Crystal Amber said that its ongoing strategy to dispose of its holdings and return capital to investors had resulted in a portfolio with a high concentration of holdings, now down to just four companies including its circa 10% stake in De La Rue, where Crystal Amber has previously called for chairman Kevin Loosemore to resign. 

In its half-year update, Crystal Amber chairman Christopher Waldron said: “The board is also hopeful that the fund's continuing engagement and agitation for change will lead to improvements at De La Rue, although this has proved to be a frustrating process.”

In what has been a miserable period for the security printer, De La Rue issued three profit warnings last year, its auditor warned that it could breach banking covenants, while in January the group announced that operations at its Kenyan banknote printing operation were being suspended and it was being investigated in India. The group's CFO also departed.

In its update Crystal Amber stated: “[De La Rue] management has sought to blame factors outside of its control. However, the blunt reality is that it has made operational and strategic mistakes. Margins have shrunk because De La Rue has failed to secure new business in both its Currency and Authentication divisions. 

“Despite savage cost-cutting, margins in both divisions are unacceptable. Driving down costs in an attempt to avoid a fourth profit warning is not a good strategy. It is revenue that matters: removing headcount means that when business is won, orders cannot be fulfilled. Even after significant investment funded by shareholders, the business still fails to generate cash and it is all too evident that the turnaround plan has failed.”

De La Rue has not commented on Crystal Amber’s latest salvo. 

Speaking at De La Rue’s most recent results announcement, CEO Clive Vacher said the business had dealt with a number of legacy issues, and had “created a company that is well positioned to weather the current operating environment”.

He also set out the group’s vision for the next three years, “with value-generating plans across the company, aimed at continuing growth in Authentication and solid returns on the investments made in Currency. We are reiterating that as part of this, next financial year, the Company will generate free cash flow and see an improved EBITDA.”

De La Rue’s share price went up by 9.42% to 56.90p in trading this morning (21 March), but remains close to its 52-week low of 52.61p (52-week high: 118.80p).