Pension Scheme funding update

RNS Number : 4482D

De La Rue PLC

03 March 2022

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated by the Market Abuse Regulation (EU) No.596/2014, as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"). Upon the publication of this announcement, this inside information is now considered to be in the public domain.

3 March 2022   

DE LA RUE PLC

REVISED PENSION SCHEME ACTUARIAL VALUATION & DEFICIT CONTRIBUTION PLAN

De La Rue plc (LSE: DLAR) ("De La Rue") today announces it has entered into agreement with De La Rue Pension Trustee Limited (the "Trustee") to bring forward an actuarial valuation of the De La Rue Pension Scheme ("the Scheme") as at 5 April 2021, rather than the originally scheduled date of 31 December 2022.

The results of the latest 5 April 2021 actuarial valuation show a reduced Scheme deficit of £119.5m.  This compares with the schedule of deficit repair contributions, agreed with the Trustee in May 2020, totalling approximately £177m from April 2021 to March 2029.  As a result of this new valuation, the Scheme Actuary has confirmed that the deficit can be funded through contributions remaining flat at £15m per annum from April 2022 to March 2029.

Therefore, the Company and the Trustees have agreed a new schedule that avoids the 'step up' in contributions from £15m to £24.5m for the period April 2023 to March 2029.  The Company will make deficit repair contributions of £15m annually during that period.  In aggregate, this agreement will result in a £57m reduction in cash payments to the Scheme by De La Rue.

To enable the bringing forward of the actuarial valuation, the relevant De La Rue group companies that are guarantors to the Group's principal Bank Facility Agreement have entered into a guarantee with the Trustee that provides the Scheme with an equal "pari passu" guarantor recourse ranking to the Bank Facility Agreement.  Additionally, De La Rue has committed to engage with the Trustee should the Company be considering any significant transactions that may potentially lead to material detriment to the Scheme and the Trustee will have a consent right where De La Rue incurs priority financial indebtedness beyond that permitted by its principal banking facilities (as they may be refinanced or replaced from time to time).  Finally, De La Rue has confirmed its support in principle to both medium and long-term strategic objectives of the Trustee in terms of partial buy-in / full buy-out of the Scheme, subject to appropriate pricing and commercial terms.

Clive Vacher, Chief Executive Officer of De La Rue said, "I am delighted that we have reached agreement with the Trustee that continues to honour the commitments we made back in 2020 to pay off the Scheme deficit by 2029, and also introduces further substantial protections for members of the Scheme.  At the same time, a £57m reduction in cash contributions to the Scheme will clearly benefit the Group's projected future cash generation".

De La Rue plc's LEI code is 213800DH741LZWIJXP78.

Enquiries:

De La Rue plc		[phone]
Clive Vacher		Chief Executive Officer
Rob Harding		Chief Financial Officer
Louise Rich		Head of Investor Relations
Brunswick		[phone]
Stuart Donnelly
Ed Brown

The person responsible for the release of this announcement on behalf of De La Rue for the purposes of MAR is Jane Hyde (General Counsel and Company Secretary).

Cautionary note regarding forward-looking statements

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "plans", "goal", "target", "aim", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the directors, De La Rue or the Group concerning, amongst other things, the results of operations, profitability, financial condition, liquidity, prospects, growth and strategies of De La Rue and the industry in which it operates.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond De La Rue's ability to control or predict. Forward-looking statements are not guarantees of future performance. The Group's actual results of operations, profitability, financial condition, liquidity, prospects, growth and/or strategy and the development of the industry in which it operates may differ materially from the impression created by the forward-looking statements contained in this announcement. In addition, even if the results of operations, profitability, financial condition, liquidity, prospects, growth and/or strategy of the Group and the development of the industry in which it operates are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods.

Other than in accordance with its legal or regulatory obligations, De La Rue does not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise.

 

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