De La Rue Eyes Eurozone Crisis

Started by Bimat, November 22, 2011, 04:59:12 PM

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Bimat

Banknote printer De La Rue keeps an eye on the eurozone crisis

Company could win business from any euro break-up, and from regime changes elsewhere.

Proving that one person's misery could be someone else's gain, banknote printer De La Rue sees the eurozone crisis as an opportunity to gain business.

After all, if the previously unthinkable happens, and countries either leave the euro or the single currency breaks up completely, some one will have to print new lira or drachma or whatever. De La Rue chief executive Tim Cobbold told Reuters the crisis could create opportunities but he refused to go into specifics.

The company has already benefited from the creation of South Sudan following the split of Africa's largest country into two earlier this year after a civil war. De La Rue's first half figures were lifted by its contract to print money for the new country, and it hoped other regime changes could see more business come its way. But the company is still not completely over the problems associated with the loss of a contract from the Bank of India following production problems in July 2010 and a subsequent investigation and restructuring. It is relocating operations at its Dunstable and Basingstoke sites, which will cut costs by around £6m a year.

Operating profits rose 13% to £31.5m but taking into account last year's exceptional gain from the sale of its stake in lottery operator Camelot, pretax profits fell from £69.4m to £27.1m.

[...]

Source: Guardian
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

Bimat

Banknote printers 'dust off their drachma'

The Times is reporting that De La Rue, the British company that produces banknotes for more than 150 countries across the world, is preparing for a potential reintroduction of the drachma.

Production staff at the company in Hampshire have been asked to select potential security threads to be used in new banknotes, and to find covers from old collections of copper moulds used for watermarks.

De La Rue has not made drachmas for decades and has destroyed a lot of the equipment for the currency. However, some of the Greek moulds have been kept and sources said the watermark, a classical Greek head, was not very intricate.

Source
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

Figleaf

How funny to think that the Greek problems are euro problems. On the contrary. I would expect the euro to become more expensive if the big political accident happens and Greece flies out. Would De La Rue profit? Maybe, if the Greeks would pay. I would expect them not to pay and I would expect any insurance to be prohibitively expensive, but maybe ECGD thinks the British taxpayers can bear the risk of Greek non-payment. Life is so complicated...

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

Bimat

My only reaction after reading this: ::) ::) ::) ::) ::)

Has De La Rue Already Printed the Post-Euro Currencies?

By Peter C Glover
Posted on Jun. 04, 2012

Rumours that British firm De La Rue Currency, the world's largest banknote printer, has started printing drachmas in anticipation of Greece's euro exit have been rife for a while. However, I have received information that a De La Rue insider confirms that not only has the Hampshire-based company printed drachma, it has already printed substantial reserves of all 17 pre-euro banknote currencies, including the Deutschmark.

While there is no way of independently verifying this it would make sense for a number of reasons. Not least the inevitability that 'somethings gotta give' and soon in Euroland. And no one can predict the extent of the economic fallout. De La Rue's CEO Tim Cobbold has already stated that to print new currency in the space of a couple of weeks "would be impossible". Indeed the sheer number of banknotes required to replace a national currency requires strategic forward planning. It would not be at all surprising therefore if a currency Plan B was in place in the event of a euro break-up, or in lieu of an exit by the Greeks. And I am advised that De La Rue is currently in an even higher state of information lockdown than usual.

There is little point in asking De La Rue. They have a long-standing and strict policy of never commenting on their currency printing arrangements. CEO Cobbold would only, as he has done before, point out that most Eurozone states have their own printers. True enough. But De La Rue has the advantage of a solid history of high security and its printing press is outside prying Eurozone eyes. Given that news of an official sanctioning of the printing of pre-euro currencies would likely create a run on European banks already teetering on the brink of crisis, keeping tight-lipped about contingency arrangements is hardly surprising.

And there is background that lends support to the view that anyone looking for a good investment could do a lot worse than consider how well-placed De La Rue is to cash in on the meltdown of the European single currency.

De La Rue is a half a billion pound operation that prints banknotes and other security documents, including passports for 150 countries. As recently as 2011, the discovery of "production irregularities" at De La Rue caused it to lose some market credibility, a key customer (India), and its then chief executive. Rumours of a takeover by French rival Oberthur surfaced. As a listed UK company, De La Rue's economic fortunes remain unchanged for a number of years. Since last year that has begun to change.

With the arrival of new CEO Tim Cobbold, De La Rue's market stock has stabilised and steadily risen. But it was Cobbold's reference to "a strong pipeline of opportunities" in the group's annual results published in May that sent the currency whispers into overdrive. The company admits that its order book has increased by 14 percent to £248 million, but it won't reveal details. Operating profits are also currently up post-tax by 56 percent. At the beginning of this year a further formal bid of £9.35 from Oberthur was again rebuffed. Just a few months later De La Rue's shares are trading just above the £10 mark. Even so, investors considering De La Rue for a quick killing on the back of the euro crisis should be warned it would not be without risk. Even if oodles of pre-euro currencies are sitting in De La Rue's warehouse in southern England, the EU has a history of making political decisions aimed at keeping the 'European Dream' alive at almost any cost to its constituent states and its taxpayers.

Meanwhile the chorus for a new economic arrangement is growing by the day. The latest voice calling for a Plan B for the eurozone is that of Mario Draghi, President of the European Central Bank. Draghi has lately made it clear that the current set up for the euro is "unsustainable". Just how far EU and Eurozone leaders will go to sustain Plan A remains unclear. And that means that investors considering a swoop for De La Rue shares could still get their fingers burnt, printed pre-euro currencies or not.

But, as former UK PM Maggie Thatcher famously pointed out, "The trouble with socialism is that eventually you run out of other people's money". The moment the Germans pulled the life support system plug on the profligate southern socialist states, the writing was on the wall. Indeed, Belshazzar's mene, mene, Tekel u-pharsin is a more than an apt analogy for a collapsing empire and its centrally planned economic system weighed by market forces – and found wanting.

Source: Energy Tribune
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

Figleaf

Quote from: Bimat on June 04, 2012, 05:41:51 PM
I have received information that a De La Rue insider confirms that not only has the Hampshire-based company printed drachma, it has already printed substantial reserves of all 17 pre-euro banknote currencies, including the Deutschmark.

I have information that a hospital insider confirms that no journalist they ever operated on had more than half a brain. Some get no farther than copy-paste and eating pizza.

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

asm

Is some one trying to get the company in to trouble with the law in so many countries that they finally file for bankruptcy and the guy ends up buying it dirt cheap.............

Amit
"It Is Better To Light A Candle Than To Curse The Darkness"

Enlil

Quote from: asm on June 05, 2012, 06:41:36 AM
Is some one trying to get the company in to trouble with the law in so many countries that they finally file for bankruptcy and the guy ends up buying it dirt cheap.............

Amit
They need to prove it was De La Rue that said these thing and is printing currency. I doubt it as no contract is in place that we know of, and if the breakup does not eventuate then it would be a waste of money.