De La Rue ties up crucial Bank of England contract
Monday, September 8, 2014
De La Rue has been selected as the preferred bidder for the Bank of England's new 10-year banknote printing contract, which is due to begin in April 2015.
The final contract award announcment is expected next month, once the Bank of England has completed due diligence checks in respect of De La Rue's bid.
De La Rue was the incumbent in the hotly contested tender, which chairman Philip Rogerson described earlier this year as the single biggest commercial issue facing the company.
"We are delighted that De La Rue has been selected as the preferred bidder for this very prestigious and important contract with the Bank of England," said Rogerson.
Following last month's appointment of a new chief executive, the contract award marks the successful completion of one of the final hurdles in De La Rue's recovery from its annus horribilis in 2010.
In addition to the commercial implications, securing the £1bn Bank of England contract go some way towards counteracting the lingering uncertainty surrounding the fall-out from De La Rue's 2010 "paper production issues".
The Bank of England originally outsourced production at its printing facility in Debden, Essex to De La Rue in 2003. In 2012 it issued a tender inviting up to five operators to pitch for a new £1bn contract.
De La Rue missed out on the contract to supply polymer banknotes to the Bank of England for the upcoming £5 and £10 notes, which was instead awarded to Innovia Group in 2013.
De La Rue's share price rose 3% on the announcement, climbing to 765.2p in early trading.