World’s largest printer of cash is working out of cash

In the United States, the job of printing money and minting coins falls to the Bureau of Engraving and Printing, which is part of the Finance Department. In the UK, a private company is printing the country’s banknotes and passports – and is running out of money.

De La Rue, who has been printing notes for the Bank of England since 1860 and also prints currencies for 140 other countries, warned last week that there were “serious doubts” about his future.

According to the investment research firm Edison Group, it is the largest commercial printer in the world, produces passports for 40 countries and has designed 36 percent of all banknote denominations in circulation.

Still, the company reported poor financial results for the 2019-2020 half-year and only lost 20 percent of its value last week.

“It cannot be denied that De La Rue’s finances are looking precarious,” said Russ Mold, investment director at AJ Bell.

Despite major orders, De La Rue suffered two major setbacks in the past year that have called the company’s future into question. In 2018, De La Rue lost the contract to print the UK’s new blue passports following Brexit. This contract went to Gemalto, a German company.

“With a contract value of approximately £ 260million, this will translate into significant savings compared to the £ 400million contract placed in 2009 and will offer taxpayers good value for money,” a statement said British Passport Office. The contract is also expected to create new jobs in Gemalto’s UK office.

De La Rue also wrote off £ 18 million last year after the Venezuelan central bank failed to pay the company for its services.

If De La Rue’s worst-case scenario played out next year, it would mark the end of more than 200 years of running for the company, forcing the 140 countries it does business with to turn to others turn to commercial printers to produce their nation’s currency.

De La Rue began printing currency in 1860, including 5, 1 and 10 shillings banknotes in color for Mauritius. In 1862 the company won the contract for the only US postage stamp ever printed abroad. The postage stamp destined for the Confederate States showed Jefferson Davis and was known as the “Five Cents Blue”. During World War II, the company printed money for occupied allies and hid it in a quarry until it could be picked up after the war ended.

In recent years De La Rue has invested heavily in printing polymer banknotes, which are more difficult to counterfeit and cleaner than traditional banknotes. De La Rue printed England’s first polymer banknote, Sir Winston Churchill’s five pound note, in September 2016.

“It is possible that, in the worst case scenario, the government could find a friendly buyer, presumably a domestic with security knowledge and established ties to the Ministry of Defense and the Interior Ministry,” said Mold. Adding to this, De La Rue has enough air to deal with his current troubles to act. “

Despite the surge in cashless payments, the cash market is expected to continue growing. According to Edison, the number of banknotes in circulation will increase by between 3 and 4 percent annually and exceed GDP growth rates in most areas. The reason: In uncertain times, cash is still king.