De La Rue confirms polymer expansion

All Bank of England banknotes are switching over to polymer
All Bank of England banknotes are switching over to polymer

De La Rue has announced plans to create up to 70 new jobs as it expands its polymer banknote material production in the UK.

In a trading statement today (28 January), the security printing group said that it had acquired an additional building next to its existing Westhoughton site in Lancashire.

De La Rue is planning to increase its planned investment in polymer from £15m to £20m. The new facility will more than double De La Rue’s current polymer manufacturing capacity for its Safeguard substrate.

The new manufacturing line is expected to be up and running by the end of the year, with up to 70 jobs created “during the next two-and-a-half years” as part of the expansion.

CEO Clive Vacher commented: “It is a fitting endorsement of the technical and operational capabilities of our Westhoughton site, that we have made the decision to concentrate our polymer substrate manufacturing into this Centre of Excellence.”

De La Rue is one of two suppliers of polymer banknote substrate to the Bank of England, alongside CCL Secure.

The Covid-19 pandemic had made obvious changes to the way people use cash, with many stores preferring contactless or card payments over handling money, and consumer spending falling overall. Some experts believe the switch to "cashless" transactions has accelerated by the equivalent of five years due to the pandemic.

However, according to the Bank of England the amount of cash in circulation has actually increased. In a recent update it stated: "People are spending less cash, but the total value of banknotes in circulation has increased as people appear to choose to hold more cash. These trends have persisted for a number of years, but have been magnified by the pandemic."

De La Rue also said that forecasted operating profits for the 2020/21 financial year were likely to be higher than expectations, at between £36m-£37m. The previous estimate was £34m.

Shares in the group jumped by nearly 8% to 165.2p on the news.

The group said it had “successfully mitigated the challenges of the pandemic” although there had been some delays in securing new contracts with overseas governments at its Authentication wing “due to disruption in procurement processes”.

De La Rue announced last year that it would be spending nearly £80m on a radical three-year turnaround plan.