking an even greater axe to costs. There appears to be some scope to boost profitability. Ten years ago, the business operated with an EBITDA margin of nearly 20%, which has since declined to under 13%.
And the authentication-division sale will bring in 300 million pounds next month, which implies net cash for De La Rue of about 100 million pounds, according to a person familiar with the business, giving Atlas plenty to play with. For a centuries-old company, there seems to be a surprisingly large amount of value left to extract.
Follow @aimeedonnellan, opens new tab on X
U.S. private equity firm Atlas on April 15 said it had agreed to buy British banknote printer De La Rue for 263 million pounds.
The 130 pence per share all-cash deal implies a 16% offer premium to De La Rue's closing price on April 14.
Shares in De La Rue were up almost 16% to 129.54 pence as of 1053 GMT on April 15.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
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Residents in Bethnal Green have described the streets as "unrecognisable", claiming the tight-knit community has disappeared from their doorsteps in recent years - but there's much debate if a notorious former resident is to blame. 18 Locals are clear on one thing - the famous soul of the area has gone Credit: Chris Eades 18 Serif Farmer, who runs Solis Launderette, explained that money was the only thing stopping her from leaving Credit: Chris Eades 18 Locals have described the once-thriving suburb as 'unrecognisable' Credit: Chris Eades Business owners are disgusted to see piles of rubbish lining Bethnal Green Road - the heartbeat of the east London suburb - and areas behind their shops. Serif Farmer, who runs Solis Launderette, explained that money was the only thing stopping her from leaving. She said: "I've worked here for 32 years and it's gone downhill. 100%. 'If I had money I would move out tomorrow, preferably abroad. Bethnal Green is just not a beautiful place anymore. If I had money I would move out tomorrow. Bethnal Green is not a beautiful place anymore Serif Farmer, launderette manager "It used to be so clean and spotless but now it's just a dump. "If you go out the back [of the shop] it's just terrible out there. "It's just all cardboard boxes on the floor and it is just rat-ridden out there. "I'm surprised shop owners haven't been done for it. "I'm not saying the people are horrible, but the place has gone downhill. It's just changed so much." According to a 2021 report, Tower Hamlets Council has been forced to slash more than £200 million since 2010. ISIS bride Shamima Begum LOSES battle for British citizenship and must stay in Syria for now It blamed the huge cuts on Government austerity and "increasing demand" in the area, with the council pointing to the ongoing impact of Covid. The report also referenced the Tower Hamlets Poverty Review, which found that, in a typical classroom of 30 children, 17 were living below the poverty line. It added that 44% of elderly people were living in low-income households. Serif, 63, went on to say that community spirit in Bethnal Green had "died out". She added: 'My mum came from Cyprus, she taught herself how to speak and read English when she moved here. 'She integrated with everybody, with the locals, and my dad did too. 'It was such a great area and everybody mixed, all different nationalities. We all got on and the atmosphere was brilliant. 'When me and my brother first came here, the whole community was close and we all spoke with each other. 18 Serif, 63, went on to say that community spirit in Bethnal Green had 'died out' Credit: Chris Eades 18 Yakup Ozkurt is looking to sell his 51-year-old kebab shop Credit: Chris Eades 18 Barmaid Enora Birec claimed the town was more 'closed off' Credit: Steve Bell "We used to have celebrations with everyone sitting out on the streets, but now everyone is depressed. 'It's not safe like it used to be where they used to get the police round and you recognised faces on the high street. 'There's more crime, more phone snatching, things like that." 'It's not a community like it was years ago." "People drive around with flags in their cars and are very vocal in their support. 'You never used to be worried walking down an East End street. 'It's always been rough and ready around here - it's famous for it - but there was a community here. 'Locals are scared and the East End is gone. It's only going from bad to worse.' The regulars also fumed that "bread and butter" locals had disappeared from Bethnal Green. They added: "It's supposed to be the East End of London. 'In general, before you used to be able to walk down the street and say hello to everyone, we all knew each other. 'But nowadays the community just isn't there. In terms of your locals, your bread and butter of the community, they're gone. "It's gone. It's not how it used to be." Shamima Begum Further down the high street, punters at The Marquis of Cornwallis pub told how former resident Shamima Begum's decision to join ISIS had caused more scepticism in the area. Begum - who fled the country in February 2015 - continues to divide opinion across the London borough where she once resided. But locals are clear on one thing - the famous soul of the area has gone. They claim that the way of life in Bethnal Green has changed "to the extreme" since Begum left the UK at the age of 15. She was joined by two pals - Amira Abase and Kadiza Sultana - as they flew from Gatwick Airport to Turkey after lying to their parents. Begum, who was born in the UK to parents of Bangladeshi heritage, married an Islamic State fighter soon after arriving. 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People started looking at their neighbours, especially when Shamima first left, and thinking twice about them Punter at The Marquis of Cornwallis pub Enora Birec, 26, barmaid at The Kings Arms added: 'I go up and down this high street twice a day. It is a very diverse place. 'I do think in general it is slightly more closed off than it was. 'I have a Bangladeshi friend who told me that the community was being pushed away from the area. "She (Begum) was in a building that was being knocked down in the Bethnal Green area. 'But the Bangladeshi community is quite strong here, I think they are very settled.' According to a Government report released in 2014, the largest ethnic groups in the Bethnal Green area were White British (37%) and Bangladeshi (32%). More than a third of the residents in the east London town were Muslim, with 25.8% Christian and 21.9% not belonging to any religion. Local businesses are suffering Yakup Ozkurt, who owns the 51-year-old White Horse Kebab House, admitted that he had taken the tough decision to sell the business. Pointing to Bethnal Green's "unrecognisable" community, the 56-year-old said: "It was a good area. But for me, it is finished. 'I've been living here for 27 years. The first time I came to Bethnal Green, it was predominantly English people. "In the last ten years in this area, lots of that core population has left. 'People would say hello, good morning to you. Lots of people were close and got on. "But now, people are never smiling. The community is not very close, no one talks to anyone. This shop is 51 years old, but I'm selling up now because this area is finished Yakup Ozkurt, local kebab shop owner 'Before they had loads of pubs but they're all closed or closing. 'This shop is 51 years old, but I'm selling it now because this area is finished." Resident Mohamed Miah suggested the borough had become "unrecognisable" in recent years. The 40-year-old, who runs the local taxi office, said: 'Bethnal Green, I was born and raised here. It's not like the old East End anymore. 'From when I was growing up to now, it's not recognisable anymore. 'This is the oldest cab office in Bethnal Green - our customers have moved out from here. 'There's a lot of drunken behaviour and people doing balloons, driving up and down in their cars all night. 'There's more CCTV on the road, so in that sense they are doing well. 'But everything has changed here man, it's not like the old school.' 18 Mohamed Miah said the area had become 'unrecognisable' Credit: Chris Eades 18 Some shops have been forced to shut along the high street Credit: Chris Eades 18 Market stall trader Aissa Derouiche told how tourists were rarely seen in the area Credit: Steve Bell Staff members at Trotters Jewellers, which has been on the high street for 35 years, added that the face of the high street had changed "to the extreme". They explained: "It's changed to the extreme, it's not like the old East End anymore. 'We're one of the most established businesses, but also one of the lasting few. "Of course, it's changed totally. It's not thriving at all and everything is stacked against you. It's changed to the extreme. It's not like the old East End anymore. Staff at Trotters Jewellers "Having a business here is a lot harder than it was 10 years ago for sure. 'We have shops in Liverpool Street and Hatton Garden, but we've noticed such a change, especially here. Not for the good.' Market stall trader Aissa Derouiche, told how tourists were no longer flocking to Bethnal Green, despite it being located just minutes from the popular Brick Lane area. The 55-year-old, who has worked on the street for 17 years, fumed: 'Everything has changed. "Some people left and businesses have suffered. Shops have closed and the place has changed for the worse. 'The community is close, but it has grown apart in recent years because people have left. 'Tourists have stopped coming to Bethnal Green in the last ten years which has had a huge impact on my business." Shamima Begum's fight to regain UK citizenship She married an Islamic State fighter soon after arriving in 2015 and went on to have three children. Her UK citizenship was stripped on national security grounds in 2019. In February 2020, a tribunal ruled that removing Ms Begum's citizenship was lawful because she was "a citizen of Bangladesh by descent". In 2021, the Supreme Court ruled that Ms Begum could not return to the UK to appeal the decision to remove her citizenship. Her lawyers challenged the removal of her citizenship at the Special Immigration Appeals Commission two years later. The commission agreed that there was a credible suspicion that Begum was a victim of trafficking and sexual exploitation, but it ruled this did not stand in the way of stripping her of British citizenship. That decision was upheld at the Court of Appeal in February 2024. Earlier this year, she lost an initial bid to take the case to the Supreme Court. Begum remains in a camp controlled by armed guards in northern Syria. Society has moved on since Shamima However, some locals claimed that Begum's name was no longer commonly heard around the area. Mohammed Ahmed, who works at his father's shop Continental Grocers, slammed the government's decision to strip her of her British citizenship. He said: "She is not a big deal around here anymore. 'Look, she fled to Syria. She was very young at the time. 'I think the decision to strip her of her citizenship was wrong. It's worse now because she has kids I wouldn't say I miss her. I am only missing out on a customer because she's not here Shop worker Mohammed Ahmed 'It's not the case that it's embarrassing for the community, but it doesn't ever get brought up. 'I wouldn't say I miss her. I didn't know her. 'I am only missing out on a customer because she's not here." Bangladeshi nationals Sharif Sarker and Chunki Akter hailed the east London town as a "home from home". The couple, who moved to Bethnal Green two years ago, explained that living there had made following their traditions easier. 18 Some locals claim that Begum's name is no longer commonly heard in the area Credit: PA 18 Sharif Sarker and girlfriend Chunki Akter hailed Bethnal Green as a 'home from home' Credit: Steve Bell 18 Cab driver Reg Singh was four years old when he moved to Bethnal Green from India Credit: Chris Eades Chunki said: "To be honest, we are not a very strong part of the community. "We have only been here for two years and don't really know who the community leaders are. 'We moved from Bangladesh in 2023. We came here because there is a strong Bangladeshi group here. 'But Bethnal Green is mostly Bengali and it really helps us as we try to follow our traditions, especially with food. 'I used to live in Barking but it was a pain to go shopping. 'Everything I used to eat in Bangladesh, I can get it here. It's easy. 'We feel at home here, we can speak our language and buy our food here.' Cab driver Reg Singh was four years old when he moved to Bethnal Green from India. The 71-year-old added: "It was a different scene then. 'It was a neighbourhood, people knew one another and it was a community we had here. It was wonderful. The East End way of life has changed because whatever community comes in, they bring their own way of life Black cab driver Reg Singh 'Over the past few years there have been big changes. 'It's changed because there's a different community in the area. "There's a more predominantly Bangladeshi and Muslim community. 'The East End way of life has changed because whatever community comes in, they bring their own way of life. 'I'm not saying it's a bad thing, I think it's good. That's just how it is.' 18 Residents have fumed at 'huge changes' in the area since Begum left Credit: Not known, clear with picture desk 18 Local businesses are under threat and face closing up for good Credit: Chris Eades
