Activist investor puts more pressure on De La Rue

De La Rue is on the receiving end of renewed pressure from activist investor Crystal Amber, which has called on chairman Philip Rogerson to stand down at next week’s AGM.

The embattled security printer is already set to part company with chief executive Martin Sutherland, while Rogerson has also said he will step down after Sutherland’s successor has been appointed and has bedded into the role.

However, shareholder Crystal Amber Fund has called upon Rogerson not to seek re-election at the PLC’s upcoming AGM meeting next week.

The fund said it had written to Rogerson on two occasions asking for an explanation for Sutherland’s £197,000 bonus in light of De La Rue’s financial performance, and had requested the bonus be repaid. It said Rogerson had not responded.

Subsequently a face-to-face meeting took place.

“Following the Fund’s meeting in June with the chairman, he subsequently reneged on an agreement to engage with a leading industry player who had indicated to Crystal Amber that it was open to a dialogue with De La Rue to explore mutually beneficial strategic opportunities.

“As a result of Philip Rogerson’s failure to honour his word to Crystal Amber that he was ‘happy to have such a conversation,’ on 20th June 2019, Crystal Amber wrote to Philip Rogerson stating that: ‘we have concluded that all stakeholders would be better served if you now stand down from the board.’”

Crystal Amber said it had advised the De La Rue board that unless Rogerson stands down at the AGM it will requisition an Extraordinary General Meeting with the intention of replacing him.

It described the printer’s financial performance as “unacceptable” and said that, in Crystal Amber’s view, the business had suffered from “a lack of strong and knowledgeable leadership, including an insufficient understanding of how to deliver shareholder value relative to investor expectations”.

Sutherland has a base salary of £502,000 and his total remuneration in the most recent financial year increased by nearly 22%, from £783,000 to £954,000, including the controversial bonus. He purchased an additional five days’ leave for £9,481, which reduced the total amount accordingly.

Rogerson’s salary is £194,000, an increase of £1,000 on the prior year.

In a statement De La Rue described the fund’s proposals as “precipitous and destabilising” and “very clearly not in the best interests of the company”.

The PLC said it was progressing an orderly succession plan to replace Sutherland, Rogerson and senior independent non-executive director Andy Stevens who is also stepping down.

“De La Rue has considered very carefully Crystal Amber's various strategic proposals. The board notes that following the introduction to a potential acquirer facilitated by Crystal Amber the other party did not respond. In addition two suggested acquisition targets were carefully and objectively assessed by the company but in each case De La Rue concluded that they were of no strategic merit,” it stated.

“The Board is well aware of its fiduciary duties and will always work to maximise value for shareholders as a whole; and De La Rue has made significant and demonstrable progress in delivering the necessary strategic transformation of De La Rue into a less capital intensive, more technology-led security products and services provider.”

De La Rue’s share price fell sharply in May, and has been on the slide again since the start of this month. It was at 291p at the time of writing. (52-week high: 553p, low: 282p).


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