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Looks oversold and should pull back up to 40p plus still making £20m plus a year so will be able to cover debt which isn’t due til 2025.
Looks rather overdone to me…. Only at 3x operating operating profit now…
Is this company carrying?
Just gets worse and worse
Thanks Sefton. Nonetheless, I suspect the writing is on the wall for existing management, esp in the light of today's less than stellar update.
As I've been saying for sometime now, no shareholder, institutional or otherwise, can afford to preside over this car crash for much longer.
An interesting (albeit expensive for me) case study here.
Below expectations.
I might have a punt on this tomorrow morning, the latest debacle regarding the non-disclosure of a previous director employed in the 90’s is more fuel to the fire. Get him out and watch this rocket.
Always been on my radar this one and it looked good value at 74p in January and now here we are 30% South of that. The only way that this has any chance of having a happy ending is a new CEO and BOD. To think that this share was trading at over 500p just five years ago. Looking good for a bounce though, if they manage to get him out.
Unhooked,
Institutional investors are always extremely wary of voting to remove management teams, no matter how terrible they may be. It is maddening but has always been like that. Hedge funds are generally much more prepared to support such actions and it is often difficult to co-ordinate retail investors.
The problem here is that, whilst Loosemore seems to be pretty useless (and certainly the share price reflects that perception) , the "solution" as put forward by Crystal Amber is itself pretty uninspiring. The suggested replacement chairman looks a pretty poor choice and there does not seem to be any alternative strategy for the firm being put forward by Crystal Amber.
The reality is that the company needs a proper CEO (the current one has been a transparent disaster) because the CEO has much more power to really change things than the chairman. It is possible that CA's attempt to get rid of Loosemore is a precursor to getting rid of the CEO and getting in someone decent into that role.
But what decent CEO would take on that role here? It would just be career suicide.
This company either needs a very different strategy or to be sold to a much more financially stable player (though there would likely be competition authority issues there). The current strategy and leadership team are getting them nowhere - in fact, if it were only nowhere, it wouldn't be so bad - they are actually getting deeper into the hole.
But why is that Sefton82 - why do you think it's so difficult to remove Loosemore et al?
One presumes because the shareholder votes aren't there... so the question I'm really asking is why are the big shareholders so wedded to a management and a plan that you say "even the captain of the Titanic would have seen as a bad idea"? I don't get it. Aren't they interested in shareholder returns? Or do they view Crystal Amber as troublemakers?
No government of any sanity is going to give a long term contract on something as critical as currency printing or passport printing to a company whose solvency appears questionable.
So, that hugely damages the sales pipeline - especially when there are several other much more financially stable competitors out there who can do exactly the same thing, in some cases much better.
There could be something to rescue in DLAR but it needs a complete change in strategy and operational and financial structure.
I think CA's attempt to bring in a new chairman who has very few apparent merits is likely doomed to failure - like CA's last attempt to evict Loosemore, which was thoroughly thumped.
It is very frustrating that this "leadership" team seem committed to a path that even the captain of the Titanic would have seen as a bad idea.
The chances of removing them - Loosemore and Vacher - are very low indeed.
They need to be persuaded to a different strategy and CA should have spent their time on that.
Because the chances of kicking them out are not good at all.
When there is a large short on the company it can hard to know what is fact and what is fiction when I read views, the short position has been reduced recently, the NAV is higher than share price and with a low P/E if anything like last years performance is maintained which are all good. On the other side I have seen even good business wiped out with negative interest and even when companies do turn around the share price can take a long time to follow as confidence has been hit. I normally keep a few shares like these in my portfolio and while some have increased 10 fold other have been wiped out. Not for the short termer in my opinion but when a company is consistently profitable (3 years+) they may be considered for a small part of a portfolio imho but don't use a Martingale strategy on a company that can fold probably best to wait for next results and check price around two weeks after.
Thanks your reply. It sounds as though they have the capability but they’re no big contracts as such. That’s a shame.
Their "Security" division has the ability to produce both, Beza. But it is currently working well under capacity.
A question for you De La Rue experts ; are DLAR involved in passport / I.D. cards in any way? Thanks in advance and good luck shareholder’s.
True enough re structural headwinds, although present management have also scored a couple of own-goals. The question (as always) is how fully it's all baked into the share price.
DLAR does look cheap, but then the company has debt, a big pension deficit, corruption issues in India, a winding down in Kenya, etc, etc, and, of course, 3 profit warnings in a row....
And there's no growth plan, just a vague hope that cost cutting will raise profitability.
(P.S. I'm a shareholder, one who bought into the recovery story, and is now very underwater and very unhappy!)
It's a poor track record for sure, be interesting to see how this latest attempt to oust him plays out. Crystal Amber are in winddown mode so could be last roll of the dice before they have to take a massive bath.
Beyond personnel and company specific problems, I wonder if the issues here might be more structural and not necessarily resolvable by shuffling chair. Polymer notes have an unfortunate (from company point of view) habit of lasting much longer than paper ones. Cash use on the decline. IDs are going digital. It would be hard to push back those tides even without the various scandals here.
Loosemore presided over massive value destruction over at Micro Focus, which was caused by the reckless acquisition of Hewlett-Packard's software business back in 2017, which Loosemore was responsible for.
Micro Focus sacked him in 2020, so he was effectively jobless and available when DLAR sacked the previous chairman and, in their infinite wisdom, chose him.
Now he's presided over this much lauded 3 year recovery plan, which has turned out to be a shambles.
Loosemore's record is a losing one - it has "value destroyer" written all over it.
Totally agree with CA Loosemore or should I say Loosecannon is a buffoon who has presided over shareholder destruction, he should be outed immediately and all shareholders with a brain would agree.
There is a decent biz under all this and steps should be taken to break the co up as lots of value here
Crystal Amber having another go at shaking up the BOD - requisitions an AGM to replace Chairman Loosemore.
Indeed something needs doing to stop this slow-motion car crash.
Regarding the three year plan, they said a few weeks back they need another three years!
implements national ID cards will never happen as they tried it in Manchester and abandoned it when Conservative party took over power . Thinking it will be hanging around untill Labour got its hand in power first. But there hope for Labour party is very far away
Back to reality they should finish some thing short term first to kich share up . It down over 40/% just 6 months ago it is just a death duck.
End of three years project should they update something more interesting fact or this will down more as nothing change its course. They should keep the light on and do Harder.
What a shame to see what was once an industry giant enter to this period of decline. It was only a little over 2.5 years ago they raised £100 million through a placing at 110p. With share price now less than half of that, anyone who bought into that placing must feel pretty silly now. Cash raised from that one exercise alone now the entire market cap.
With shenanigans in India it does raise the question about exactly how overseas contracts were obtained and what sort of "incentives" they've been offering to get them. As publicity around that case develops, other countries may well be re-examining the De La Rue contracts now to ensure they were obtained in an manner that was above board. Hopefully they too don't find more skeletons otherwise this could unravel quickly. Sadly this overhang won't make obtaining new contacts any easier.
Auditors going concern notice and CFO resigning after only a little over 2 years sets alarm bells ringing. Management under big pressure. Big question is can they turn this ship around? We can only judge them on previous form. Hard to now see any catalyst that changes the downwards spiral here.
...have dumped their near 18% holding in CRS, which has implications here!
https://www.londonstockexchange.com/news-article/CRS/holding-s-in-company/15867814