De La Rue boss leaves in midst of bid for key BoE contract

The head of bank printer De La Rue is to leave the company in the middle of its bid to retain the Bank of England’s note printing contract.

Tim Cobbold, who has been chief executive of the FTSE 250 constituent since 2011, is to take up the same role at exhibitions and publishing specialist UBM.

Mr Cobbold will leave De La Rue on March 29, but a decision on the Bank’s £1bn contract is not expected until the summer.

His exit came as a surprise to the board – he resigned on Monday evening - with no successor in place.

Chairman Philip Rogerson will instead step up from being non-executive to executive until a replacement is found, with finance director Colin Child appointed chief operating officer on a temporary basis to support the chairman.

A headhunter will be appointed to vet internal and external candidates, with no deadline set for finding a successor.

Shares in De La Rue fell 9.5p to 810p.

The company lost the first part of the Bank contract in December when the ‘Old Lady of Threadneedle Street’ chose Australia’s Innovia Security to provide the polymer substrate for the new plastic notes.

However the substrate is thought to be worth less than 10pc of the overall value, which in total is worth £1bn over ten years.

De La Rue’s existing ten year contract to provide all the Bank’s notes is due to end in April 2015.

It is thought that were there to be a change of supplier, a six month transition window would be needed, meaning the Bank will need to make an announcement by October should De La Rue not be re-selected.

The company has fulfilled the Bank’s notes contract – the Old Lady’s first foray into outsourcing – since 2003.

In an interview with The Telegraph in December 2012, Mr Cobbold said of the Bank: "Of course it’s an important customer. We’re very proud of a very long relationship with them."

However Mr Rogerson attempted to downplay the significance of Mr Cobbold's exit, saying that the tender was being handled on a day-to-day basis by De La Rue's currency team, rather than the outgoing chief executive, and that final decisions on pricing would be made by the board as a whole.

Mr Cobbold will join UBM, which is more than twice the size of De La Rue in market capitalisation terms, on May 6.

Outgoing chief executive David Levin, who signalled his exit last September, will leave on March 1, with chairman Helen Alexander taking on an executive role until Mr Cobbold’s arrival.

Analysts suggested Mr Cobbold’s arrival raised the prospect of the sale of PR Newswire, and the focusing of UBM to be a pure-play global events business.

Roddy Davidson, analyst at Westhouse Securities, said: “Speculation is sure to focus on whether his arrival will herald a further re-shaping of the business towards events and perhaps the disposal of PR Newswire.”

UBM focuses on business-to-business conferences, with major brands including CropWorld, IFSEC and IOSH, focused on agriculture, security and health and safety respectively.

Mr Cobbold joined De La Rue in the start of 2011 during a bid attempt from Oberthur, the French security specialist.

He replaced James Hussey, who resigned over paper quality problems, which was in part triggered by the loss of a key bank note contract with the Indian government.

Mr Cobbold and the De La Rue board saw off Oberthur, and he went on to raise operating profits from approximately £40m to £90m over the course of his tenure, through cost-cutting, streamlining processes and focusing on polymer notes.