Crystal Amber Fund increased its holding from 7.12% to 14.33% yesterday, making the fund De La Rue’s biggest shareholder.

Shares in De La Rue plunged to a ten-year low of 131.40p at the end of last month after the group warned that, in a worst-case scenario, it could potentially breach its banking covenants and put its future in doubt.

https://www.printweek.com/news/article/de-la-rue-warns-on-covenants-new-ceo-takes-urgent-action

Crystal Amber Fund had been critical of the performance of De La Rue’s former chairman and chief executive, but is making more positive noises about the new board, including fresh CEO Clive Vacher.

In a monthly update note filed prior to upping its stake, the fund said: “There is early evidence that the new chief executive will adopt a focused and sensible approach targeted at rebuilding the value of De La Rue’s banknote business and capitalising on the opportunities presented by its high-growth, high-margin authentication activities.

“De La Rue also has obvious strategic value, as evidenced by the takeover approach from its competitor Oberthur in 2010, at a valuation of around two times annual revenue. Crane Currency, another banknote producer, was itself acquired in 2018 for US$800 million, which also equated to around two times expected annual revenue,” it stated.

De La Rue’s market capitalisation is currently just £138.65m, while its sales at the half-year were £205.9m. 

Its share price recovered slightly to 155p after the half-year results, but has since fallen back again and was down 5% at 133p at the time of writing.