De La Rue (DLAR) share price falls after it loses out on contract for new British passport post-Brexit and mulls appeal
De La Rue this morning confirmed it had missed out on the contract to design the new post-Brexit British passport in 2019 and said it was mulling its options, including whether to appeal.
De La Rue’s chief executive Martin Sutherland told the BBC’s Today programme the company was “being undercut by a French competitor”, saying his company was not allowed to bid for the right to produce French passports. He asked whether the decision was “sensible for the British taxpayer”.
The firm said the decision, while disappointing, was not expected to impact on its financial performance for the coming year and the next one.
Shares dropped more than five per cent in morning trading.
Read more: Post-Brexit blue British passport to be made by a Franco-Dutch company
In an update, the British firm said:
De La Rue has worked closely with HMPO over the last nine years, designing and producing the UK passport and establishing it as one of the most secure passports in the world. The current ten-year contract has a total value of c£400m.
Today’s decision is expected to have no impact on the performance of current and next financial year.
The company is disappointed with the outcome of the tender process and will now consider its options including an appeal.
Sutherland said Franco-Dutch firm Gemalto had won the contract to create the new blue British passports over De La Rue and a German company, though that has yet to be confirmed by the Home Office.
“I’d like to ask Theresa May or Amber Rudd to come to my factory and explain to our dedicated workforce why this is a sensible decision to offshore the manufacture of a British icon,” he told the BBC.
The decision came from a blind tender process, where it would not be known which firm had submitted each bid. The companies can lodge a legal challenge against the decision.
De La Rue’s share price dropped earlier this week after it announced its finance chief was stepping down, and that profits will be at the lower end of expectations.
De La Rue had previously guided operating profit for the year to March 2018 would be between £71m and £73.4m.
The firm said: “The board expects to update the market on the outturn for the year in the third week of April, and is currently expecting the result to be around the lower end of the current consensus range.”
Read more: De La Rue shares plunge as finance chief walks