De La Rue remains 'cautious' after losing United Kingdom passport tender

UK passport

De La Rue, which also told investors today that it would not be pursuing a claim against the United Kingdom government for handing the production of new passports to an overseas firm, has seen its share price plummet by more than 20 per cent over the last four weeks.

Earlier, the UK's De La Rue said it had abandoned its plan to appeal against the government's decision to award the contract to Gemalto.

Franco-Dutch company Gemalto, whose headquarters are based in Paris, already produce United Kingdom driving licences and have a number of sites in the UK.

Gemalto has a number of factories in the United Kingdom and is expected to use its Fareham site to print some of Britain's new passports, bringing with it the prospect of 70 new jobs.

The existing contract to make British passports is worth 400 million pounds and the new contract starts in October 2019, after Britain leaves the European Union in March that year.

But he told the BBC's Today programme that the firm had now reconsidered.

'We have been advised that the grounds for overturning the decision are insufficiently strong to justify continuing this course of action'.

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The government then granted a two-week extension in a process to decide who would make United Kingdom passports after Brexit.

It comes after a statement released by De La Rue this morning, in which the banknote and security printing company said it was dropping its fight after "having considered all options".

Media captionDe la Rue boss Martin Sutherland claimed: "It is surprising the British government does not support British industry".

De La Rue also confirmed that its full-year earnings would be hit by a write-off of about £4 million related to the bid costs for the passport tender.

Mr Sutherland said: "We have the contract for another 18 months, that gives us plenty of time to take stock, refocus and drive forward on the worldwide front so we haven't made any decisions about jobs in Gateshead".

Shares in the firm dropped as much as 8% after De La Rue announced their profit blow and the departure of their finance chief last month.

The figure reflects the write-off of £4m related to the United Kingdom passport tender and delays in the shipment of certain contracts in the last week of the financial period.

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