Profits fall by 74% at burgundy passport manufacturer after French firm given blue passport contract
- Credit: Archant
The chief executive of a company that had hoped to make the new blue passports for the United Kingdom after Brexit has resigned after operating profits fell by 74% after the government awarded the contract to a French company.
Martin Sutherland announced plans to step down from the banknote and passport-maker after five years.
The Basingstoke-based company De La Rue had been producing the burgundy passports which is synonmous with the UK's membership of the European Union.
It had bid to produce the new post-Brexit blue passports so that it would continue to be manufactured on British soil, but the government instead awarded the contract to Franco-Dutch rival Gemalto.
Consequently operating profits for the year to March 2019 plunged 74% to £31.5 million, down from a £123 million operating profit the previous year.
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In light of this the company revealed it will launch a three-year strategic review.
Sutherland said: "As we look ahead, the conclusion of the UK passport contract in 2020 and the growing competitive pressure in the banknote print market present some significant challenges for our business.
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"To partially mitigate against this, today we have set out a three-year cost reduction programme.
"In addition, we will be proposing a reorganisation of our business over the next 12 months designed to enhance our strategic focus and generate greater efficiencies."
Sutherland will continue to serve in the role until a successor is identified, the company said.
The outgoing boss said last year it was "disappointing and surprising" that "this icon of British identity is going to be manufactured in France".
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