February 25, 2020 @ 9:30 by Steven Hugill
A currency and passport maker operating a North East plant has revealed multi-million-pound cost-cutting measures.
De La Rue has launched a turnaround plan to slash annual costs by around £35 million over three years.
The firm, whose Team Valley Trading Estate factory is known for making millions of notes for countries around the world, had previously targeted £20 million worth of savings.
However, bosses say its revised cuts will enable the business “to compete more strongly across all market segments (and allow) it to tender for currency orders it would previously have declined.”
The company has yet to indicate if the changes will affect workers at its Gateshead base.
Confirmation of the financial plan comes after officials last year revealed their intention to restructure operations after the business suffered from price pressures in the currency sector and significant changes to its senior team.
It also lost a high-profile contract to make new blue British passports for the Brexit era, despite having supported the Passport Office for years with millions of UK travel documents.
Senior figures say the cuts, augmented by the £42 million sale of De La Rue’s International Identity Solutions business in October last year, will help its currency division return to margin growth in its 2020/2021 financial year.
Revealing the firm sees great market opportunities for growth across the global currency sector, chief executive Clive Vacher said the plans will deliver “long-term stability.”
He said: “I am pleased we have delivered our review of the business on schedule and are on track with the turnaround plan, which will deliver significant improvement in operational and financial performance.
“The plan drives extensive cost reduction and, in parallel, offers a substantial investment opportunity for growth.
“De La Rue will be an even stronger brand going forward, with exciting market-leading innovations and unparalleled customer focus and support.
He added: “For our shareholders, the plan creates value, sustainability and predictability.
“I am confident this is the right plan.
“There is a considerable amount of work to be done, and the company has a single, focused plan, a fully aligned leadership team, and a greatly enhanced structure.
“We are ready to execute.”