Published: Wed, April 18, 2018
Money | By Armando Alvarado

De La Rue abandons passport appeal

De La Rue abandons passport appeal

British printing company De La Rue has abandoned its plans to fight the Government in court over the loss of a £490m contract to print United Kingdom passports, calling it the "sensible and pragmatic" thing to do.

De La Rue has held the contract to manufacture British passports since 2009.

De La Rue lost out because their bid to make the new passports was £120 million more expensive than Gemalto's over the whole contract period, lasting eleven and a half years, the government said.

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.

But to the dismay of Eurosceptics, the government opted to award the £490m contract to EU-based rival Gemalto.

A handout photograph shows the original "blue" British passport, which was subsequently replaced by the burgundy EU British passport, supplied by the United Kingdom government in London, Britain, March 22, 2018.

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Britain's current burgundy passport, in use since 1988, will revert to its original blue and gold colour from October 2019.

De La Rue's chief executive Martin Sutherland said he remained "surprised and disappointed", but he had taken a pragmatic business decision not to appeal.

It said underlying operating profits were now forecast in the "low to mid £60s million range", against previous expectations for between £71 million to £73 million.

Analysts at Investec, who were predicting 71 million pounds, said it was a "disappointing outcome".

A statement from De La Rue added: "At this early stage of the new financial year, the group is cautious about the outturn for the full year, however starts off with a satisfactory order book underpinned by 16 per cent growth in total order intake driven by strong growth in Identity Solutions and Product Authentication".

"Workers will feel let down that the company is not prepared to fight the government's decision to ship the production of the new blue passport overseas", Unite national officer Louisa Bull said.

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